Writer’s pledge: I won’t write an article every time that Charles “Chuck” Schwab prepares to take the stage to speak. The truth is that it happens infrequently and the circumstance here seem interesting, especially when you cajole the ever-sardonic Ken Fisher into making a comment or two about it.
Charles “Chuck” Schwab will receive a maintaining-focus-on-the-consumer award and then give a speech about that subject.
The chairman and founder of his eponymous San Francisco-based company will accept the award as part of a client event held bi-annually by Tiburon [Calif.] Strategic Advisors. The event will be held at the Ritz-Carlton Hotel in San Francisco Oct. 7-8.
The choice was not difficult, says Charles “Chip” Roame, managing principal of Tiburon [Calif.] Strategic Advisors.
“He’s had an unending focus on consumers and their needs, even currently chairing the president’s committee on consumer financial education,” he says. “There are a handful of other worthy recipients of this award and we hope to honor them in years to come. Think Jack Bogle [formerly of Vanguard], Ned Johnson [of Fidelity Investments] and Joe Mansueto [of Morningstar].”
Sharing what’s left of the spotlight next week will be Ken Fisher, CEO of Fisher Investments of Woodside, Calif., a Forbes magazine columnist and the nation’s largest RIA. He gets the challenging-conventional-wisdom award.
To the question of what it’s like to be a fellow award recipient with the Schwab founder, Fisher invokes the hierarchy of the Catholic Church.
“It’s a little like asking what it’s like to get an award on the same platform as the pope,” he says.
Though Fisher Investments with its $33 billion of assets under management and Schwab with its $1.2 trillion of total assets are in different universes of size, Mr. Fisher notes [at my prompting] that there are some interesting parallels between the two companies:
1. Both companies have founders from San Francisco
2. Both companies are identified with the founder’s name
3. Both companies have homogenized the customer experience across the spectrum of investors
4. Both companies intensely measure every bit of their performance and output [“If you can’t measure it, you can’t manage it,”’ Fisher quotes a business guru that he respects.
5. Both companies use specialization of labor that allows them to offer high levels of service from remote locations. Schwab runs much of its high-end service from Denver and Phoenix. Fisher is migrating his workforce north from Silicon Valley to Camas, Washington.
But despite these similarities, Mr. Fisher offers chiding criticism of Mr. Roame for his judgment in handing out the awards.
“Chip missed the boat,” he says. “He could have given both awards to Chuck. It shouldn’t be me. It should be a two-fer.” The two examples Mr. Fisher gives of Mr. Schwab challenging conventional wisdom include his fathering of discount brokerage and mutual fund supermarkets. [He might have thrown in that Mr. Schwab was the first to create an asset custody service for RIAs.]
Wisdom of wirehouses
Mr. Roame does not refute Fisher’s contention. “In many ways, Schwab as a firm challenges all conventional wisdom of the wirehouses, so I agree [with Fisher],” he says.
Mr. Fisher is plenty unconventional, Mr. Roame adds. He is a self-described “junk-mailer” when it comes to attracting clients and once the clients agree to use Fisher Investments, no matter how wealthy, their account gets managed from a call center.
For Mr. Schwab, competing against Mr. Fisher is already a win-win. Fisher is his company’s largest RIA customer for its custody unit so the assets largely end up with Schwab anyway.
Deeper in the shadows behind these two men are a few other noteworthy speakers at the Tiburon CEO Summit. They include: Steve Lockshin, CEO of Convergent Wealth Advisor who was rated #2 by Barron’s on its Top 100 Independent Advisors listing and Jim Weddle, managing partner of Edward Jones. He is only the fifth person in the company’s history to hold that position. Jon Baum, CEO of Dreyfus Corp. and John Calamos, CEO of Calamos Asset Management will also speak.
Editor’s Note: When I interviewed Ken Fisher, he was at the visitor’s center of an ancient forest in Kuala Lumpur as part of his participation in the Forbes Global CEO conference. The cell phone coverage was spotty and necessitated multiple calls. But he was able to let me know that though no popes were present, attendees included Jeff Immelt, CEO of GE, Rob Walton, chairman of Wal-Mart and Ed Doleman, CEO of Christie’s International.