Yahoo Finance

Joining us now, we've got Rick Wurster, Charles Schwab president and CEO, and Yahoo Finance's executive editor Brian Sozzi is still with us, bringing us the conversation. Rick, thank you for making time for us. We really appreciate you coming in.

Thanks so much for having me on. It's my pleasure.

So, I know that you have seen a lot of activity from the brokerage and that that activity has increased this year, but talk to me about what you're seeing in terms of investor positioning amid the market volatility.

Well, I think investors are doing, taking a range of activity based on what their financial plan is, what they're trying to accomplish. In general, we see a range of emotions among our clients, from nervousness to a focus on the long term. If we look specifically at what our clients are doing, we look at things like margin activity as a good pulse for what our more active traders are doing. And our margin, uh, our level of margin has stayed roughly the same over the last month and our margin clients have actually bought equities in the last week. So I think clients are generally hanging in there at the moment. And the benefit of being a part of Charles Schwab is we have the opportunity to talk with them and help them understand where they are with their plan, what they're trying to accomplish.

What are some of their biggest concerns at this moment?

I think there's a variety of concerns. I think you've seen the market turn or worry about growth. You see it in bond yields, you see it in breakevens, you see it in the sectors that are outperforming. So, when you look at investors broadly, I think the biggest concern on their mind is just softer growth picture. And I think that's that's part of what's weighing on, uh, weighing on investors.

You just took over, did you pass the 100 day mark? You just took over as CEO?

I don't think I'm at 100 days yet. I still have a little ways to go. Is it, is it hard to, there's obviously CEO, is it hard to plan your business in this environment where one moment we have tariffs, next moment we don't, then they're back on, then they're back off, and then something else is coming like how what does this mean for your job?

It's not hard at all to plan our business because we focus on the long run. We focus on our clients' outcomes and making sure we can get them to where they need to be in their financial life. We've been in business for 50 years and for 50 years we have relentlessly stood by our clients and helped them get to where they need to be. And over that time, we've seen up markets, we've seen down markets, we've seen good economic times and bad economic times, but through it all we stand there with the client and work with them in a variety of ways. And that's what we're doing today and this year I I call a liftoff year for us because we're coming out of the integration we did with Ameritrade and it's all all systems go for us and we're growing faster than we were last year and off to a really strong start.

Have you stemmed that, uh, I guess you know last time we, we talked to you you know those customers were little upset on that integration process with, with Ameritrade, has that stopped, you keeping customers on the platform now that that's over and done with?

Our Ameritrade clients are as happy with us as they've ever been. Every quarter that goes by their satisfaction scores go up. The net flows that they're bringing us in terms of new money that they're bringing us keep rising every month. So we're in a really good, a really good path with our legacy Ameritrade clients and we're so delighted to be able to serve them and I was in five branches yesterday in North Carolina and what I keep hearing from those clients and our professionals that serve them is how much they value the breadth of what we can bring to the former Ameritrade client. We still have the same Thinkorswim platform that we think is the best platform in the industry. And hopefully the last place you buy a stock is through and, uh, but in addition to that at Schwab, they get access to all of our wealth management capabilities, all of our research, uh, a lot more capabilities to help them get to where they need to be in their life.

It sounds like a pretty picture given the uncertainty that is obviously taking place in the market, but also so many CEOs have talked with us about just in terms of the policy backdrop. I know that you have spoken with, worked with the president specifically on the launch of their DJT's Fintech brand Truth5. Have you had any conversations with him about getting policy clarity from the White House moving forward?

You know, we we for 50 years have tried to work with administrators, with with regulators to help them get to a place that's the best possible environment for retail investors and advisors that serve them. So we're always in active discussions with with regulators and politicians and that, that won't change.

We've gotten a big, uh, you know I was actually talking to one of your competitors this morning on my, on my podcast. I asked them their view on cryptocurrency and that particular CEO said we we don't view it as an asset and they may not be getting bigger into the crypto space. What does your crypto operations look like? I mean, we've got ETFs. We've clearly passed a moment with the Bitcoin reserve, it's been validated. How are you going to play in that space?

Well, we're we're active in the cryptocurrencies space today. We had a 400% increase in the number of visits to our cryptocurrency site in the fourth quarter of 2024, and 70% of those visits were from prospects. So what that says to us is that investors that are interested in investing in crypto, they want to do it a place that they trust, a place where they feel like their assets are going to be safe. So they're coming to Schwab and they're investing in ETFs and getting access. At some point we'll be in spot cryptocurrencies and we'll make that available. Today we're not, we have ETFs and that's where we're seeing the most of the volume, but we, we are in cryptocurrencies and, and our clients are interested in it.

Is the spot Bitcoin ETF, is that, is that a this year thing for your company?

We hope it to be a, a this year thing. The regulatory environment has shifted as it relates to banks being able to offer offer crypto directly to clients and, and because of the changing regulations, we do think it's possible that this year we would be able to offer that directly to clients.

And more broadly, where do you see the most growth moving forward? Obviously you've got the Sozzis of the world getting ready to get into the brokerage, you know, at two years old, but beyond those initial, those initial investments, right? Where, right of course. Where where is the most growth going to come from the business moving forward? First time investors, retail, futures traders, options traders, crypto bros, like who is the growth for?

What are you implying to me for crypto bro? I saw that. Well, we, we do like to start young by the way. We are winning with young clients. We had roughly a third of our client, new clients last year were under the age of 30, 60% were under the age of 40, which still seems young to me. Uh, so we are doing well with young investors, but we're really winning across the board. And the reason we're winning at all age levels, at all wealth levels is because we put the client first. We bring everything that we have, whether it's our trading platform, our wealth management capabilities, the way we support our 16,000 advisors that are on our platform and in communities across our country, the way we serve all of them puts them first. And, and when you put clients first, I think you're going to have a successful business and that's been the case for us for 50 years.

Rick, I've gotten to know, um, Vlad and, and the Robinhood team really well. And you know, over the past two years I've, they just seem increasingly aggressive to get into wealth management, launching new products, their pace is picked up. Are they a nuisance to you? Are they a real competitor to what Charles Schwab has done the past 50 years?

We, we, we don't, we don't see it that way. We're, we're focused on our clients. We've had 44 million client accounts today that, that have never been more satisfied than they are today with Schwab. We're focused on delivering wealth management capabilities to them and, and we don't see those clients interested in, in other, what others can do. And, and the reason we see that is because we can do so much for our clients. Clients can call us the last week been a volatile week. We had 600,000 clients call or chat us in the last week and we pick up the phone in less than 30 seconds. We have humans picking up the phone. I was in five branches yesterday in North Carolina. We've got all kinds of clients walking in the door. It's hard for most companies to be able to match the breadth of what we can do for our clients. So we worry less about competitors. I'm, I'm sure they're doing a great job for their clients. We're more focused on our clients and making sure we nail it for them every single day.

What's the single biggest obstacle you want to tackle in your next 100 days?

Next 100 days, I, you know, it's about growing, accelerating the growth of our business, deepening the relationships we have with clients, nailing the basics every day when we pick up the phones quickly, when we help remind clients why they're invested. Those basics, when our technology works incredibly well, those matter a lot to clients, uh, and then scaling our business. The more efficient we can be with our clients' time, the more they're going to enjoy their experience. And also the more efficient we can be, so that we can free up money to invest in our growth initiatives. So those are the things we're focused on the next 100 days and maybe we'll get a little more peaceful markets in the next 100 days. We can hope for.

We can hope for that, yeah. You'll have to come back and talk to us when markets and markets do finally recover. Rick, thank you so much for making time. Really appreciate it. Brian Sozzi, thank you for bringing us the conversation. Really appreciate it.