RIA division gets leg up at Schwab amid management shift

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Charles Schwab’s newest organizational changes will elevate the prominence of its RIA channel on the executive team while cutting ties with one of its highest paid employees.

Bernie Clark, head of Schwab Advisor Services, will now report directly to CEO Walt Bettinger, according to the custodian and retail brokerage.

Previously, Clark reported to senior executive vice president Jonathan Craig, who leads Schwab’s Investor Services, Retirement Plan Services and marketing, and who also reports directly to Bettinger.

The executive shake-up puts Schwab’s RIA arm in a key leadership seat at the company following the recent success of the division’s client asset gains.

The Advisor Services division was responsible for 52% — or $19.3 billion — of the $37 billion in new assets at Schwab during the second quarter, which ended in June. The success of the RIA channel was favorably noted by Morgan Stanley and William Blair analysts in both firms’ quarterly equity research reports on the company.

A Schwab spokesman declined to comment on the reason for the reorganization or make any of the executives available for an interview. It was originally reported by RIABiz.

Executive Vice President Terri Kallsen — who had led the company’s retail channel — and Chief Marketing Officer Andy Gill are leaving the company this week, according to Schwab.

The decision marks a shift for firm, which has largely ridden its equity-fund offerings.
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Kallsen, a CFP, drew the fourth-largest paycheck at the company, only surpassed by Bettinger, Chairman Charles Schwab and COO Joseph Martinetto. In 2018, Kallsen made over $3.2 million in total compensation, according to a company disclosure filed with the SEC. Kallsen was eligible to receive about $2.2 million in salary and benefits in the event of a termination, according to the 2018 SEC form.

The executive had overseen more than 350 Schwab branches with approximately 7,000 employees, according to statements made previously by the company. She had been with Schwab for about seven years and served on the board of directors of the Charles Schwab Trust and the Charles Schwab Foundation.

While Kallsen oversaw Schwab’s retail division, the brokerage launched a subscription-based pricing model for its hybrid robo advisor, Schwab Intelligent Portfolios, which now holds over $40 billion in assets.

In April, the executive was named “Financial Woman of the Year” by Financial Women of San Francisco, and she is set to deliver the keynote address later this year. The organization did not respond to a request for comment on whether she will still deliver the address.

Former CMO Gill had been with the company in various roles since 2003, according to his LinkedIn profile.

TD Ameritrade will soon experience its own leadership adjustment. Earlier this week, CEO Tim Hockey said he was leaving the company following a disagreement with the board over the future direction of the company.

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Clearinghouses/custodians RIAs C-suite Career moves Compensation Walt Bettinger Bernie Clark Charles Schwab