The Charles Schwab Corporation announced this morning that Walt Bettinger would retire as CEO on December 31. He will be succeeded by Rick Wurster, who was named the firm's president in 2021.
Bettinger will continue to serve on the board of directors as executive co-chairman alongside the firm's founder, 87-year-old Charles Schwab, according to a company press release.
Bettinger became CEO of Schwab in late 2008 during the height of the financial crisis. Over the next 16 years, the discount brokerage firm grew its assets from $1.14 trillion to $9.74 trillion. It also expanded the number of brokerage, banking and plan participant accounts from 9.3 million to 43.2 million.
"Rick Wurster and I have worked together on a daily basis for more than eight years," Bettinger said. "I have complete confidence in his leadership, and I am thrilled that the Schwab board of directors has selected him as my successor. In addition to being incredibly bright, Rick possesses a balance of intellectual honesty and curiosity, combined with high personal integrity and character."
During Bettinger's tenure, the firm's market capitalization climbed from approximately $18 billion at the end of 2008 to approximately $119 billion—a 660% increase, according to the release.
Schwab also acquired one of its largest rivals, TD Ameritrade, an acquisition that was announced in November 2019 and took several years to complete. While the transfer of TD accounts to the Schwab system was initially problematic in some cases, the glitches have largely been worked out.
Like many other brokerages, Schwab has been challenged by cash-sorting since the Federal Reserve began raising interest rates in early 2022. Schwab earns a large chunk of its profits off of sweep accounts, and many investors moved funds out of these accounts into higher-yielding money market funds and CDs. Like many other big name firms, Schwab has also recently faced litigation over its low-paying cash sweep accounts (where it holds short-term client cash). Schwab shares suffered in 2022, but they regained most of their losses. Still, the increased focus of investors and plaintiffs' attorneys on sweep accounts is likely to continue to put pressure on a lucrative business line for all brokerages.
Schwab's banking business also encountered some balance sheet problems in 2022 as bond investments tumbled, though its banking business is relatively small and their losses were not as severe as those impairing many regional banks. In the last year, bonds have enjoyed a recovery and the firm also benefited from the bull market in equities.
Bettinger founded The Hampton Company, a retirement plan services concern, at the age of 22 in 1983. It was acquired by Schwab in 1995 and Bettinger's entrepreurial ethos was one of the characteristics that won him early on the respect of Chuck Schwab.
Wurster has been Schwab’s president since 2021, according to the company website. Before that he headed Schwab Asset Management Solutions leading money management and portfolio advice solutions, wealth management services, financial research, and market insights, according to his company bio. From 2006 to 2016, he was a portfolio manager at Wellington Management, according to his LinkedIn page, and in the half decade before that he had been at McKinsey & Co., where he was an associate principal.