Walt Bettinger, left, and Bernie Clark. (Photo: Charles Schwab) Walt Bettinger, left, and Bernie Clark. (Photo: Charles Schwab)

Bernie Clark, head of advisor services for Charles Schwab, kicked off the broker-dealer’s annual Impact conference for advisors in Washington on Monday for the “5,000 strong” attendees with accolades that what they do for their clients “is so, so important” and makes a “big difference” in their clients’ lives, but acknowledged that it’s “really hard” to do their jobs on a daily basis.

Ten years ago, Clark said, “we passed through the financial crisis,” noting that this year’s Impact falls on the anniversary of the “global meltdown in the markets that paralyzed the financial services industry.”

But, he added, “we’re not there now, and it’s a wonderful thing.”

Clark offered attendees a timeline:

  • The Federal Deposit Insurance Corp. closed 465 banks between 2008 and 2012 — while in the five years prior, 10 banks had failed;
  • In 2008, $6.9 trillion in market value was wiped out of the markets in a single year;
  • Between 2007 and 2010, 8.7 million people lost their jobs.
  • Unemployment in 2010, “even as we began to pull out of these markets” was still at around 9%.

“We could spend the entire conference trying to determine” what caused the financial crisis, he said. “Was it the housing boom or the bust? Was it the amounts of financial leverage in the system? Was it the securitization of mortgages? Or the embracing of derivatives?” Clark asked rhetorically. “Each one of us knows that the answers to those questions is yes, yes and yes.”

It was also, Clark continued, a “lack of visibility into the financial systems, and in some cases leadership decisions that didn’t support the safety and best interest of clients.”

In the “poignant words” of Charles Schwab, Clark continued, “the financial services industry lost sight of the fact that its primary purpose was not about driving revenue and profit at any cost, but to pursue reasonable growth and managing risk carefully in order to maintain public trust.”

The market collapse between 2007 and 2009 “was 200% worse than the four bear markets that had come before,” Clark continued.

“Doubt was pervasive at the time,” he said, “but you [RIAs] helped them [clients] to pick up the pieces. You were the refuge when trust was lost.”

In that last decade, Clark said, advisors have worked “to set your clients up for the future.”

‘Fast Forward to Today’

“Costs are low. Advice, information are at all-time highs,” Clark said, while the market “has been hitting highs. And there’s really never been a better time to be an investor.”

Consumer confidence “is at the high of highs, unemployment is low and joblessness” is lowest in 49 years. The economy expanded in the spring at a 4.2% rate, and GDP growth in the last quarter was 3.5%.

“If it keeps up, we could have the first full year since 2005 of 3% growth,” Clark said.

What needs to be “top of mind” for advisors? “Talent, technology and cyber,” Clark said.

Schwab ‘Will Stand Down’

Walt Bettinger, president and CEO of Charles Schwab, added during a question and answer session with Clark that if RIAs who custody with Schwab ever “run into a situation” where you think Schwab is “competing head to head” with you, “call or email me and we will stand down immediately on the retail side.”