For the past few months, I’ve spent time visiting our branch locations in markets around the country. The conversations I’ve had with our branch teams who are on the front lines every day have covered a wide range of topics, but they are all centered on one thing: our clients. At Schwab, we have a pretty simple strategy that guides us – we build our business through the eyes of our clients. And that starts with understanding their situation, needs and goals.

Few people would dispute that it is a challenging time to be an investor. In our ongoing commitment to take a listen-first approach to working with clients, I thought I’d take some time to share what we’ve heard.

The good news is that we are seeing signs of renewed confidence. In a survey of clients we conducted in March*, 45 percent told us they feel “better off” financially than they did a year ago, up 19 percentage points from the end of 2011. Forty-two percent told us that they feel “extremely” or “very confident” making investment decisions. This is the highest level of confidence we’ve seen since Q1 2008.

These are positive signs, but investors are certainly dealing with a number of “unknowns” that could have a large impact, including the outcome of the presidential election and future tax policy uncertainty.

But more specifically, investors are focused on three very timely topics right now: risk management, saving and investing in an extended period of very low interest rates, and the importance of having a holistic financial plan.

First, given the market volatility of past few years it is no surprise that people are concerned about the level of risk in their investment portfolios. It is one thing when the market is consistently going up, but it’s when the market becomes choppier that we truly come to know the level of risk we are comfortable taking. The risk management conversations we are having with clients tend to focus on three things: continued uncertainty in Europe and what that might mean both economically here in the U.S. and for individual portfolios, finding the right balance of portfolio risk versus yield, and protection strategies for clients who are nearing or in retirement.

Second, clients are very focused on the right investment approach given the continued low rate environment, especially when it comes to fixed income. We’ve been pretty open at Schwab that we believe such an extended period of low interest rates has an enormously negative impact on investor confidence at the macro level. But we see this dynamic playing out every day in the individual interactions we have with clients. Many are concerned about the risks of holding bonds if and when rates do finally go up. Others are trying to find ways to create yield in the current environment primarily through dividends or taking on more credit risk when it makes sense. This is a particularly challenging time for clients thinking about retirement or those already in retirement who are looking for ways to adjust their overall investment strategy given reduced cash flow from their portfolios.

And finally, investors are much more focused on having a long-term, overall financial plan that fits their specific situation and goals. It’s no longer about hitting a homerun with one or two investments. This is likely a result of a very difficult period of time for investors, leading to more people questioning whether they are doing the right thing with their money. More clients are asking us to help them create a plan that will keep them on track. We are seeing a significant uptick in the number of clients who want to understand their holistic investing strategy and the factors impacting the market.

Given all these important questions and concerns facing investors, it’s no surprise that the conversations we’ve had with clients lately have been longer and more in-depth than ever before. In fact, in 2011 we had nearly 500,000 face-to face interactions with clients and helped more than 12,000 clients with financial plans tailored to their needs. And we’ll remain committed to growing our business and developing products and services with one goal in mind – seeing the world through clients’ eyes.

 

*The Schwab Survey of Investor Confidence was conducted in March 2012 and aggregates the views of more than 1,000 retail clients.

The Charles Schwab Corporation (“Schwab”) provides a full range of securities brokerage, money management, and financial advisory services through its operating subsidiaries. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (“Schwab”), Member SIPC, offers investment services and products.

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