Insights from
Jonathan de St. Paer

President

New CEO, consistent strategy

April 2019

This morning, I began my day like any other Monday. I woke up before my family, drank my first coffee while quickly checking email, then hit the gym before heading to the office. While my routine was the same as usual, it's anything but an ordinary Monday for me. Today, I become chief executive officer of Charles Schwab Investment Management (CSIM) and step into my biggest role yet.

Over the past six months, Marie Chandoha and I have worked together to navigate a smooth, deliberate transition. I've been gradually delegating my old responsibilities to other leaders while taking on new ones. I'm grateful to have had the time to execute this transition, and excited to take the reins of CSIM at a time when the firm is in a position of strength and has so much momentum.

I've found it fascinating that the question I was most commonly asked during this transition was: "What changes are you going to make?" I recognize that it can be tempting for new leaders to quickly make one's mark on a firm by making immediate changes. However, I find it to be more valuable to focus on two different questions: 1. How will we maintain our investor focus and collaborative culture that have been key to CSIM's success? And 2. How will we evolve to successfully navigate the changing world around us?

To address the first question, CSIM's investor focus and collaborative culture are engrained in our DNA. These characteristics are embedded in our clear strategy, strong values and talented team, so I'm confident they will endure and continue to be critical to our success.

With that said, the environment in which we operate is dynamic. We know that the next decade will look very different from the last. For example, moving forward, the market will not look like the decade-long bull market we've had. We should expect, and be prepared for, more volatility. Additionally, competition will continue to increase as prices go lower and other factors—like service and education—grow in importance. And, of course, technology will continue to revolutionize how we work and how we interact with our investors.

While we will evolve and grow in order to continue challenging ourselves and our industry on behalf of investors, it won't come at the expense of our core strategy. As I take on the responsibility of CEO today, I'll work to ensure CSIM remains focused on three things that are fundamental to our DNA:

  • Simplicity — We don't try to be all things to all people. Rather, we focus on serving investors' biggest needs by providing a limited number of products that appeal to a broad cross-section of people. Our products are straightforward by design, and meant to build the core of investment portfolios at some of the lowest costs in the industry.

  • Scale — Our focus on providing a limited number of products that serve investors' biggest needs means our products are designed to scale well. This, combined with our focus on efficiency, help us to pass the benefits of low costs directly on to investors.

  • Service — We believe investors deserve better than being forced to make trade-offs between cost, quality and service. That's why we're committed to delivering on all three.

Concentrating on these three pillars will allow our firm to stay focused and keep things simple. We will take advantage of opportunities to improve our ability to deliver on these pillars as needed, and avoid change for the sake of change. I'm confident that this will position CSIM for continued growth and success in an evolving environment.


Jonathan de St. Paer
President, Charles Schwab Investment Management

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