Name: Charles Schwab CEO Stock Advice: Have Your Plan and Stay with It
Uploaded: 2019-04-26
Duration: 5 min 28 s
Description: Walt Bettinger says that rule of thumb hasn't changed much in his time in the business.

[ MUSIC ] Walt, Suave must be getting lots of phone calls from clients these days given the return to rallies in the markets. What are your advisors telling them to do? I think what we try to do throughout all cycles of the market is offer advice for the long- term. The basics. Have your plan stay with it. I know you always tell me that you say stick with your plan and sometimes you say it's better To do nothing. But how do you do that when you see in the news every day that the markets have these huge rallies, huge sell- offs. And people think, I have to do something. It's risky not to. Well, I think it's more risky to listen to the noise. We know that there's always going to be noise, whether it's in the press, whether it's friends that you talk with. Markets are always moving up and down. But you have to learn to just let that go in one ear and out the other day with a long term plan you've put together it's not easy, but it's the best way to invest for the long term. Let's talk a little bit about technology. Schwab oversees investor assets of more than $ 3 trillion. How is technology changing? Your business and the way you manage all that money for your clients. We were just talking about the market volatility and ups and downs. So we use data we have on our clients to actually identify clients who might be more apt to bail out of the market during a difficult time. Reach out to them proactively and talk about why that might not be the best thing for them to do so technology is putting us in a position to better serve our clients than ever before in the past we couldn't possibly without technology without digital capabilities machine learning and then AI. Had the tools to identify people who might be apt to take steps that would not be in their best interest, and proactively try to help them avoid that. You've had roboadvisors for a few years now. How are they working out? Are they popular? With your clients. They continue to be very popular with clients. It enables them to get asset allocation, very low cost investing, rebalancing, even tax loss harvesting. In our program, without paying an investment advisory fee. So for our clients it's been a real home run. They've used it in great volume and we expect it to continue to be one of the fastest growing parts of our firm. What are the plans for it? In terms of more growth. It's still small in relative to the total assets under advisement. It is. It is. One of the things that we recently introduced As we introduced a subscription model for paying for financial planning that is done in addition to the management of money. For $ 30 a month, we offer unlimited access to a certified financial planner no matter how much money a person has. And we think things like that are going to continue to be ever more popular with investors. who recognize, hey, I'm happy to pay $ 30 a month. I may not wanna pay 1 % of my assets but for $ 30 a month, I can get all the help I might ever want. You mentioned AI, artificial intelligence a moment ago. What impact, if any, is that having on your portfolio management? It's putting us in a better position to serve our clients by identifying clients via behaviors, actions they take Research they might do on our website, asset holdings they have. We can identify people that we could never have found that x percent of people among 10 or 12 million clients who might do things that are bad for them in the long run. Now we can identify them, proactively reach out Help guide them to not make the mistakes that maybe they would have made a decade ago before we had this kind of technological capability. I understand that [ UNKNOWN ] now has a chief digital officer, which is a first. So as tech begins to dominate more and more of your business, How do you see the future Schwab? One thing that we know today is just over fifty per cent of the phone calls that come into our sevice centers, and of course that's millions of calls a year, are done by people who tried to self service, before they made the call. All those phone calls could go away With digital capabilities. And instead, those interactions with clients can be more valued at talking about their portfolio, talking about their planning, talking about their family situation. So, I think the impact of technology goes way beyond just creating a better experience for clients, but also let us add far more value. What then is the future of Fashod investment advisers? Real people helping clients, will there be still a need for them? Its different than buying a tie, its different than buying a box of something online. Money is still emotional and so when we deal with emotions, we deal with feelings and we often are far better of interracting with those feelings with another human being. We think that the people side of investment advisory is a long long run way if ever possibly going away du to technology. How do you feel about chat box, are they effective? Well they can be effective I think it depends on what they are being used for. If they used to help a client do something more efficiently more easily that can be very very benefitial. I still think, though, when it comes to money, particularly in times of volatility, people wanna talk with people. I mean, human beings are interaction oriented creatures. And so when we're feeling uncomfortable, or when we're feeling nervous, we still value human interaction. And I just don't see that going away for many, many years, if ever. [ BLANK_AUDIO ]

Charles Schwab CEO Stock Advice: Have Your Plan and Stay with It

Leadership

Walt Bettinger says that rule of thumb hasn't changed much in his time in the business.