With Scott D’Alessandro, Managing Director, Advisor Services Business Development; and Rob Barnes, Director, Managed Accounts and Alternative Investments
Schwab Advisor Services™
Managing Director, Advisor Services Business Development
SCOTT D’ALESSANDRO: Well, good afternoon, everyone. My name is Scott D’Alessandro, and I’m Managing Director for Business Development in the Eastern Division, and I’m here with Rob Barnes, who is our Sales Director of Managed Accounts and Alternative Investments. Welcome.
ROB BARNES: Thank you, Scott.
SCOTT: First off, can you just share how long have you been with Schwab?
Director, Managed Accounts and Alternative Investments
ROB: Right, 17 years, all that time in our, Managed Account organization, out of San Francisco. And, so working all that time with advisors through our Advisor Services group.
SCOTT: I know that, you know, the industry, there’s a lot of folks in it. What do you view as Schwab’s, I would say, strengths…
ROB: From a platform solution standpoint, Schwab, historically, since I’ve been here, is what we call open architecture, meaning you, the advisor, if there’s a manager or fund that you want to hold at Schwab for your clients, we’ve got great people in place that can work with those funds’ managers to get the proverbial plumbing in place so that the managers can trade your accounts at Schwab. And so it’s one of those where it’s the steady blocking and tackling of doing that and supporting a platform. But it’s so much more than just sort of the nuts and bolts. You know, I get back to people again, and just that sort of institutional memory, the experience, and sort of being in the industry, and really appreciating it for what it is, and sort of the independent mindedness. And, so I think there are a lot of reasons to appreciate Schwab and to be proud of, but I think it really just keeps coming back to the people, and, obviously, technology is such a big thing these days, as well.
And beyond that I think our partners in the asset management world, right? So, again, separate accounts. Schwab is very highly regarded in that way. And so, oftentimes many of the money managers that you… the advisor you’re dealing with have a long track record and history of working with Schwab and trading at Schwab, as well. So we’ve got a great reputation in the asset management world, as well.
SCOTT: One other thing that I hear a lot is they’re so much information coming to these folks that are leaving the firms that it’s so complicated. What would you tell them if they’re coming here and they’re looking at separate account management.
ROB: My message in these situations is you can do it yourself, right? You can go out, you can hire a manager direct that we call dual-contract—right?—where you have an agreement between your firm and the manager, and you’re setting your own terms. And, really, Schwab is acting as custodian in those situations. We’re really not in the middle of the relationship mandating what the fees and the minimums should be, all that. And know that Schwab, you know, we always try and provide the solution, right? So there’s the sort of do-it-yourself, but then where’s the solution?
And know that there are any manner of capabilities to help you sort of find your way, right? Due diligence. Schwab does research on managers. We have opinions on managers. So, obviously, you can rely on Schwab for that. We also provide a database search capability, right? So, oftentimes, you’ll see an advisor who’s trying to replace a manager, and I’ll spend some time with them getting acquainted with our database capability. We work through… Informa we’ve private labeled Informa, who’s kind of a Morningstar of separate accounts. So you can go out and run a search… let’s say, a large cap growth search, and ‘Show me all large cap growth managers that have, you know, a 10-year track of top quartile performance for Sharpe ratio and batting average,’ or something like that.
So you take this vast universe of managers at Schwab and, hopefully, narrow it down to two or three that you can ultimately call on and interview, and really kind of do more investigation to see if they really fit, and, you know, have a shared philosophy, and connect with their people, as well.
SCOTT: What do you love about your job?
ROB: I get great joy from the outcomes. And so I love to see people succeed. One of my things is meeting advisor 10, 15 years ago, and going into their office and it was such a mom and pop originally, and now look, there’s 50 people in this office, and what a story it’s become. Just seeing that sort of success manifested, really I enjoy that.
SCOTT: A concern that I hear sometimes from advisors is ‘If I leave the wirehouse can I get the same product that I have there?’
SCOTT: Sometimes it’s proprietary, other times we may not have it…
SCOTT: …but it could be added.
SCOTT: How would you address that to them?
ROB: Right. So know that before advisor makes any type of move, right? We will… our team does a thorough review of all your current holdings, right? So you’ll know with confidence, ‘Okay, of the seven managers I use, six are already set up at Schwab, and the one that isn’t Schwab will work to get that one set up.’ Sometimes folks will allocate to proprietary in-house funds, and oftentimes those aren’t, necessarily transferable, but maybe what you can do is develop alternatives where maybe the fund firm that you offer a version of it here at Schwab that over time you can liquidate the other position and reposition here at Schwab.
And know that we’ve got dedicated people on service teams that can help you in those situations and in setting up those funds and getting them onto the Schwab platform and so forth. And I think the message and the takeaway in these situations is that, ‘Oh, okay, Schwab has the ability to help me sort of find options.’
SCOTT: Well, Rob, I wanted to thank you very much for your time. It’s been a pleasure having you here and sharing some of your information with us here. So, again, thank you so much.
ROB: Thank you, Scott. Appreciated it.