Schwab executives encountered pointed questions from financial advisors concerned that the company’s retail and robo-advisor operations were in direct competition with RIAs on Monday.
During an opening discussion at the Schwab IMPACT conference in Washington, D.C., between Bernie Clark, head of Schwab Advisor Services, and Walt Bettinger, president and CEO of the Charles Schwab Corporation, advisors submitted several questions about whether Schwab intended to target RIA clients with advertisements for their retail operations and Intelligent Portfolios digital advice platform.
Bettinger assured advisors who custody with Schwab that this is not the case.
“The retail business at Schwab generally targets mass affluent individuals,” he said. “The RIA industry generally targets higher-net-worth investors than we pursue in retail. We know there’s always some degree of overlap.”
Schwab custodies $1.6 trillion in RIA assets, nearly as much as it oversees in its $1.8 trillion brokerage business.
In a series of questions, advisors also expressed concern that Schwab’s $33 billion Intelligent Portfolios robo-advisor platform was targeting RIA clients with advertisements purporting that the service offered wealth management services to clients.
“We do broad-based marketing to investors in general, and obviously there are going to be people who work with RIAs who see many of our advertisements,” said Bettinger. “The idea that our robo platform, or digital advice platform from the retail side, would be a threat to RIA clients is pretty low.”
Bettinger added that while controversy over Schwab’s dual offering of retail investment services and institutional RIA support was a hot-button issue in the past, the topic seems to have died down in recent years.
He finished his comments with an appeal to RIAs who custody with Schwab.
“If any of you run into a situation where you are competing head to head with us with respect to a client you feel you are serving, and you feel like we’re in direct competition, call me or e-mail me and we’ll stand down immediately,” Bettinger said.