Charles Schwab Exec Talks Growth, AI and Living Longer

Charles Schwab's Bernie Clark, executive vice president of Schwab Advisor Services, is optimistic about the prospects for registered investment advisors (RIAs) – and not just because he expects strong growth in the years to come. The executive sees emerging opportunities ahead, including "tectonic shifts in our culture" and a steady move to a digital economy.

In the post published to Clark's LinkedIn account,  the executive wrote that, since 2012, The Charles Schwab Corporation (SCHW​) has seen a 65% increase in its clients' assets under management, with the number of RIA firms registered with the Securities and Exchange Commission increasing 75% in the past five years. Those figures are setting the stage for more growth, thanks to affluent consumers' expectations for transparency and a desire for a fiduciary standard experience. There has also been an acceleration of brokers going it alone.

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But it's not only the increase in independent RIAs and calls for increased hand-holding that will present more opportunities for financial advisors, wrote Clark, pointing to a culture shift and more embracing of technology. "Change is widespread, but also deeply personal. Understanding where macro changes intersect with clients' lives offers advisors an opportunity to assume a broader role in helping investors navigate big decisions in their lives," he wrote in the post.

Take healthcare for starters. Clark said that, as people live longer, it is going to mean significant changes in retirement planning, particularly in the advanced years. After all, if we are living longer, investors are going to need more money and will likely face more healthcare expenses. All of that requires the help of financial advisors who take on the added role of including healthcare planning in their portfolio of services. "Across every decade, life expectancy has increased by two or three years, and that means significant changes in retirement planning for life in advanced years," said the Schwab executive.

On the digital economy front, Clark wrote that the movement to automation and artificial intelligence will change the way many professionals work. Clark noted data from Forrester, the market research firm, which shows that 25 million people will lose their jobs to robots over the next decade. That, noted the Schwab executive, is three times more jobs gone than those that were lost in the wake of the financial crisis.

However, this does not have to be a bad thing for financial advisors – nor should it be something they run away from. "For financial advisors, the implication of these and many other developments in our world are clear: helping clients determine when to create change in their lives, when to adapt to it, and when to sit tight will be an increasingly important part of their roles," Clark wrote. "Many RIAs are doubling-down in new areas of expertise and bringing people from outside the field of finance onto their teams."