Schwab deploys $1 billion annually on behalf of RIAs

As a reporter attending the Schwab conference, I am asked all day long by people what I am “seeing” this year and what the buzzes and undercurrents are for 2009. At past conferences I relied heavily on the opening remarks made by the head of the RIA unit to find evidence of change. This year Jim McCool, Trish Cox and Bernie Clark shared the speaking duties and they emphasized — in the most general terms — that big resources continue to be funneled in the direction of RIAs. But as I canvassed RIAs after the conference, they told me that the speech fit a pattern that in one sense tells a story about the evolution of Schwab’s advisor business. Here is some of what I learned.

Schwab Advisor Services puts $1 billion of resources annually into serving registered investment advisors, said Jim McCool, executive vice president and head of Schwab Institutional Services in his opening remarks this morning at his company’s annual advisor convention in San Diego.

These dedicated resources include the salaries of 200 sales professionals who organize 350 events a year for registered investment advisors and prospective RIAs, according to Bernie Clark, senior vice president of sales and relationship management.

It also includes 1,000 people overseen by Trish Cox, chief operating officer of Schwab Advisor Services, she said. Cox’s employees provides service, products and technology to RIAs.

These three executives stood about 30 feet apart on the stage and each made a few remarks before ceding the floor to McCool.

Cox told an anecdote about how an impostor was foiled by Schwab this year when it tried to send a fraudulent wire. Her point was that Schwab quietly keeps RIAs safe every day.

Clark offered a jesting reassurance about the importance of RIAs engaging in mergers and acqusitions. “We’re not going to be acquiring RIAs I assure you,” he said. “Matchmaking can only occur on a local level.”

McCool then showed a video of several Schwab clients who testified on camera about the silver lining of the past year. The message: we have been through a grueling time with our clients and the shared adversity has brought us closer than we ever were before.

“This isn’t about me,” he said. “It’s about you.”

The McCool presentation offered RIAs no coveted sneak peaks at Schwab’s future. Neither did it include comments on how Schwab will work to resolve concerns of advisors, noted some advisors and exhibitors I spoke with after that morning session.

McCool emphasized to advisors that they have the “entire Schwab brand” standing behind them.

Some advisors I spoke with after the session expressed frustration with what they called a new era of bland communications from their custodian.

“That’s the way [McCool] spoke at the Explore conference this year,” said Greg Friedman, managing principal of Salient-Friedman Wealth Management LLC of Novato, Calif. “It lacked specifics and it didn’t resonate on issues.” Explore is Schwab’s elite conference held for a smaller number of larger RIAs.

This general approach by McCool probably reflects Schwab’s maturation as a custodian, said Martin Bicker, principal with Martin Thomas Wealth Management of Palo Alto, Calif.

“I don’t know if you’re going to see the old days of transparency,” he said. “Chuck’s not here. It’s big corporate. It’s big business.”

The more corporate way that Schwab talks to advisors shifted from even where it was a few years ago, Friedman adds.

“It’s not [the approach of] [Charles]Goldman and [Deborah] McWhinney” who spoke on a more personal level, Friedman said.

McCool clarified attendance statistics for the conference. There are 1,200 RIAs, 1,000 exhibitor-related people and 300 Schwab employees attending IMPACT, he said.