RCS, the newest megaplayer in the independent B-D space, is taking a swipe at Schwab's new widely publicized robo offering.

Schwab Intelligent Portfolios, which offers investors several dozen ETF choices, is "not what I would consider to be planning," said RCS Capital CEO Michael Weil during a Citi Asset Management Investors Conference in New York on Tuesday.

Weil further blasted the category in general by using the auto market to draw a comparison between online advisory offerings and full-service advisors. "I don't know anyone who owns a Mercedes who aspires to own a Hyundai, but there are plenty of Hyundai owners who would like to own a Mercedes," he said.

Larry Roth, chief executive of Cetera Financial Group -- RCS' recently expanded independent B-D network, took a more diplomatic tone -- but essentially seconded Weil.

While he praised online platforms for opening up the wealth management market to millennials, and noted that RCS firms would use automated digital tools where relevant, Roth said he doesn't consider the robo firms "as currently configured" to be a competitive threat. "We don't expect most clients to move to a pure robo advisor environment," he said.


Roth also said the network expected to increase its share of fee-based business this year; only about $50 billion of RCS Capital's $230 billion in assets was fee-based in 2014.

Revenue from the company's fee-based business would "increase dramatically as interest rates rise," Roth added.

He also expressed confidence in RCS' ability to recruit new advisors. Noting that RCS is Pershing's largest customer, he said he thought the network was in "a much better position to recruit from other Pershing advisors."

Advisor recruiting and retention are in the spotlight after a spate of negative publicity last fall and winter surrounding an accounting scandal at former RCS chairman Nicholas Schorsch's American Realty Capital -- and the resulting suspension of nontraded REITs sponsored by RCS.

The scandal "certainly created great concern and anxiety at all levels" of the company, Weil acknowledged, saying he "wouldn't wish [the crisis] on my worst competitor." Nonetheless, Weil insisted, the firestorm created a "tested management team" and a "better structure" at the company's board of directors.

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