(Zacks) - After contributing to massive growth of the brokerage firm in the last 16 years, Charles Schwab’s SCHW CEO, Walt Bettinger, is ready to step down from his role. Bettinger said that he will retire from his role as the CEO by 2024-end and will be replaced by Schwab’s president Rick Wurster, who will assume the role of CEO effective Jan. 1.
Bettinger mentioned, “Serving the clients, employees and stockholders of Schwab as CEO for the past 16 years has been the honor and privilege of my more than 40-year business career.”
Schwab revealed in a statement, “Walt’s successful tenure as CEO saw the most significant growth in the company’s history in terms of clients, assets, revenue, profits, and market capitalization.”
Bettinger will continue to serve as the executive co-chairman of the board along with SCHW’s founder, Charles R. Schwab.
Charles R. Schwab stated, “Rick Wurster is ideally prepared to assume the duties as our next CEO and possesses all the attributes to be a successful CEO.”
Bettinger’s Successful Contribution to Schwab’s Growth
During Bettinger’s tenure, Schwab has grown tremendously. The firm’s client assets grew from $1.14 trillion to $9.74 trillion. Brokerage, banking and workplace participant accounts grew from 9.3 million to 43.2 million.
Also, the brokerage firm’s market capitalization increased to $119 billion from $18 billion at the end of 2008.
Under Bettinger, SCHW joined its rivals in offering zero-commission trading for stocks, options and exchange-traded funds as part of an industry-wide move to lower the cost of entry for customers.
Of all Bettinger’s contributions to Schwab, the most notable one has been overseeing the acquisition of rival TD Ameritrade in 2020, which led to the creation of a behemoth in the online brokerage space.
The acquisition boosted Schwab’s brokerage platform and custody unit for registered investment advisors (RIAs). Also, it bolstered Schwab’s dominant position in the RIA custody marketplace.
Other than TD Ameritrade (one of the most lucrative deal), Schwab closed the opportunistic acquisitions of Motif’s technology and intellectual property assets and Naples, FL-based Wasmer, Schroeder & Company, LLC. These, along with several others, are expected to continue supporting SCHW’s financials.
However, last year was the most challenging for Bettinger as Schwab had to struggle during the regional banking crisis that resulted in several sizable bank failures. After the failure of Silicon Valley Bank in March 2023, investors scrutinized several institutions that showed any sign of weakness, including Schwab. However, Bettinger was successful in steering SCHW through the crisis without much impact on the firm’s financials.
Moreover, under Bettinger’s leadership, Schwab has been taking steps to move away from traditional banking this year.
As the company deals with low-yielding assets on its balance sheet, it plans to shrink itself to sustain profits and rely more on off-balance sheet arrangements to house deposits.
Schwab’s Price Performance & Zacks Rank
Over the past six months, SCHW shares have lost 10.5% against the industry’s 8.4% rally.
Currently, Schwab carries a Zacks Rank #3 (Hold).
Better-Ranked Finance Stocks
A couple of better-ranked finance stocks are ConnectOne Bancorp, Inc. CNOB and Northeast Community Bancorp, Inc. NECB, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Estimates for CNOB’s current-year earnings have been unchanged in the past 60 days. The company’s shares have rallied 28.5% over the past six months.
Estimates for NECB’s current-year earnings have been revised 22.8% upward in the past 60 days. The company’s shares have soared 60.6% over the past six months.
By Zacks Equity Research
