Schwab rolling dice on keynoter Clinton

SAN FRANCISCO — Charles Schwab & Co. Inc. dropped more than 5,000 invitations in the mail late last week to financial advisers officially proclaiming that former President Bill Clinton will serve as keynote speaker at the firm’s annual adviser conference in Philadelphia in November.

Then the executives of the San Francisco-based broker held their collective breath.

The heads of Schwab Institutional are well aware that by and large, these independent advisers hold conservative political views. The Schwabies also know that the last time Mr. Clinton was slated to speak at a financial services conference, there was such an uproar from clients that his appearance was canceled.

“This is a very different time,” said Michelle Swenson, senior vice president of Schwab Institutional in San Francisco.

The choice of Mr. Clinton for Schwab’s IMPACT 2004 conference November 7-10 drew raves from several advisers.

“He’s hot; his book is hot. [Schwab is] clearly spending big bucks,” said Tom Burkhart, chief executive of The Savant Group in San Francisco, which has $550 million in assets.

“Attendance is going to boom,” said Ken Bakar, principal with AssetMark Investment Services Inc., a Pleasant Hill, Calif., firm with $5 billion under management.

“Knowing Bill is coming might help me change my mind” about attending the conference, said Robert D. Smoke, principal with Seton Smoke Capital Management in Greenbrae, Calif., which has more than $300 million in assets under management.“You can have your views of him personally, but I think he’ll provide insight, even with his biases.”

In fact, many advisers said they are more concerned about who will fill a pivotal speaking role at IMPACT that was vacated by Schwab’s departing chief executive, David S. Pottruck. They added that their political concerns are secondary regarding the conference.

These advisers see Schwab in a troubled state because its business model and leadership are in flux. They believe that the conference needs a speaker of authority to address the firm’s problems.

For the past several years, Mr. Pottruck has delivered the speech that many advisers consider the key address at Schwab’s annual conference.

He was known to level with advisers about the direction in which Schwab was headed and how the firm’s plans might compete with their business.

Advisers said they will be satisfied only if chief executive and founder Charles R. Schwab fills in for Mr. Pottruck.

“There’s no question; he’s gotta speak,” Mr. Bakar said of Mr. Sch-wab. “I would think it’s critical — kind of a state of the union.”

Ms. Swenson said she can’t promise that Schwab Institutional can deliver Mr. Schwab.

“Who will cover that topic is [to be determined]. It won’t be Dave,” she said. “Why wouldn’t Chuck be a big feature?” Mr. Burkhart asked. “I think he has to be; I’d want people to know he’s still interested, prominent and that he cares.” Mr. Burkhart said that he bases his sentiments partly on the fact that he joined a conference call last week during which Mr. Schwab told advisers that he might hold the reins as chief executive for a very long time.

Dennis Miller, president of Miller/Russell and Associates Inc. in Phoenix, said that he agreed with Mr. Burkhart.

“I think that this would be an especially appropriate time for Chuck to articulate what he views to be the future of the company,” said Mr. Miller, whose firm has $725 million in assets under management. “I don’t think advisers think the company is in trouble, but it’s a time of change, and some of that change affects us.”

Mr. Miller said advisers want to know, for instance, how committed Schwab is to keeping its branches open in light of recent closings, because they depend on them for referrals.

He added that due to the close ties he keeps with the company, he is concerned about whether Schwab can keep its name and reputation unsullied.

Ram Kolluri, president of GlobalValue Investors Inc. in Princeton, N.J., disagreed about the importance of Mr. Schwab’s speaking at the conference.

“There is a problem. The leadership needs to make a case” for why the company is headed in the right direction, said Mr. Kolluri, whose firm has $150 million in assets under management. “It doesn’t matter who speaks.”

Were Mr. Schwab to jump into the speaking fray, it would be a big departure from his past practices. He has generally chosen to utter a series of platitudes about how important advisers are as partners of Schwab, then hustle off the stage, advisers said.

“He [typically] says about nothing” at IMPACT, said Ken Schapiro, president of Condor Capital Management in Martinsville, N.J. The firm has just under $500 million in assets under management.

“Chuck is a figurehead; he doesn’t have his finger on the pulse of the business,” Mr. Bakar added. “He’s not the most articulate speak-er in the world, but I think it’s im-portant that he speaks.”

The last time Mr. Clinton was slated to speak at a financial services conference — in February 2001 at New York-based Morgan Stanley’s Global Leveraged Finance Conference in Boca Raton, Fla. — Morgan Stanley pulled the plug on his appearance because clients complained. Mr. Clinton had recently pardoned financier Marc Rich, and there were revelations that the former president received gifts from the billionaire fugitive’s ex-wife.

Morgan Stanley chairman Philip J. Purcell fired the person who decided to book Mr. Clinton in 2001.

Ms. Swenson said that the choice of Mr. Clinton this year was made primarily by her and her boss, Deborah D. McWhinney, president of services for investment managers at Schwab Institutional. She said they didn’t seek approval from Schwab’s board.

Advisers see the choice this time around as interesting in a presidential election year because Mr. Schwab himself is conservative, which is reflected by the presence on the company’s board of George P. Shultz, who served as President Reagan‘s secretary of state.

Mr. Schwab has also traditionally served up a steady diet of Republican politicos at IMPACT conferences.

Last year, former New York Mayor Rudolph W. Giuliani served as the keynote speaker in San Francisco.

Meanwhile, Mr. Schwab has also rubbed elbows with President Bush and was rumored to be on the short list for Treasury secretary last year.

“We didn’t go after Clinton because he’s a leading Democrat” but because he is a compelling speaker, Ms. Swenson said.

=== Just like MSDW!

Probably a stupid question but ... what's MSDW?

(Has nothing to do with the Bob Dole Foundation and their asking Clinton to give one of their first paid addresses, does it?)

The question is who came up with the idea and made it clear that they wanted slick willie, or else??????????

If I worked for Schwab, I'd move jobs. If I had an account with them, I'd find a new broker.

Schwab's ultimate responsibility is to its stockholders. If they don't complain about Clinton, then oh well.

On the other hand, I would much rather have Clinton talking at a Schwab banquet than at a 'Rat rally or fundraiser. For whatever the reason, the 'rats still love BJ and the less he does to rally support for the riverboat spy-boy the better.

MSDW = Morgan Stanley-Dean Witter financial firm.

From the article:

"The last time Mr. Clinton was slated to speak at a financial services conference — in February 2001 at New York-based Morgan Stanley’s Global Leveraged Finance Conference in Boca Raton, Fla. — Morgan Stanley pulled the plug on his appearance because clients complained. Mr. Clinton had recently pardoned financier Marc Rich, and there were revelations that the former president received gifts from the billionaire fugitive’s ex-wife.

Morgan Stanley chairman Philip J. Purcell fired the person who decided to book Mr. Clinton in 2001."

I sent Schwab an email notifying them my account will be moved. Several days ago and no answer from Schwab. I assume they don't give a hoot what the customers think.

The www.impact.schwab.com conference is set for November 7-10. Bill Clinton's heart bypass surgery is next week, and that usually involves 6 week recovery period. I suppose he'll be healthy enough to speak by then but will he? Or will he use this as an excuse so Schwab can save face? One thing for sure is the Clintons will exploit this any way they can.

I also contacted Schwab. They ignored me. I'm transferring my investment holdings elsewhere.

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