By Jed Horowitz
NEW YORK (Reuters) - Charles Schwab Corp is searching for a new chief financial officer to replace Joe Martinetto, who will switch to a different role later this year, Chief Executive Officer Walt Bettinger said Thursday.
Martinetto is likely to perform functions similar to a chief administrative officer but will not assume that title, Bettinger said during the brokerage firm's midwinter business update for investors. Martinetto's title will probably change to senior vice president from executive vice president, he said.
Separately, Schwab is weeks away from introducing its Intelligent Portfolios product, an automated exchange-traded fund investment program that is generically known as a robo-broker.
Schwab is not charging advisory or service fees for the program and will not "stuff" it with its own ETFs unless they meet rigid performance and pricing requirements, Bettinger said. Only one of almost 200 funds on its ETF OneSource platform currently makes the grade, he said, based on its ability to reduce investors' taxes rather than on its performance.
Schwab plans to make money primarily from investing client cash residing in the robo-platform. It expects to benefit from spreads between what it pays clients on that cash and what it gets from investing the cash.
The robo program is aimed at investors from ages 25 to 55, who make about $100,000 annually and have fewer than $500,000 in investable assets, said Terri Kallsen, the new head of Schwab's "investor services" division for direct retail investors.
About 46 percent of some 20,000 people that have signed up for the new program even before it has been actively marketed are new Schwab clients, Kallsen said.
Schwab will make other "aggressive" moves to cope with a "very difficult" interest-rate environment, Bettinger said, and is likely to open more branches and hire more brokers.
He also said Schwab is ready to cut commissions if competitors do so.
(Reporting by Jed Horowitz; Editing by Lisa Von Ahn)
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