Insights from Marie Chandoha
President and CEO
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.
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Marie Chandoha is President and Chief Executive Officer of Charles Schwab Investment Management, Inc. (CSIM), a subsidiary of The Charles Schwab Corporation. Chandoha is an Executive Vice President of Schwab and serves on the corporation’s Executive Council. With more than $300 billion under management, CSIM is one of the nation’s largest asset management companies, the third largest provider of index mutual funds and the fifth largest provider of ETFs.* Since assuming leadership of CSIM in 2010, Chandoha has achieved record growth by developing a cultural commitment to providing investors with quality funds at a great value, managing them with integrity and examining risk from multiple angles. A passionate advocate for the interests of investors and the advancement of women in financial professions, Chandoha is considered one of the most accomplished and respected female executives in the industry. She has been named one of the top women in asset management by Money Management Executive and one of the most powerful women in finance by American Banker.
*Charles Schwab Investment Management managed approximately $289.4 billion on a discretionary basis and approximately $12.7 billion on a non-discretionary basis. Source: Assets under management from Charles Schwab Investment Management, Inc.
The views expressed are those of Marie Chandoha and are subject to change without notice based on economic, market, and other conditions. They are not intended to serve as investment advice, a recommendation, offer, or solicitation to buy or sell any securities, or recommendation regarding specific investment strategies. Information and data provided have been obtained from sources deemed reliable, but are not guaranteed. Charles Schwab Investment Management makes no representation about the accuracy of the information contained herein, or its appropriateness for any given situation.
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