Download Schwab PowerPoint template

FPA of
Georgia
Bernie Clark
Executive Vice President
Advisor Services
May 24, 2017
Compliance #0517-5UY
Advisor Services
1,800 Schwab team
members dedicated
to custody, trading
and operations…
Over 7,000
advisors
Representing
$1.3 trillion in
assets*
*Data as of Q4 2016. Advisor Services total assets includes RBS and Corporate Brokerage Retirement Services
(CBRS) assets and excludes “retail assets” resulting from Schwab Advisor Network and Advisor Source.
2
Charles Schwab Corporation
Today’s Discussion: The Evolving Role of the
Advisor
 Economics/Financial Models
 The Future of Advisory Relationships
 Differentiation
 Next Generation Succession Planning
 Advocacy
3
Charles Schwab Corporation
Economics & Financial Models
Profile of an RIA Firm
Schwab & Industry Asset Growth
CAGRs
Key Metrics of a $250M+ firm from our
9.7% Schwab ASI Assets
9.1% RIA Industry Assets
2016 Benchmarking Study1:
 Average account size: $1.60M
4.7% S&P 500
 Number of clients: 350
 Year-end AUM: $588M
 Standardized operating margin: 27.2%
2006
2008
2010
2012
2014
2016
 Age of firm: 21 years
 5-year organic growth CAGR2: 5.4%
Note: CAGR is the compound annual growth rate from 2006-2016. Chart indexed to 2006 levels. Source: Charles Schwab; Yahoo Finance.
•
Schwab Advisor Services Institutional (ASI) assets exclude Retirement Business Services (RBS) assets. Excludes “retail assets” resulting from Schwab Advisor Network® (SAN) and Advisor Source
•
2016 is a preliminary Schwab estimate assuming 2016 RIA market growth was in line with ASI asset growth
•
Excludes dividend yield
2016 RIA Benchmarking Study from Charles Schwab.
1. Median results for all firms with $250M or more in AUM, unless otherwise noted. 2016 RIA Benchmarking Study from Charles Schwab, fielded January to March, 2016. Study contains self-reported data from 1,128 firms. Participant firms
represent various sizes and business models categorized into 12 peer groups — 7 wealth manager groups and 5 money manager groups, by AUM size.
2. Organic growth from net asset flows is the change in a firm’s assets from new, existing, and lost clients before investment performance is taken into account, and it excludes the growth from acquisition or divestitures, and from advisors joining
or leaving.
4
Charles Schwab Corporation
The Future of Advisory Relationships
External forces…
5
will drive internal change.
Technology
Fee structure
Specialty
Services
Millennials
Digital
Experience
Talent
Charles Schwab Corporation
Differentiation
Personal interaction and assistance to
manage aspects of a client’s financial life
Relationship
management
Financial planning, estate planning,
charitable giving, tax planning, etc.
Value-added
services
More
personalized and
differentiated.
Potential for
building trust and
loyalty.
Asset allocation, portfolio construction,
ongoing portfolio management
Investment
management
More easily
automated and
replicated.
Potential for
commoditization.
6
Charles Schwab Corporation
Next Generation Succession Planning
Many Advisors are Nearing Retirement
38.5% of advisors
are transitioning
within 10 years
39.4% of assets are
transitioning within
10 years
Chart Source: U.S. RIA Marketplace 2016, Cerulli Associates
7
Charles Schwab Corporation
Advisor & Industry Advocacy
RIA industry awareness and talent development
Advocacy
for
Advisors
 RIA Talent Advantage™
 University Grants
 RIA Student Intern Program
 Investment in advocacy advertising campaign
 Executive Leadership Program
Washington DC advocacy
 Department of Labor Fiduciary Rule
 Anti-money laundering
 Ongoing outreach
8
Charles Schwab Corporation
Q&A
9
Charles Schwab Corporation
Appendix & Disclosures
Slide 2
Note: Data as of Q4 2016. Advisor Services total assets includes RBS and Corporate Brokerage Retirement Services (CBRS) assets and excludes “retail
assets” resulting from Schwab Advisor Network and Advisor Source. Schwab Retirement Business Services are provided by Charles Schwab Bank and
Charles Schwab & Co., Inc., separate but affiliated companies and subsidiaries of The Charles Schwab Corporation. Brokerage products and services are
offered by Charles Schwab & Co., Inc. (Member SIPC). Charles Schwab Bank provides trust, custody and deposit products and services with respect to
retirement plans.
Slide 4
Note: CAGR is the compound annual growth rate from 2006-2016. Chart indexed to 2006 levels. Source: Charles Schwab; Yahoo Finance.
1. Schwab Advisor Services Institutional (ASI) assets exclude Retirement Business Services (RBS) assets. Excludes “retail assets” resulting from Schwab
Advisor Network® (SAN) and Advisor Source.
2. 2016 is a preliminary Schwab estimate assuming 2016 RIA market growth was in line with ASI asset growth.
3. Excludes dividend yield.
Metrics Source: 2016 RIA Benchmarking Study from Charles Schwab.
1. Median results for all firms with $250M or more in AUM, unless otherwise noted. 2016 RIA Benchmarking Study from Charles Schwab, fielded January to
March, 2016. Study contains self-reported data from 1,128 firms. Participant firms represent various sizes and business models categorized into 12 peer
groups — 7 wealth manager groups and 5 money manager groups, by AUM size.
2. Organic growth from net asset flows is the change in a firm’s assets from new, existing, and lost clients before investment performance is taken into
account, and it excludes the growth from acquisition or divestitures, and from advisors joining or leaving.
Slide 6
Source: Automated Investing MKT 2015, Charles Schwab.
Slide 7
Chart Source: U.S. RIA Marketplace 2016, Cerulli Associates
10
Charles Schwab Corporation