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Walt Bettinger comes out swinging during analysts' call, and shares pop, on assurances Schwab can ride out gale force interest rate pressure on its balance sheet

The Schwab CEO deflected blame, promised to stay 'conservative,' and left Wall Street analysts wondering why Schwab won't dump bonds and offer better rates for client sweep cash

Author Lisa Shidler April 18, 2023 at 3:01 AM
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Walter Bettinger: 'Our franchise strength and financial model remain very much intact.'
Brooke Southall and Keith Girard contributed to the editing of this article.

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Biz Briefs: The sorry scene at my local First Republic branch • Schwab launches new (smaller) lay-off round • Schwab hoovers pennies passing FINRA fee to clients • Gensler pleas for funds • Fidelity owner's private equity pres. retires • an Orion-Envestnet staff switcheroo • LPL dumps FutureAdvisor

Range Rovers screeched in and drivers joined a grim queue to get their cash, and cookie • The Schwab-TDA deal cull count now stands at roughly 3.5% of its staff • FMR's hockey star president has stepped down • SEC chief wants more enforcers • An Envestnet executive proves joining a rival is good business • LPL now has an in-house robot.

April 29, 2023 at 1:36 AM

Charles 'Chuck Schwab' called James Gorman to protest a two-broker poach, kicking off a hydra-headed legal battle, costing Morgan Stanley millions, so far

The Schwab founder and chairman invoked Charles Schwab Corp.'s zero-tolerance policy against Wall Street -- or RIA -- poaching of talent and AUM from Schwab branches.

March 9, 2023 at 1:23 AM

Fidelity will hire 4,000 staff in first half -- a staggering number but a tapering off from 'unprecedented' rate in 2021-2022 that catapulted it to 68,000 employees

The $10.3 trillion giant explains its hiring -- in a layoff environment -- as an RIA-like goal, namely having the human bandwidth to develop 'lifetime' relationships with its 40 million investors

February 17, 2023 at 2:49 AM

RIA recap: Bernie Clark promises to 'be there' for coming TDA-Schwab system snafus; Fidelity gets custody win; Vanguard dishes out big tax bill to investors

Schwab RIA chief petitions for 'patience' for coming merger inconveniences but 'repapering' is no culprit; Carrie Pomerantz gets Schwab board seat; Addepar wins $65 billion AUM contract.

November 3, 2022 at 1:59 AM

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Brian Murphy

Brian Murphy

April 18, 2023 — 5:22 PM
Low interest yields on investment, checking and savings accounts held at banks are going to be the straw that breaks the backs of more than one institution in the not too distant future. Watch. Schwab may, or may not, come through it unscathed - but to be honest the outcome is up to the behavior of their clients, not their own actions. We, like many investment advisors, are actively moving client funds to optimize their cash harvest. This will be a growing trend that will wreak havoc among the financial institutions that have long taken advantage of their clientele. The Fed has instituted policies that have benefited the banks immensely over the past few years. Look no further than the IORB rate that allows banks to currently earn 4.9% on their excess reserves. As of April 12, 2023 the depository institution reserves held on the Fed's balance sheet was a whopping $3.35 Trillion - which implies that the Fed is paying financial institutions at a rate of about $165 Billion a year. And yet banks pay their depositors 0.45%to 0.65% annually? The IORB is a direct transfer of money from taxpayers to financial institutions - Bank of America, Wells Fargo, JPM, Schwab, etc...and it's ludicrous. Of course, select money market funds are also taking advantage of the IORB...and paying that interest back to shareholders. Expect money held in these specific money market funds to grow (and inflation to remain an ongoing concern) as long as the Fed continues this ridiculous policy. So, it's up to astute advisors to do the right thing for their clients.

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