Pottruck Takes Over As Schwab's Retail Head, Firm Prepares to Launch Campaign to Snag High Net Worth Clients
Steven Scheid, the head of the retail at Charles Schwab, wanted more autonomy in leading the firm’s investing division. But he couldn’t get it, so he resigned this week, leaving CEO David Pottruck to run the division on an interim base for approximately 30 days, the firm says.
"We had different views about the level of autonomy," Pottruck told firm employees in an interoffice email this week, according to brokers in Schwab’s retail division.
Meanwhile, wanting to compete for high net worth clients with firms like Merrill Lynch and Salomon Smith Barney, Schwab is preparing to launch a campaign to reel in a new class of wealthy investors to its private client business, according to a West Coast rep. Scheid wanted to control Schwab's direction, the daily decisions and the implementation of the new high net worth strategy, according to the rep, yet Pottruck and Chairman and co-Chief Executive Officer Charles Schwab wanted to be actively involved—more than Scheid wanted them to be.
“Both Chuck and Dave feel it's very important that they be very hands-on and involved in that process," Schwab spokesperson Greg Gable says. "It coincided with a time in [Scheid's] career where he's looking for more autonomy and independence."
Schwab is struggling through a drop in individual investing, the firm's core business. “So we’re trying to diversify, especially in the private client business,” says a Schwab rep.
The firm plans to offer clients more advice and hands-on account management in exchange for higher fees, according to Gable.
"Our strategic plan and priorities are in place and everybody is focused on execution,” Pottruck says. “The best way we can keep our momentum building is to appoint a new head of retail who is already knowledgeable about our organization and our clients' needs."
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