Clark also confronted advisor questions about low yields, relative to other custodians, paid on money market sweep funds in Schwab’s accounts.
“We have employed a bank as part of our relationships, but by no means is it our objective to keep cash captive in a bank account,” said Clark. “If a client’s money is yield sensitive, we have great purchase alternatives,” adding that “we believe a bank is a great place for liquidity.”
Clark was also asked to address service issues Schwab experienced during periods of market volatility earlier in 2018, when many retail clients and some advisors had difficulty accessing and making changes within their accounts.
“We have certainly had some service issues. We doubled in volume earlier this year,” said Clark. “We have enacted many changes from within our organization. We’ve hired ahead to get more people on board, but we’ve also entered a period where we’re truly modernizing our systems and moving more into a digital environment, a place where we can move more volume without expanding our head count. If volume comes and you have to have more people every time there’s a spike, it’s not sustainable.”