Schwab layoffs ‘still to come’: CEO Walt Bettinger

A day after cutting 1,000 jobs from the newly-acquired TD Ameritrade custody business, Charles Schwab Corp. chief executive Walt Bettinger kicked off the Schwab’s virtual conference by confirming that additional job cuts are “still to come.”

“We’ve had to part ways with some incredibly talented people,” he told the audience of 2,100 virtual attendees at the 30th annual Schwab Impact conference during the opening keynote presentation Tuesday morning.

“Unfortunately, it’s the nature of combinations like this,” Bettinger added. “By combining our forces and continuing to operate through our clients’ eyes we’re going to be stronger than we could have ever been separately.”

The keynote discussion with Schwab’s head of adviser services Bernie Clark marked the beginning of a virtual conference that replaced an originally scheduled in-person gathering in Boston.

It was also presented as the first and most transparent comments from the two executives since the $22 billion acquisition of TD Ameritrade closed earlier this month. Citing a full consolidation that brings together $6 trillion worth of assets and is expected to take up to 36 months, Clark said, “It’s early days,” and that the company is focused on keeping the lines of communication open during the process.

“Diving into it, we’re trying to create as much transparency as we know,” he said. “We want to be clear, honest and transparent in the things we know, and in the things we don’t know.”

Addressing specific points that Clark said he was unable to fully address prior to the closing of the acquisition, he addressed some of the hot-button issues facing advisers who are now in a custody relationship with the combined enterprise.

“We do not have a minimum for assets under management,” he said. “It’s not my job to tell you when you’ve been successful.”

On the matter of potential custody fees, Clark said, “No custody fees are planned into the future for sure.”

In terms of the logistics of moving thousands of client accounts onto the combined platform, Clark said, “We want to be as paperless as we can.”

He also said, while the Schwab Advisor Center will be the foundation of the custodial platform, popular TD programs including Veo One and ThinkorSwim will be a part of it. “The future platform will deliver the best in a collection of capabilities,” Clark said. “It’s about continuing to add capabilities.”

In terms of a snapshot into the future, Bettinger said the benefits of scale and a brand will not be enough to stay ahead in a competitive marketplace. With that in mind, he said, “Direct indexing will have an impact; it makes a lot of sense for a lot of investors.”

“It’s one of the reasons we were so excited to acquire the technology and talent of Motif earlier this year,” said Bettinger, adding that fractional shares will also help bring more smaller investors on board.

“Customization will play a major role going forward,” he said.