September 16, 2011

Schwab’s Clark: Firm Rolling Out Ad Campaign Touting Advisors—Weekend Interview

Bernie Clark says custodian will show support for RIAs through multimedia marketing campaign

Bernie Clark, head of Schwab Advisor Services Bernie Clark, head of Schwab Advisor Services

“We’re in this business because it’s important to Charles Schwab (SCHW),” said Bernie Clark, head of Schwab Advisor Services, and to demonstrate the importance of its RIA custody business, Schwab will institute next week a multimedia marketing campaign for advisors.

The campaign will include sharable, digital banners with the tagline “RIA-Stands for You. Discover the difference with a registered investment advisor,” and an affiliated website, RIAStandsForYou.com.

Speaking at the FPA Experience 2011 conference in San Diego, Clark said the campaign will include a toolkit for RIAs who custody with Schwab to use printed and video materials on their own sites. “It’s a campaign about being independent,” Clark said, that includes video vignettes featuring some high-profile advisors, such as Chris Cordaro of Regent Atlantic, Gene Diederich of Moneta Group and Rebecca Pomering of Moss Adams Wealth Advisors, talking about their priorities and process when it comes to serving clients.

In response to a question from the audience by Tim Welsh of Nexus, Clark said “I think we can grow” the campaign to possibly include a list of advisors that consumers would be able to contact by, for example, entering their zip code.

In an interview on Thursday with AdvisorOne, Clark said the importance of RIAs in the financial services industry has “never been more significant” and proceeded to discuss some of the major trends that advisors should be addressing.

For one, he mentioned the growing importance of women as clients, pointing out that in North America, 37% of the affluent population is female, but fewer than 20% currently use a financial advisor. “It’s a market,” he said, “that has to be tapped,” though to serve that market segment, advisors “may need some differential processes.” He also said that emerging markets investing is “wildly underutilized” by most investors.

He warned of the opportunities and dangers in generational wealth transfers, saying that nearly half of all managed wealth is lost in intergenerational transfers. The affluent are growing more quickly than other cohorts, he said,

citing the CapGemini Merrill Lynch 2011 World Wealth Report, which found an 8.3% increase in the affluent population worldwide and 8.6% growth in the U.S. between 2009 and 2010. 

But client feelings about investing and expectations of their advisors have changed significantly coming out of the crisis of 2008-2009, meaning that advisors “need a different approach in planning for them and in the products you use.” A US Trust/Campden Family Wealth survey found that 78% said they had changed their approach to investment either somewhat, a lot or completely. He also pointed out that as for the high-net-worth client, “more wealth equals more advisor relationships,” citing research that showed that 58% of household with more than $5 million in investable assets have multiple advisors.

Turning to the “dynamic regulatory environment,” Clark said it’s become more obvious that “regulators won’t create clarity” when it comes to issues such as investor protection or the fiduciary issue. “It’s not going to come by decree,” he said, and called on advisors to “take control of the situation.” Schwab’s own research has found, he reported, that many advisors have already embraced additional regulation when it comes to protecting clients.

Moreover, he urged advisors to “think like an enterprise—think big, think beyond—but act like a mom-and-pop business” in caring for clients.

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