Jim McCool, executive vice president and head of institutional services at Schwab, is a pilot. It's important to know that, because it helps to explain his air of complete, goodnatured calm (I assume, having flown in plenty of bad weather, that all pilots know how to stay cheery in the face of disaster) in what cannot be an easy spot. As McCool welcomes everyone to the Impact conference this month, he's dealing with:

* business turmoil as the 6,000-plus RIAs who custody with Schwab work to restore businesses battered by the market implosion;

* regulatory turmoil as Washington debates financial services reform;

* reputational turmoil as Schwab defends itself from a politically ambitious attorney general (Andrew Cuomo of New York) who has filed a lawsuit over Schwab's sales of auction-rate securities.

McCool was dealing with the first two problems when we met in San Francisco in late July. It was the first that occupied most of his attention.

Funny enough, he says, when he took over Schwab Institutional from Charles Goldman in November, 2008, and added those responsibilities to his previous job of running the company's 401(k) business, the board told him, essentially, "You've inherited two of the fastest-growing businesses at Schwab.... Don't screw that up."

He laughs now, but he spent most of the following four months in the air, traveling to meet advisors on their own turf. They were worried about their businesses and exhausted from holding their clients' hands. They, too, needed attention. "I didn't go out with any pre-done speeches," McCool recalls. "It was more about connecting."

A seasoned executive who has spent 25 years in financial services—14 of them at Schwab—McCool set about figuring out what he could offer advisors to restore their confidence and help them rebuild business. For the immediate term, his goal was to help them regain profitability, which led to Schwab's announcement in June that the company would temporarily waive account transfer fees when RIAs brought in new clients. What's more, Schwab announced that it would reimburse end clients for any transfer fees charged by their former investment firm.

The discount has helped RIAs recruit as well as sign up clients who were previously frozen, unable to decide whether to move. Since the announcement of the fee waiver, McCool says, advisors have closed 17 deals expected to bring in $3.5 billion in new assets this year.

In 2008, despite the downturn, Schwab gained $60 billion in net new assets, $13 billion of which came from advisors turning independent. This year, through May, some 74 advisors turned independent. But the assets they bring with them are less bountiful. "Last year you saw $80 million teams," McCool says. This year they're $50 million teams and often are more interested in joining a firm than in starting their own.

BACK OFFICE FOCUS

Over the long term, McCool is focused on helping advisors streamline their back-office operations and make their businesses more scalable. Some of this will come from improvements to Schwab's platform that will be unveiled at the Impact conference. More will come as McCool's team completely reinvents the platform over the next 3 to 4 years.

In the meantime, he wants to help advisors get more out of the tools they've got. More than 2,000 advisors used Schwab's business consulting services last year, McCool says, and their questions have changed.

Whereas two years ago advisors asked how to find and nurture talent, now they want to know how to build a more robust back office. Efficiency, capacity and technology are the name of the game, and McCool's aspiration is to make advisory practices 33% more efficient. He hopes to realize that goal through a relationship with advisors that centers on logistical support and practice management, as well as connecting with the community.

Schwab's consulting relationships will help it realize another long-term goal. The company is using its various streams of research, from its Best Managed Firms studies to its technology adoption scorecards and consulting results to develop business intelligence it can share with advisors. Trish Cox, chief operating officer for advisor services, is leading this effort.

What Schwab is not going to build is scalable advice products for RIAs. "High net worth clients want sophisticated custom advice and that is not scalable," he says. "Our job is to help advisors do their own custom work more efficiently and to make sure they have no issues when clients ask them about the safety and security of their money."

TRANSPARENCY AND TRUST

It's no surprise that Schwab is a strong advocate of fiduciary relationships between RIAs and their clients. McCool sees this as part of the high net worth relationship and an essential distinguishing factor between an RIA and a rep behind the counter at a Schwab office. Of course, after Madoff, every fiduciary is emphasizing transparency-it's the RIA's proof that he or she is not a crook. As the old saying goes, sunlight makes the best disinfectant.