The Year to Raise Your Hand

March 2017

Have you ever heard - or maybe even told - a story like this before? It goes something like: early on in my career I was passed up for a promotion I felt I deserved but hadn’t communicated to my boss that I wanted.

Like many others, that story is one of mine. And while it was a tough lesson at the time, I believe it helped pave the path for my career. I learned that raising my hand would not only open new doors – and with it new opportunities – but it would also help initiate new conversations and build new relationships along the way. Well into the first quarter of 2017, I’ve made it a goal to continue raising my hand more and share my thoughts more – with employees, clients and the broader investment management community.

Having spent 30 years in financial services, I’ve seen a lot of change, but none like what we’re seeing now in investment management. There are three key trends driving fundamental change in our industry. It is the kind of change that comes with significant and permanent implications for those of us who serve investors.

1. A demand for greater simplicity
2. Shift to lower cost products
3. A growing need for advice

We are witnessing one of the most significant investor-driven revolutions since the advent of mutual fund supermarkets, or even discount brokerages.

Investors are demanding lower investing fees and more predictable investing outcomes. They don’t want to pay an arm and a leg for advice, and they want to manage their financial lives simply, through whatever means is easiest for them – whether that be via their phone, a desktop computer or through a conversation with a professional. This has spurned on the growth of registered investment advisors to a range of low-cost solutions including robo advisors to fill this need.

Increasingly, many people just don’t have the time, or perhaps the passion to create, monitor and rebalance their own portfolios. Think about how supermarkets have evolved … from selling ingredients customers need to make dinner, to offering already prepared food they can heat and serve. Investors are looking for the same thing, so to speak.

Lower costs, more convenience and someone they can trust by their side – that’s what investors are looking for. And they deserve it all.

These trends are poised to change the shape of asset management over the next decade. Those demands will require much of our industry to evolve, and certainly will put a premium on scale, particularly when it comes to meeting the demand for lower fees. But most of all, it will require courage – the courage to change in response to what we see through our clients’ eyes, even if it means disruption to our own business models. To do otherwise may preserve gains in the short-run, but runs the risk of navigating in the opposite direction of where investors are going – and that is not a recipe for long-term success.

Anyone who knows me will vouch that these trends are front and center for my colleagues and I at Schwab. Going forward, I’ll continue to use this space to share my thoughts on what we see as a transformative moment in time for financial services. I also invite you to follow me on LinkedIn where we can continue the dialogue.


Marie Chandoha
President and CEO, Charles Schwab Investment Management

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