With Julien Lopez, Managing Director, Advisor Services Business Development; Rob Malone, Senior Team Manager, Advisor Services Fixed Income Trading; Susie Gonzalez, Senior Specialist, Advisor Services Mutual Fund Trading; Steve Bauer, Manager, Institutional Trading; and Kris Anest, Senior Team Manager, Advisor Custody and Trading, Middle Office Trade Away Services.
Schwab Advisor Services™
Managing Director, Advisor Services Business Development
JULIAN LOPEZ: Hello, my name is Julian Lopez, Managing Director with Schwab Advisor Services, coming to you from Phoenix, Arizona. It’s my privilege to have part of our Trading Team here with us, members of different departments within the Trading Team, that are going to help introduce what they do for all of the advisors that we work with across the country. Rob Malone, with our Fixed Income Trading Desk, welcome.
ROB MALONE: Thank you.
JULIAN: Susie Gonzales, Mutual Fund Trading. Pleasure to have you.
SUSIE GONZALES: Thank you very much.
JULIAN: Steve Bauer, with our Equity Trading Team…
STEVE Bauer: Thank you.
JULIAN: Thanks for being here.
STEVE: Thank you…
JULIAN: And Kris Anest with our Middle Office.
KRIS ANEST: Thank you.
JULIAN: Thanks, guys, for making time out of your busy schedules. So what I’d like to do is start off by asking you to introduce yourselves a little bit and tell us a little bit about what you do, what your role entails, and then we’ll get into some of the details a little bit later. Rob, let’s start with you. How long have you been at Schwab? Tell us a little bit about your role.
Senior Team Manager, Advisor Services Fixed Income Trading
ROB: So I’m Rob Malone. I manage the Advisor Services Fixed Income team and we provide back office support, we support their trading needs, and, most importantly, I think what we do is we partner with them and help them, come up with research and tools that make their firm as efficient as possible.
JULIAN: Wonderful. Thanks for being here again. Susie, mutual funds. So great to have you.
SUSIE: Thank you.
JULIAN: A little bit about yourself, how long you’ve been at Schwab and how would you describe your role?
Senior Specialist, Advisor Services Mutual Fund Trading
SUSIE: Been at Schwab for 14 years, industry total 17 years. We… on my role, we are here anything mutual fund-related for our advisors—research, you know, just a general phone call, trading, anything mutual fund-related we are support.
JULIAN: Excellent, thanks. Steve, equities. Certainly, the largest channel at Schwab, right? But certainly keeps you busy.
Manager, Institutional Trading
STEVE: Absolutely. Steve Bauer. I’ve been at Schwab for 10 years. And we help advisors execute large blocks of equities, ETFs, options, international stock, ex-cedera, anything from strategy to help with the website in regards to trading capabilities.
JULIAN: Thanks for that. Kris, middle office—Prime Broker, Trade-Away. I know there’s a lot of other things that probably come into definition of middle office. But tell us a little bit about yourself and your team.
Senior Team Manager, Advisor Custody and Trading
Middle Office Trade Away Services
KRIS: So I’ve been at Schwab for 15 years, in the industry for 30. But what we do in Middle Office is we take care of our clients across the country. We’ve got offices in Denver and in Phoenix, teams in Denver and Phoenix. We handle their trade error issues. We handle any reconciliation issues. I’m a senior manager on the Trade-Away Services Desk. So we book Prime Broker transactions and transactions that advisors custody with us, but they book… they place their trades, or execute their trades away from Schwab.
JULIAN: So let’s dive in to a little bit more about what you all do on a daily basis. Rob, let’s start with you.
ROB: I think the biggest thing we do is, number one, we have dedicated coverage. So an advisor, when you call in to our desk, you’ll be speaking with the same representative every single time. So there is an opportunity there for the trader on my team to develop a relationship with you and learn how you manage your business. So from that point, we’re able to identify what types of bonds you need in your portfolio. We can also identify solutions around training. And, in particular, I think one of our strengths is how we disseminate knowledge. So we can present Knowledge Forums with the Schwab Center for Financial Research. We can have them come to your office live, and help you with strategic discussions. We also put on quarterly webcasts that focus on a specific area of the market. And the last thing that we do is we publish all of our information on the website, so a lot of the research and back office tools available to you.
JULIAN: I think that’s great. Thank you for that. Susie, mutual funds.
SUSIE: We service only the investment advisor. There’s so many different roles that we do play, whether it’s just we are here for support if they need us, whereas we could proactively going out and running asset reviews for them, new assets coming over. We can review the different products to see if they’re available at Schwab. And then kind of go a little further to see maybe there’s a better share class out there for them. We can proactively run reviews for them and let them know, ultimately, what Schwab has to offer, the services we have to offer, and always be there to lend the best experience that we can for them.
JULIAN: Rob, let’s jump back over to you. Fixed income is an interesting story in today’s world. When you go out to an advisor, what are maybe the top two or three questions that you get from them as you’re sitting with them in their offices?
ROB: Well, there are strategic and portfolio positioning questions, of course, and that’s where we can employ the Schwab Center for Financial Research to help them guide the direction they want their portfolio to take. But the team itself, when you look at who’s on the team, we average 22 years of experience. So if you have a dedicated fixed income professional, they’re only talking about fixed income, they’re not generalists, and they’re able to speak to you and help you make portfolio-level decisions. I think that’s incredibly valuable. Then, in addition to that, we have some online tools and resources that are available. We have a fixed income portfolio analysis tool—very robust platform, allows advisor to input CUSIPs from a potential portfolio, and they’ll get an idea of what that looks like. And they can present that in an output that’s branded to their firm, they can show it to a prospect or an existing client, and they can rehearse presentations with them based on that portfolio output.
JULIAN: Susie, Mutual Funds. So what in your world do you see or hear from advisors as a top maybe two or three questions that you get in your daily activity with them?
SUSIE: You know, I think a lot with the DOL and, wanting to do the best for their clients. So a lot of it now is, ‘What tools are out there, what can the Desk do to help me manage my business, make sure my clients are in the appropriate investments that they should?’ We’ve been seeing a lot of that. And then just availability of the funds, of the fund platform. We have over 15,000 funds available out there, different share classes of everything. And they’re coming out with new funds every day, so there’s a lot of availability questions and, ‘What can I… what do I need to do to be able to get these funds available.’
JULIAN: So, Kris, Middle Office—I think there’s a common statement we hear from advisors. What don’t we know, or what should we be asking that we’re not asking currently? When you think about your world and your team as it relates to that statement, how would you help an advisor get more familiar with what you do?
KRIS: So when they call our desk and they talk to folks that have very, very deep knowledge, because, they too, are very tenured what we want to hear from them is who do they have relationships with, what other executing brokers do they have relationships with, and what it is that they want us to do to help both their firm, their executing broker, and us make every Prime Broker transaction or Trade-Away transaction seamless.
JULIAN: That’s great. Susie, we have advisors of all shapes and sizes at Schwab. We have some advisors that are just getting started out and some that have really matured and are large practices. How would you say maybe you would work with a smaller advisor, let’s just say somebody that has less than 100 million in assets under management? Do you and your team, do you cater a little bit differently knowing that the person that’s trading is also the owner who’s also doing the ops for the firm?
SUSIE: Absolutely not. We want to make the experience for every single advisor on our platform the same. We love our job. We love providing that service to them. So whether it’s a, you know, smaller advisor or, you know, one of the biggest that we have, I think the experience that they’re going to get is completely the same. We are here for them to make every interaction with us the best it can be.
JULIAN: That’s great. Rob, when I think about fixed income, Bloomberg machines come to mind quickly and quotes. Not all advisors can afford to have a specialist for just fixed income trading within their office, but that’s where you come into play. Help us understand maybe how you see your interactions with a smaller advisory firm versus a really large, complex firm.
ROB: Well, whether it’s a large firm or a small firm, I think that the biggest thing you worry about when it comes to fixed income it’s a decentralized market, it’s highly inefficient, so we want to partner with you. And, in particular, if it’s a small firm, that they don’t have an in-house fixed income staff, we want them to know that they can call us and we’ll put their bid out to our network of over 200 dealers. We’ll advocate on their behalf. JULIAN: Let’s talk a little bit about tenure. You know, I think this is so critically important and very big differentiator for Schwab, in general, but I imagine for your teams, as well. Susie, let’s start with you. When you think about your team, these aren’t professionals who are coming to this industry for the first time. We’re growing, we’re certainly investing in the future of our business, as well, but we have a seasoned group of professionals that are there for advisors. What does that look like on your team?
SUSIE: Absolutely. Yeah, we have a well-seasoned group of individuals on my team. We have two gentlemen that have been with Schwab for 25 years. With Advisor Services, it’s a little bit different. Once you get down to Advisor Services, it’s such a great group of people, true professionals, and people don’t want to leave. It’s a great place to be. It is a great place to be. I think on my team, our tenure, we have a little newer folks on there, but altogether tenue I would say would be over 15 years.
JULIAN: Certainly you know, a lot of intellectual capital that we’re bringing to the table.
JULIAN: Kris, let’s talk about your team. So tenue, what does you team look like?
KRIS: So I have an employee, I would say now she’s probably bumped up to number five, she’s been with Schwab for 36 years.
KRIS: So talk about deep knowledge. She helped build the Prime Broker desk. The average tenure on my desk, ‘cause I do have a few newbees, is about 12 years. But again, just like Susie said, the tenure in that knowledge it’s just… it’s so deep, and people don’t want to leave.
ROB: I’d like to go back on what Kris said real quick. I mean, you can’t hack experience.
ROB: So to have a team full of people with 22-plus years of experience, on the surface that’s great. When you think about the connections they have in the industry…
ROB: …particularly, in fixed income…
ROB: …the strength connections they have, the dealer network they’ve developed over the years…
ROB: …that experience is completely invaluable. And I think that across all four of our teams you know, 12-plus years, 15-plus years, 20-plus years of experience, that’s incredible.
JULIAN: Yeah, and particularly in Fixed Income, right? It’s even more critical that we have some of that experience.
JULIAN: …the knowledge and awareness, and to your point, the network of dealers that are out there. Many of our advisors come to us and say, ‘I have relationships already. I just need to execute what I need to execute with you, but I have a lot of these resources.’ And so those networks that you bring to the table through your team are critical.
JULIAN: Yeah. Steve, what about your team?
STEVE: So our team, our average tenure is 18 years, in spite of me who’s only 10 years. But, we’ve had a bunch of former advisors, Wall Street traders, floor traders, option floor traders on our team that really bring a wealth of knowledge and experience. And we’re all constantly learning from each other every day, and learning from our advisors, and sharing that knowledge with advisors every day. I think we all really get a thrill out of being involved in the market every day and being a sounding board for our advisors.
JULIAN: Rob, let’s jump over to you. What is it about your role that you particularly enjoy?
ROB: Well, last week, I was in the field visiting with advisors. We had a number of visits in Seattle and Portland. And the one thing I like is they all have a story about how they started their business, right?
ROB: It was a one-man shop 10 years ago. They’ve developed trust among their clients. They’ve turned it into this successful business model. And, for me, it’s really simple. I like partnering with entrepreneurs and help them become successful.
JULIAN: Steve what gets you up in the morning? What is it that you love about what you do?
STEVE: Well, I love markets and I love investing and helping our advisors and their clients become financially fit. I love when an advisor gives us an order and they give us discretion over that order, and we’re able to surprise them in a good way over how great that execution was.
JULIAN: Kris, Steve, Susie, Rob, times flies. Thank you so much for making time out of your busy schedules to join us today. It was great to see you.
ALL: Thanks, Julian.