Bettinger said that in a future without transaction costs, price will no longer be a differentiator within the industry and more end-investors will begin to question whether they want to work with firms still charging commissions in any form.
Later in the session, Chairman and founder Charles Schwab said regarding commission that in 20 years, “no one would know what they were.”
“That’s when you can take advantage of it,” he said. “There are a lot of tentacles that could come out of this move: consolidation is a possibility. The focus on brand, trust, client experience – all of that will come to the forefront.”
Clark and Bettinger also announced that Schwab would expand its lending business for financial advisors, including loans to advisory firms, mortgage lending and unsecured loans for clients.
Schwab also revealed that the company will introduce a new income management service for retirees within the next year.
“We’re not ready yet, but next year we will roll that out,” said Schwab. “You have that capability to help your clients learn how to manage and come up with their own paychecks. Smaller investors will want that, too. Many advisors will want to have that as a tool to help out elder people.”