Schwab — April 8, 2023

Locator: 44341B.

Schwab.

Four links.

JD Power, link here.

TROY, Michigan: 4 April 2023 — In 2022, Wall Street experienced its worst year since 2008, with the S&P 500 finishing down nearly 20%.

Mirroring that performance, investor satisfaction with full-service investment advisors plunged 17 points (on a 1,000-point scale) year over year, according to the J.D. Power 2023 U.S. Full-Service Investor Satisfaction Study.

That lockstep movement between market performance and investor satisfaction highlights a real challenge in the wealth management industry.

Key findings of that study:

• full-service advisor satisfaction plunges;
• a small fraction of advisors are currently offering comprehensive advice;
• just more than half of full-service wealth clients have financial plans;
• younger clients ready to vote with their feet.

Comment: it would be interesting if there is a correlation between satisfaction with one's FSIA and face-to-visits vs remote visits only.

I'll get back to that comment later.

Inflows, link here.

March 17 (Reuters) - Financial broker Charles Schwab reported $16.5 billion in core net new assets for the week on strong inflows from clients moving funds amid several high-profile collapses that have whipsawed the U.S. banking sector.

The Texas-based company's stock pared losses to trade 3.2% lower. It had fallen as much as 6.4% earlier in the day.

Charles Schwab had also recorded an influx of $4 billion in assets to its parent company last Friday as clients shifted assets to the broker from other firms, CEO Walt Bettinger told Reuters in an interview earlier this week.

Schwab ETF, link here.

(Bloomberg) -- Wall Street’s model-portfolio boom appears to have flashed its invisible power for the second time in this week after a once-sleepy Charles Schwab Corp. bond exchange-traded fund received another monster inflow.

About $2.6 billion entered the Schwab 5-10 Year Corporate Bond ETF (ticker SCHI) on Thursday, according to data compiled by Bloomberg, adding to the nearly $2 billion that flowed into the fund on Monday.

Assets in the ETF have surged more than ten-fold from the end of last week, racking up the largest inflows among US ETFs tracked by Bloomberg over that period.

While it’s often difficult to determine precisely who is behind a fund flow, such large additions suggest the adjustment of a model portfolio. These products are essentially off-the-shelf investment strategies, usually comprising a set of ETFs, which are offered by large asset managers direct to their investors. Falling fund management costs, improving technology and a new era of retail investing have combined to see their popularity explode in recent years.

AUM ranking, link here. When you're #49, you try harder. 

Comment: it would be interesting if there is a correlation between satisfaction with one's FSIA and face-to-visits vs remote visits only.  

We are quite fortunate. We live in a city that has a brick-and-mortar Schwab office. My wife and I like to meet with our assigned broker on a monthly basis, but, in fact, only accomplish that ever three or four months. However, our broker -- not Schwab-the-office but our actual broker -- schedules a monthly luncheon and presentation for her clients. Perhaps more on that later. 

Face-to-face visits with one's broker, in my mind, makes all the difference in the world. The monthly luncheons are "the cherries on top of those ice cream cones."

With regard to a plan. 

I have never been happier nor more relaxed now that I have a plan. I've always had a "general" plan but nothing really refined, defined, or written down. About a year ago, I put my plan in writing so that my heirs could better understand the portfolio they will inherit. I review the plan monthly and update it as needed. 

The components of the plan:

• goal;
• time horizon;
• investment philosophy;
• pyramid picture:
• foundation
• emergency fund; monthly expenses; life insurance; 
• savings
• savings for specific big-ticket items; 
• investing
• managed investments
• personal ("unmanaged") investments
  
• investment dollars;
• asset buckets from which to draw;
• asset mix for new dollars;
• when to invest
• revenue stream (source of investment dollars);

Financial advisor:

• for now, no financial advisor (perhaps I will comment on this later)
• however, my estate will include funds for a financial advisor to advise my heirs and executor

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them. 

Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source. 

Even more links.

Bloomberg, link here. 

From the linked article:

Charles Schwab Corp.’s top executives said core net new client assets hit $53 billion in March, a month that rocked the company as turmoil engulfed the broader banking sector.

The March flows were the second-highest for that month in the firm’s history, its founder and namesake Charles Schwab and Chief Executive Officer Walt Bettinger said in a statement Thursday.

They’ve been seeking to assuage concerns about Schwab’s outlook, after investor attention turned to ballooning unrealized losses in its financial statements. Investors dumped shares of Schwab, which lost more than 37% of their value in the first three months of the year — making it Schwab’s worst quarter since the 2008 financial crisis.