Seven takeaways from Schwab Institutional Investor Day

May 30, 2024 Sam Achelpohl
The “what comes next” was on full display in a half-day meeting with the investment community

Last week, Charles Schwab invited members of the investment community to its Westlake campus to talk about one thing: the future of growth at the company. In its inaugural Institutional Investor Day, financial analysts, large institutional stockholders, and members of the media heard Schwab leaders enthusiastically describe the incredible opportunities ahead for Schwab in every line of its business.

The acquisition of Ameritrade was always about the possibilities. More than four years ago, we embarked on the ambitious and historic effort to acquire and integrate Ameritrade because we believed that, together, we could build something better for our clients than either firm could do on its own.

As of today, 100 percent of Ameritrade’s client accounts and assets have transitioned to Schwab. Now for what comes next.

Here are just some of the key takeaways from Institutional Investor Day.

1. “We stand ready to enter a new phase and a new era of growth.”

Expressed by Schwab president Rick Wurster, those words sum it up. The hard work demonstrated by so many Schwab employees over the past few years is a clear indicator of a readiness to take off. With all of our clients now on a single, combined platform, we’re ready to put even greater focus on delighting our clients and continuing to drive long-term organic growth.

Even with its size, Schwab believes it can deliver 5-7% growth in net new assets over time. A portion of that will come from existing clients—by delivering brilliant basics exceptionally well and serving their needs more holistically. The rest will come from new clients who are attracted to the breadth of what we have to offer, and the company’s reputation for outstanding service.

2. A simple, timeless, and effective strategy for growth—Through Clients’ Eyes.

As Co-Chairman and CEO Walt Bettinger described, “it's a strategy that works and a strategy that will continue” as Schwab begins this new chapter. The company will operate around the very simple concept of the Golden Rule, serving our clients as we ourselves would like to be served. That also means no trade-offs—Schwab will not ask clients to pay more to get premier service or accept a lower level of service in return for a lower price. 

Growth will be driven by the trust that millions of investors have placed in the company, and a strong reputation that attracts others to all it has to offer.

3. The company’s sights are set on a $500 billion asset opportunity.

For the better part of four years, the company worked hard to bring together the best of both Schwab and Ameritrade. Now the exciting part of the journey begins. The company is going all in, with all of its clients now on a single platform—the strongest platform with the broadest set of capabilities in the company’s history. 

Consider this: the average Schwab client keeps about 50% of their assets with the company. Ameritrade clients traditionally kept about 30% of their assets with Ameritrade (often used for trading), with the rest kept somewhere else. Schwab believes it can close that gap by introducing a breadth of offerings that weren’t available at Ameritrade, leading more former Ameritrade clients to entrust Schwab with more of their assets. It could be up to a $500 billion asset opportunity. “We’re excited to be that somewhere else,” Wurster said.

4. Personalization is here, and it’s here to stay.

A running theme across nearly every presentation and line of business: modern wealth management will be driven by personalization.  

“This is the future of where investing is going,” Bettinger said. 

Everywhere, people want personalization in the service they receive, the content they get, the experiences they have, and the products and solutions they buy. Again and again, Schwab leaders emphasized the power of personalization as a priority.

5. When its 15,000 advisors succeed, Schwab succeeds.

“When you’re a custodian for the fastest growing segment of financial services and you have $4.3 trillion in assets (and growing), you need to be really, really good at what you do,” said Bernie Clark, head of Advisor Services (AS), which serves independent Registered Investment Advisors (RIAs).   

He, along with fellow AS leaders Jon Beatty and Tom Bradley reinforced that at its core, AS is like a logistics company, processing millions of transactions and trades, opening new accounts, and facilitating money movement on an annual basis. Schwab is leaning into digital tools to make it easier for RIAs to run and grow their businesses, so they can focus on serving and advising their clients. Schwab’s clients, they emphasized, want us to be excellent at our core and brilliant at the basics.

6. Artificial intelligence as an engine for great service.

Schwab sees AI’s potential. Among the 90+ artificial intelligence use cases under development at the company, there’s one that has leaders particularly excited because it has everything to do with better client experiences and service. 

Today, Schwab representatives search our internal Knowledge Center pages about 600,000 times every month for answers to client questions. The Schwab Knowledge Assistant is a generative AI tool supporting the Knowledge Center, designed to help reps find what they need much faster. It’s helping the company’s reps answer even the most complex questions quicker, and it’s speeding up the learning curve for newer reps. Imagine shaving a few minutes off 600,000 searches a month. This has positive implications for efficiency, but more important, enormously positive implications for clients.

7. Success for Schwab will always stem from better outcomes for clients.

At one time, better outcomes simply meant democratizing investing, or providing access. Schwab was a pioneer and remains a leader on that front. However, today, more and more investors need holistic wealth management—more support, someone to talk to, and guidance. And, the more holistic picture the company has of a client’s financial life, the more it can do to help them, make sure they’re satisfied, and keep them with Schwab.

Whether it’s offering best-in-class trading and education platforms, comprehensive wealth and advisory solutions, or banking solutions like mortgage lending and pledged asset lines that clients are looking for, Schwab has never been in a better position to support our clients’ financial journeys holistically.

“We are perfectly positioned to be able to offer that because of what we've done over the years and the credibility that we’ve built,” said Neesha Hathi, head of Wealth and Advice Solutions. “It’s a really compelling story when we see the type of growth and enthusiasm we’re seeing from clients.”

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