Walt Bettinger

Half of Charles Schwab’s client assets now enrolled in ongoing advisory relationships

Half of Charles Schwab’s USD2.3 trillion client assets are now enrolled in an ongoing advisory relationship through its Investor Services businesses and the 7,000 independent Registered Investment Advisors (RIAs) it serves through Schwab Advisor Services.

"We take pride in the role Schwab and the advisors we serve have played in making high quality investing accessible and affordable for investors over the last 40 years. Costs and convenient access will forever matter and be a core part of our story. The steady growth we've made into wealth management reflects a transformation in our firm that has been driven by the needs and demands of investors as so many of them accumulate significant assets over the course of their lives and increasingly look for professional help," says Walt Bettinger (pictured), Schwab president and chief executive officer.
 
Schwab provides investors access to wealth management services directly through its retail business as well as supporting independent RIAs with the wealth management services they offer their clients.
 
"Today's investors decide what type of relationship they want based on their own specific needs and preferences," Bettinger says. "Many find appeal in the nationally branded, wealth management services of a large firm, like those available through our financial consultants in our retail business, while others seek the highly customized and local expertise offered by independent RIAs. Together, we are reaching a large and growing pool of investors looking for an alternative to the traditional wirehouse brokerage model; which we believe continues to lose favour among investors today."
 
Overall, across the retail and advisor services businesses combined, average assets per client household are approximately USD500,000 at Schwab. Within Schwab's retail business, the growth of affluent assets reflects the evolution of the firm and its clients' needs: as of December 2013, accounts with more than USD250,000 comprised nearly 85 per cent of total balances in retail accounts at Schwab; accounts in excess of USD500,000 comprised more than 75 per cent of all retail assets. Today more than 70 per cent of all retail client assets are now serviced by a dedicated local relationship from a branch professional.
 
Bettinger says there is increasing demand for comprehensive financial advice and help managing substantial assets, especially as millions of baby boomers continue to approach and enter retirement following their peak earning and asset accumulation years, and do so with a changing point of view about what they want from their investment services firm.
 
"Our research reveals a contemporary affluent investor mindset: engaged, willing to ask tough questions of their providers and demanding of quality, value and accountability. Especially when it comes to their money, we're seeing investors are more focused on substance and becoming increasingly selective about the types of financial professionals and firms that they place their trust in when it comes to helping manage the assets they have accumulated over their lifetime. We believe effective wealth management should combine a personal relationship with transparency, open architecture, technology and accessibility that engages clients and gives them a greater sense of confidence," Bettinger says. "It is a philosophical approach about focusing on the client that we've shared for the past 25 years with independent advisors and we believe the underlying reason we're seeing both parts of the business grow in tandem."
 
This month the company has begun running a series of new print and television advertisements. One series of print ads are designed to highlight Schwab's support for independent RIAs and focus thematically on a "celebration of independence." The campaign began with a print ad featuring Chuck Schwab, company founder and chairman, and will be followed later in June with online ads featuring RIAs and their stories, each charting the advisor's path to independence and the power of their model for serving the wealth management needs of their clients.
 
To showcase its evolving approach to wealth management within the retail business, the company will also launch a series of advertisements on June 12 defining a "modern approach to wealth management," that highlights the importance of client/financial consultant collaboration, cost transparency, value, broad access to third-party investment solutions, and a range of other financial products and services available to clients.

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