UPDATE: Hassan, the Brain Behind Schwab’s Robo, to Join Morgan Stanley
Naureen Hassan, the executive most symbolic of Charles Schwab & Co.’s highly publicized robo-advisor, has resigned to take a position at Morgan Stanley.
Hassan, an alumna of consulting firm McKinsey & Co., joined Schwab’s strategy group in 2003 and is leaving with a bang. Less than a year after the discount brokerage pioneer launched its Intelligent Portfolios automated investment management tool for the general public and for its own registered investment adviser clients, the service has amassed more than $5 billion in assets, outpacing independent robo models in business for years.
“Naureen Hassan has decided to leave Schwab to pursue an opportunity with an outside investment firm, effective immediately,” said a memo dated Monday, which was read to AdvisorHub by a Schwab employee.
The memo did not identify the firm and Hassan did not immediately respond to a message seeking comment, but an assistant confirmed that she had moved to Morgan Stanley although she had not officially started at the New York-based brokerage giant.
A Schwab spokesman confirmed the departure but declined to comment further. A spokesman for Morgan Stanley declined to comment.
Former Morgan Stanley Wealth Management head Greg Fleming said last fall that the brokerage giant is planning a robo-type offering to attract a new cadre of emerging affluent investors, millennials and children of current clients. Sara Furber, who had overseen digital platform development at Morgan Stanley, resigned last week.
The memo was signed by Terri Kallsen, the head of Schwab’s branch and direct-to-consumer channel, and by Bernie Clark, who leads Schwab’s RIA custody unit. It said Hassan’s duties will be assumed by Neesha Hathi, senior vice president of technology in Schwab’s RIA custody unit. Hassan was executive vice president for strategy and platforms in the Investor Services business run by Kallsen.
Hassan has a high profile in the world of wealth management platform providers. After Schwab galloped out of the gate with plans for its “free” robo offering in early 2015, industry publication RIABiz wrote: “Naureen Hassan deserves an immediate raise for the work she must have done in creating Schwab Intelligent Portfolios out of so many bits and pieces of her corporation as to boggle the mind — and then explain it all to the SEC.”
The product demanded a leader with not only strong technical and strategic skills, but also with political acumen. The do-it-yourself portfolio management structure had the potential to antagonize leaders of both Schwab’s Investor Services division by disintermediating branch customers and of its RIAs who work with wealthy investors whose needs can’t be met by branch employees.
The New York Times last Friday plastered a photo of Hassan over a personal finance article about the variations of robo-advisors available to investors. In the piece, she touted a new assessment tool that lets Schwab robo-users track their progress in meeting financial goals rather than pure investment performance. That’s an approach that transcends discussion about returns and that every wirehouse and big regional firm has been pushing their brokers to use in their sales pitches.
Hassan’s departure follows recent moves out by several other Schwab executives. Kelli Keough, an executive in the firm’s trading services unit, left in November to run digital development at JPMorgan Chase & Co.’s private bank, according to LinkedIn.
Mary Stork, who arrived at Schwab in July 2014 to run strategy and “client experience” offerings for affluent customers with more than $500,000, left after a year to return to her former company as president of financial planning and advice at USAA, the giant credit union and financial services provider.
She was replaced by Heather Lord, senior vice president of strategy and client experience, who gave notice around a month ago, according to a source. Lord, who is remaining at the company to ease her successor’s transition, declined to comment.