“In many ways, scale will dictate the long-term success and survival of companies, as well as the ability to deliver services to all different sizes of clients,” said Walt Bettinger, CEO of Charles Schwab.
David Paul Morris/Bloomberg News
Charles Schwab’s landmark $22 billion acquisition of TD Ameritrade was the fruition of the company’s years-long efforts to reposition itself within the marketplace, according to CEO Walt Bettinger.
“It was the culmination of something that we had talked about internally and tried to position our firm for the better part of the last 10 or 15 years,” Bettinger said at the Money Management Institute’s virtual conference this week.
The deal, which closed Oct. 6, boosted Schwab’s size and reach. It now has approximately $6 trillion in assets, and operates as a mutual fund company, RIA custodian, bank, retail brokerage and national wealth management firm.
“You have to be omni-channel,” Bettinger said. “We saw that in the financial crisis.”
The acquisition gave Schwab capabilities it didn’t have, such as TD Ameritrade’s options trading platforms thinkpipes and thinkorswim, Bettinger said. Roughly 25% of the industry’s options trading will happen on Schwab’s platform, and the company’s equity trading volume “could rival the entire New York Stock Exchange,” the chief executive said.
“In many ways, scale will dictate the long-term success and survival of companies, as well as the ability to deliver services to all different sizes of clients,” Bettinger said.
When it comes to financial planning, clients want hybrid advice, Bettinger said, calling attention to Schwab’s subscription robo offering, Schwab Intelligent Portfolios Premium, which gives clients access to a CFP for $30 a month after an initial $300 planning fee.
“I really believe that, for the vast majority of investors, some mixture of technology and live assistance is what creates the highest degree of confidence,” he said. “I know that’s what works for me, and our research shows that that’s what works for most investors.”
Client segments are blending, according to Bettinger. Whether high-net-worth or mass affluent, clients “expect great value, great service and quality objective advice,” he said.
While wealthy clients may need services including lending capabilities or more personalization and reporting, “I think that there are more similarities than there are differences today than ever before,” he said.
Anil Vazirani is president of Secured Financial Solutions, independent insurance advisor investment advisor rep with a fiduciary obligation and in the financial services industry since 1994. A+ rating with the Better Business Bureau for over a decade and a half, members in good standing with the National Association of Insurance and Financial Advisors.
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