BOSTON -- Schwab's decision to build a robo advisor rather than buy an existing platform was probably why it was denounced by digital competitors when it launched earlier this year, Walt Bettinger, Schwab’s president and CEO, told the audience at its annual Impact conference.

When Schwab's Intelligent Portfolios was unveiled in March, the firm suggested its offering was cheaper and more trustworthy than the platforms being touted by digital-first firms.

That launched a war of words with the industry's leading robo advisors, Wealthfront and Betterment, who took issue with Schwab's characterization and claims.

"I bit my lip a little bit at some of the things that were alleged," Bettinger said. "Our decision to build rather than buy probably contributed to the emotion."

Schwab's digital offering has managed to scale quickly since its launch, having gathered $4.1 billion in assets as of the end of the third quarter, according to the firm. Betterment just crossed $3 billion in AUM in November, while Wealthfront reported $2.6 billion AUM in its latest ADV filing.

Still, in his general session, Bettinger downplayed the automated advice model as a disruptive force, calling it "so overhyped."

"I don’t know of anything more overstated in its impact than robo advisors in the last 17 years," he added, to the delight of the 1,800 advisors listening.

He dismissed the business model of many digital startups as one built to flip rather than to be a long-term solution.

"When you step back and take a look at robos, we all can recognize the strategy," he said. "It's an acquisition strategy, it's about the sale of the business. Certainly you've heard this. I've certainly been contacted about it."

ROOM TO IMPROVE

Bettinger suggested that Schwab will look to improve upon the robo advice engine that exists today, in which a client's investments are allocated by an algorithm to a basket of ETFs. It can be expanded to include mutual funds, he said, and possibly individual securities.

There are aspects of robos, he acknowledged, "that make incredible sense" for certain self-directed clients and they present an ability for advisors to expand their practice and move down the economic chain and reach new clients.

But despite its innovation efforts, Schwab won't pressure advisors to adopt digital tools, Bettinger promised. "You'll decide whether it fits in your business."

Read more: