TD Ameritrade and Charles Schwab are in the early stages of an 18- to 36-month integration process that will build one strong company out of two, Bernie Clark, head of Schwab Advisor Services and a member of the Charles Schwab Executive Council, said today at the opening session of the Schwab Impact 2020 conference that's being held virtually.

The reconfigured firm will continue to have a no minimum asset requirement for investors and will not have custody fees, Clark said. A key driver for the firm will be to draw diverse talent into the industry, he added.

RIAs are continuing on a growth trajectory in the midst of the pandemic, and size is going to be increasingly important in the next decade, added Walt Bettinger, president and chief executive officer of The Charles Schwab Corp. and a member of the board of directors. “Size and an ability to have deeper scale are important for areas like cyber strategies," he said. "These investments are huge. All RIAs are looking at how they can be bigger, but yet retain deep, close relationships with clients.

“So much of this year has felt like it was out of our control,” Bettinger added. “We have to focus on what is in our control. Schwab quickly adapted this spring and now 95% of advisors are working from home. Fees are increasingly transparent and fees are lower, which is good for the client. But those things are going to be challenges to anyone trying to enter the industry,”

The need for size is going to push mergers and acquisitions to new records, the two men predicted, but RIAs still value organic growth.

Certain trends will emerge in the next decade, according to Bettinger, who said technology, along with the need to differentiate a firm from the competition, will become increasingly important.

“Advisors should focus on knowing their clients well,” he added. “We are in the trust business. It takes a lifetime to build a reputation, but it can be lost in a moment.”

This has been a learning year for Schwab, Bettinger said, noting that productivity was high in the early days of pandemic but has fallen a little as advisors and clients work and meet remotely.

“Being together is critical to our culture," he said. "We want to be back in the office when it is safe. It is too soon to talk about big changes or to say we are going to abandon our real estate policy.” 

Clark compared the current situation to the financial crisis. “Twelve years ago we saw clients through one of the scariest times of their lives," he told the audience of financial advisors. "Now, 2020 has proven to be difficult in every way imaginable. You have remained optimistic and used technology in bigger and better ways. Your trusted advice has never been more important.”