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Bettinger on Schwab’s Evolution And Important Industry Trends


Bettinger on Schwab's Evolution And Important Industry Trends

Walt Bettinger is celebrating his tenth anniversary as president and chief executive officer of Charles Schwab Corp. (SCHW). In his decade-plus at the helm of one of the largest U.S. brokerage firms, Bettinger steered Schwab through the financial crisis and oversaw the company’s expansion into wealth management and the exchange traded funds (ETFs) industry, among other achievements.

On Monday, Bettinger spoke at the Morningstar Investment Conference in Chicago, discussing a broad range of issues, including how advisors can deploy technology to improve the client experience, retirement income and the evolving fee landscape.

One of the issues Bettinger touched on is how advisors can keep up with and exceed clients’ expectations for superior customer service.

“The last great experience anywhere is minimum expectation for future experiences everywhere,” said Bettinger.

Investors also “increasingly realize that in a world with an instantaneous news cycle, consistent outperformance is exceptionally difficult (something out of their control), which is a good thing because it shifts the focus to areas within consumer’s control (fees, diversification, planning),” said the Schwab chief executive.

Focusing On The Future

As head of  a $77.75 billion publicly traded company (as of June 11th) with $3.31 trillion in client assets under management, Bettinger recognizes the intricacies that go along with serving multiple stakeholders, be they Schwab shareholders, investors in CSIM funds, Schwab Intelligent Portfolio clients (the firm’s robo-advisor platform) or owners of Schwab ETFs.

While the oldest Schwab ETFs are not even a decade old, the firm has rapidly made its presence felt in the booming ETF space. As of June 8, 2018, the company had nearly $116 billion in ETF assets under management, making it the fifth-largest U.S. ETF sponsor. That number only reflects assets allocated to Schwab branded ETFs, not the total amount of ETF assets custodied at Schwab.

Schwab has shown a willingness to compete with rivals on ETF fees. Of the 100 least expensive US-listed ETFs, 15 are Schwab products, including the two cheapest ETFs. For his part, Bettinger embraces the competition with Vanguard.

“I do think that effectively competing with Vanguard or any organization requires an honest understanding of your strengths and vulnerabilities,” he said. “Do you have scale or not? Do you have close client relationships or not? No one owns the throne of perfection. The key is understanding where you might have or can create sustainable advantages.”

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