A Decade That Reshaped Wealth Management:

Consumer expectations around fee transparency + The rise of automation in 401k plans

Trends Intro Paragraph

Before drawing the curtain on the past decade, let’s look back on the past 10 years and reflect on the many momentous developments in the financial services and wealth management industry. Perhaps the most significant 10-year span the industry has seen, advancements were led by technological capabilities and competitive pricing reductions. With a new year and new decade off and running, we asked leaders at Schwab to offer their perspectives on the most significant changes in the past 10 years and their impacts on investors.

Trend 5: Mary


Consumers increasingly expect fiduciary-standard advice and transparency – in particular when it comes to fees

Nearly 80 percent of Schwab clients say they’re most confident in achieving their financial goals if they’re getting some form of professional advice,* yet only a fifth of Americans currently work with a financial advisor.**

There can be a number of roadblocks or concerns when it comes to getting financial advice – lack of trust in the financial services industry, the complexity of the advisor-client relationship, or the cost to get professional guidance. In fact, more than half of people with a financial advisor say they want to understand the reasons behind investment recommendations they receive,*** and nearly three-quarters say cost is extremely/very important when it comes to getting financial advice.****

Schwab has long supported the effort to protect the interests of investors by holding our industry to a high standard: acting in a client's best interest when giving investment advice and managing and disclosing any conflicts of interest. And we’ve taken a number of actions that reflect our ongoing client-focused approach. We’ve lowered costs, including trading commissions and fund expenses and minimums, we’ve made advice and planning more accessible through our digital advisory services, we’re the only major investment firm to offer a Satisfaction Guarantee, and we’ve evolved our client-facing employees’ compensation to support our commitment to do what’s best for our clients. In addition, for more than 30 years Schwab has been a champion of the independent advisor industry, which provides fiduciary standard advice to clients.

Wealth Management Trend: Mary Quote

"At Schwab, we believe it’s crucial to deliver on clients' expectations for a modern investing experience. That means being easy to work with, making investing and advice more accessible to more people who need it, and offering products and services that are guided by transparency, value and the investor’s best interest. This is how we earn the trust and loyalty of our clients and lead the industry forward."

Mary Rosai, Senior Vice President, Schwab Investor Services and head of field and client experience and Schwab’s planning and portfolio group
Mary Rosai, Senior Vice President, Schwab Investor Services and head of field and client experience and Schwab’s planning and portfolio group

Trend 6: Catherine


The widespread use of automation in 401(k) plans to help investors save for retirement – auto enroll, auto increase, auto advice

For decades, the 401(k) industry struggled to overcome the basic challenges of getting workers to sign up, save more and diversify. People understood they were responsible for their own retirement, but inertia and uncertainty often held them back. Thanks to changes in regulations that enabled employers to implement “automatic” 401(k)s, we’ve largely solved for these challenges of getting people in the plan, getting them to increase their savings rates, and – through target date funds and managed accounts - getting them into a diversified portfolio. There’s still more to do, but having tools in place to overcome these core issues has been a game-changer for workers and their 401(k)s.

Wealth Management Trend: Catherine

"Helping employers achieve basic plan goals through effective retirement-plan design means we now can focus more on the individual needs of workers, providing greater personalization through financial wellness initiatives, investment advice and one-on-one coaching. That’s the next step."

Catherine Golladay, President, Schwab Retirement Plan Services
Catherine Golladay, President, Schwab Retirement Plan Services

Part 3 of a series

*Q2 2019 Schwab Retail Client Sentiment Survey

** 2018 Schwab Modern Wealth Survey

***2013 Schwab “Today’s Engaged Investor” Study

**** Q4 2016 Schwab Retail Client Sentiment Survey