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Charles Schwab Corp. last week handed the reins of its registered investment adviser custody business to Bernard “Bernie” Clark who had run sales and relationship management for the Advisor Services group.
The promotion marks the first time since Charles Goldman was pushed aside as head of the business in 2008 that a single executive will be focused solely on Schwab's industry-leading custody platform. When he left, the RIA business was consolidated with Schwab's retirement services business under the leadership of James McCool, who ran retirement services.
“While the people on my leadership team aren't changing, their functions and charters are as we unite sales, service, operations, technology and financial accountability under one leader for each of our institutional businesses,” Mr. McCool, Schwab's executive vice president of institutional services, wrote in an internal memorandum. “Schwab Advisor Services will now report solely to Bernie Clark.”
Mr. Clark said in published reports that Jon Beatty will assume his role of managing sales for the RIA group.
Trish Cox, who was chief operating officer of the RIA unit, is taking a new role running corporate brokerage services, which include stock plan administration, mutual fund clearing, investment-only sales to employers and directed, or designated, brokerage.
“We're making these changes to further sharpen our focus on each of the unique institutional businesses and expand leadership opportunities for both Bernie and Trish,” wrote Mr. McCool, who came under some fire from advisers during his early tenure for failing to reach out to them beyond the retirement business that he ran.
Mr. McCool and Benjamin Brigeman, head of Schwab's retail-brokerage business, are protégés of Schwab chief executive Walter Bettinger, who sold his retirement-plan-servicing business to Schwab in 1995.
The moves come during a stressful time for retail brokerages. To maintain market share, the firms have been waiving hundreds of millions of dollars in money market fees, cutting brokerage commission prices and waiving selective fees for retail investors and advisers.
Fidelity Investments last week said that it has cut commissions across the board for online trades to $7.95, down from as much as $19.95 previously. The company is also waiving commissions on the iShares family of 25 exchange-traded funds.
Schwab last month lowered its online trades to $8.95 a trade, from as much as $12.95, and waived fees on its six proprietary ETFs.
The rejiggering at Schwab also comes as Fidelity deals with its own management shifts. The firm said last month that Mr. Goldman, who joined the privately held company last year to head its RIA custody and correspondent-clearing units, is leaving in March to pursue other opportunities.
Mr. Clark, 51, joined Schwab in 1998 as senior vice president for institutional trading and operations, and also spent time as a client services representative in its retail-brokerage unit before moving to the RIA custody sales unit. He has also worked in operations and sales positions at Deutsche Morgan Grenfell, and at Salomon Brothers and Emigrant Services Bank. Mr. Clark has a bachelor's degree in accounting from St. John's University in New York.
Advisers' initial reaction to the move was muted.
“My immediate reaction is to take them at their word,” said Greg Friedman, president and co-founder of Private Ocean, an RIA formerly known as Salient Friedman Wealth Management. “They are trying to restructure things a little, creating some opportunity for managers, and better focus.”
Aside from startup glitches in¬volving custody of alternative investments after Mr. McCool took over, Schwab's services have continued on a high level, Mr. Friedman said.
“I'm confident that Bernie's long tenure and understanding of the adviser business will continue to provide value, and help you focus on your clients and grow your business,” Mr. McCool wrote in his memo.
Bradley Alford, head of Alpha Capital Management, which moved most of its client assets to Schwab from Fidelity 18 months ago, said that he has never met Mr. Clark and had no immediate reaction. “As long as they leave us alone and let us do our thing, I am satisfied,” he said.
Schwab spokeswoman Alison Wertheim didn't return a call seeking comment about the changes.
E-mail Jed Horowitz at [email protected].
