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Schwab’s Leaders Talk of ‘Never Greater’ Opportunities for RIAs

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Schwab Advisor Services’ annual Impact conference is the RIA custodian’s biggest event, but the impact of its invitation-only Explore conference for RIAs has grown more important over the years. That growth was evident at this year’s Explore, held in Tucson, Ariz.

In a telephone interview conducted during the conference, Schwab CEO Walt Bettinger and SAS’ head, Bernie Clark, provided an update on existing initiatives for advisors who custody with Schwab, along with a some insight into Schwab’s new corporate advertising campaign, which is meant to “re-establish Schwab as a challenger brand,” according to Bettinger.

In the wide-ranging interview on Thursday, Bettinger and Clark first spoke of the Explore attendees, who Clark said came from 158 RIA firms, 51% of which manage more than $1 billion in assets. Speakers at the show ranged from Schwab’s Liz Ann Sonders and Greg Valliere of the Potomac Research Group—speaking, respectively, of the state of the markets and the state of national politics—to Gen. Colin Powell and former Sen. Olympia Snowe.

Bettinger said the advisors at Explore were “upbeat and optimistic,” that their firms were showing strong growth, and that “to a person they are excited” about the business.

That growth and success, warned Clark, is “attracting competition,” mentioning in particular BloombergBlack, a nascent online wealth management service by the financial publisher that Clark said could be attractive to younger investors, many of whom will be the beneficiaries of the $16 trillion that will be transferred to younger generations by the boomers. However, Clark also argued that “the generations aren’t that different,” and that investors young and old “want people who speak their language” to provide financial advice.

As part of its efforts to help RIAs who custody with Schwab to continue to grow their firms, and to be able to reach those younger investors with advisors who speak their language, Clark and Bettinger announced several new initiatives and updates to previously announced programs.

First, as part of its RIA Stands For You initiative, Schwab will invite RIAs to participate in a service to be launched later this year: an online, searchable (by ZIP code) directory of RIA firms on the site. While Clark was quick to point out that this is “not a referral site,” he argued that it reflected Schwab’s commitment to RIAs and to educating investors about their advice options. Bettinger reiterated the importance of the RIA channel to Schwab, saying it remained “our primary strategy in the high-net-worth” space. “Anything we could do to help advisors is good for investors, good for advisors, and good for Schwab,” Bettinger said.

Clark also announced at the conference that Schwab’s Executive Leadership Program will launch in January 2014, under which Schwab will train about 25 participants as future leaders of RIA firms, using faculty comprising academics from leading universities, Schwab executives and leading RIAs themselves. Schwab also announced new participants in it Schwab OpenView Gateway technology platform: Envestnet | Tamarac’s Rebalancing software, MoneyGuide Pro and NaviPro Planning Suite. Later this year, Schwab said it will begin piloting e-signature and e-authorizations.

As for Schwab’s new corporate advertising campaign, ”Own Your Tomorrow,” which launched in June in TV, print, online and mobile and replaces the longrunning “Talk to Chuck” campaign, Bettinger said the goal was to “re-establish Schwab as a challenger brand.” The campaign, he said, will be “more inclusive of all the company’s” offerings, including its advisor channel. More ads will roll out over the coming months, he said, designed to “resonate with driven investors,” who he defined as people who are “involved with their communities and their money.”

The campaign reflects the importance of advisors to Charles Schwab & Co, Bettinger said. “Advisors are core to our overall corporate strategy; they’re not a sideline business.”

Clark added that Schwab needs to contine to “be the best custodian. the competition hasn’t been able to catch up with us.”