Charles Schwab will renew branch-building in retiree spots like Florida, relocate storefronts to 'high-traffic' areas, and dedicate staff to $10-million-plus accounts, new Schwab CEO says ahead of Tuesday earnings

Rick Wurster is the new blood at Charles Schwab Corp., but he's signaling that Schwab may focus more on the oldest and richest investors in the new year – never mind Robinhood.

Wurster made clear Schwab would not follow online brokerage Robinhood's strategy, even though the rival's stock is currently one of the hottest in the financial services industry. 

Instead, the new CEO is more certain that Schwab can grow safely and effectively using its old playbook, serving Baby Boomers by “adding dedicated staffers responsible for customers with more than $10 million in assets.

“We are sitting down helping the grandmother,” the Schwab president and CEO told Bloomberg in his first interview since taking Schwab's reins on Jan. 1. 

RIAs were not mentioned in the article.

Judicious growth

Going forward in the new year, the company will focus on building and relocating branches to add to its 400 existing offices, Wurster said. See: Charles Schwab shutters 79% of TD Ameritrade branches – but 140 will cohabitate with a next-door Schwab branch -- and refers legacy TDA assets to legacy TD RIA custody clients 

Schwab, for years, has been consolidating both the overall number of branches and TD Ameritrade branches near Schwab offices. 

But 12-plus new branches will be located strategically in “high-traffic” areas “in places like Florida,” according to the Bloomberg article. No number was specified with regard to locations.

Adding branches judiciously is a legitimate strategy in a digital bank and brokerage world, according to former banking consultant Jonathan Holtaway.

“In the aggregate, there are too many bank branches in most markets nationwide, [but] de novo branching is still required for individual banks to reach new customers," Holtaway said via email. 

"If a suitable amount of customers and business can be attracted, then the cost of branching can still make sense,” added the president and manager of private equity shop Ategra Capital Management in Vienna, Va.

Swatting a fly

Much of Robinhood's strategy centers on attracting youthful, non-affluent investors with a trading mindset and an appetite for trading and owning cryptocurrency.

But Wurster noted that Robinhood's $200 billion in assets under management is just two percent of Schwab's scale. See: TradePMR sale to Robinhood sends ripples through the RIA industry.

“We bring that in, in a few months,” the CEO said. 

In fact, Schwab can grow two percent in a few hours if the market surges, though Wurster was apparently referencing net new assets.

Crypto opportunities

Schwab shares (SCHW) closed today (Jan. 17) at $76.41, up 1.19% and near the high end of its 52-week range. Schwab's stock is up about 21% from its 52-week low of $61.01.

But among brokerage companies, Robinhood's shares (Hood) have been the star of the past 12 months. It closed today at $48.15, up 4.49% on the day and 267% from its 52-week low of $10.16. 

Morgan Stanley Research drove much of today's gains after it named the stock its top pick, citing multiple growth opportunities ahead. 

Analyst Michael Cyprys pointed to Robinhood's potential expansion in the crypto space, saying the incoming Trump administration could drive deregulation that benefits the retail trading platform.

Wurster said Schwab may sell Bitcoin “in short order” but also said the decision relies more on actions by the Securities and Exchange Commission (SEC) rather than Schwab. See: Incoming Charles Schwab CEO toes edge, telling RIAs he will greenlight spot coin trades, maybe 'in short order' under Trump, but conservative firms still must have 'risk appetite,' SEC attorney cautions

Schwab is set to announce earnings on Tuesday, (Jan. 21) and Wurster will head his first webcast with Wall Street analysts as CEO.