Few firms have had it worse recently than Charles Schwab & Co. An identity crisis sits at the heart of the firm's current troubles. Under former CEO David Pottruck, the firm looked to extend its discount-brokerage roots and tap the wealth management market. But that effort largely flopped, and now Charles Schwab himself has stepped in to oversee a back-to-basics movement.

Amid this negative noise, one unit has sounded some sweet notes: Schwab Institutional, which provides back-office and technological support for more than 5,000 advisors (down from 5,900 last year). Deborah McWhinney heads the unit. Since coming from Bank of America in 2000, she has watched its assets exceed the $300 billion mark (about 30 percent of the firm's total assets).

McWhinney spoke to Registered Rep. staff editor Will Leitch.

Registered Rep.: It has been a crazy time at Schwab. Your side of the business is often singled out as one of the best parts of the company…in a company that has few other bright spots. Have you guys been able to stand away from everything happening over there?

Deborah McWhinney: There has been much going on with the company, but we have faith in how it's going. Many of our advisors use [embattled Schwab purchase] U.S. Trust and have found it most valuable. The whole investment management business has just taken off, and we've benefited from that. Our clients are pretty sophisticated financially. Many are shareholders in the company, and they want us to do what's good for the company, which means investing in retail, investing in institutional, investing in U.S. Trust. Our clients trust that we're healthy, because so much of [Schwab's] business model is dependent on us being healthy.

RR: Have any of your clients been skittish? How's Institutional weathering the storm?

DM: Our clients love U.S. Trust, and Schwab Bank, and the other aspects of the business. It's the whole package, not just us. We're proud of that association and feel the firm is going in the right direction. Our clients aren't spooked by anything they read in the papers.

RR: It seems like a maxim that everyone wants to go independent, but it's hard to verify through statistics. What are you seeing out there when it comes to people moving toward independence and making that leap?

DM: We are seeing very large pools of brokers that are leaving the traditional wirehouses because they want to make more money on what they're doing. They feel they can serve their clients better by using our investment managers. We do business with 5,100 firms and there are three ways we see growth. One is the organic growth, where clients are clearly entering the marketplace. My bet is that's 90 percent of the growth. Five percent are new firms forming. The others are brokers slowly breaking away from old firms. It used to be people who had $25 million, $50 million or $75 million assets under management. Now it's really more of the major players that we're seeing. We usually don't look at companies with less than $25 million or $50 million anymore.

RR: Do you think the growth of team structures at wirehouses and some of their other moves toward traditionally independent endeavors makes it more difficult for you to recruit great firms?

DM: Well, officially, we don't recruit anyone; they come to us. But I don't think it hurts us. Many of those teams have an entrepreneurial spirit, and they have a team that knows it can work together. The people who have high assets in those teams are exactly the type of people who fit well with us.