How Schwab Evolved After Listening to 2.5 Million RIA Phone Calls

The custodian is doing away with its “generalist” service model.

(Aaron M. Sprecher/Bloomberg)

(Aaron M. Sprecher/Bloomberg)

More than 7,500 RIAs custody client assets with Charles Schwab and last year they called the company three million times.

Schwab Advisor Services’ hotline is no automated phone tree, either. Financial advisors and their staff dial the custodian, state what they need help with, and are then transferred to one of its 600 support staff. It doesn’t take long to get in touch with a human being. But after that, things weren’t going as smoothly as RIAs, or Schwab, would have liked.

Most of Schwab’s dedicated support staff are relatively seasoned, considering the inbound calls. The average tenure is 6.5 years and nearly half (45%) of all call volume is related to routine tasks such as transferring client money, status inquiries on various requests, help with third-party technology, and assistance navigating Schwab’s website. After their training, the service professionals should be “masters” at addressing those needs, Jalina Kerr, a senior vice president of Client Experience at Schwab Advisor Services, told RIA Intel.

But more complex questions and issues sometimes require a more experienced support person and getting one on the phone could feel like a game of chance. About 25% of calls are “mid-level complexity” and might require a more senior employee, according to Kerr. Another 30% are even more complicated and often handled by “senior enhanced specialists.”

Last year, if an advisor called about managed accounts or something trust services-related, they might be connected with someone who could help, or not, and then speak to yet more representatives before finally having their questions answered. This process could prove annoying for all involved and dent confidence. One in about every five calls needed to be placed on hold last year, Kerr said.

Schwab thinks it has solved that for good.

On Tuesday, the custodian revealed to RIAs that it partnered with a third-party artificial intelligence company to help it analyze 2.5 million of the phone conversations last year with RIAs. The work painted a clearer picture of what RIAs were calling about, how often, and what Schwab could do to improve its service. The service, which Schwab declined to name, can also analyze emotions in interactions, giving insight into what RIAs are really frustrated about.

After 18 months of research and teaching the new system more than 800,000 phrases, RIAs should be able to state their question or need and expect to be connected to a person who can help them.

“We were operating for many years in a generalist model,” Kerr said. “It actually showed us that the needs of advisors are certainly getting more complex.”

The changes aren’t just going to save RIAs some headaches, they are going to save Schwab Advisor Service a lot of time—roughly 9% of all call volume in 2019 involved RIAs calling back with a question they already reached out about. If the new system can connect them with the right specialist in the first place, that volume could be cut by as much as half, saving everyone thousands of calls, Kerr said.

In turn, the support staff interested in growing their skillset and furthering their own careers will have more time to train and build their expertise. There are no plans to make any changes to the number of service employees, Kerr said.

The service will continue to learn, improve, and deliver new insights about calls. It should be a meaningful improvement in service, but the bar is much higher now, too.

“I think that’s a really important point to make. The expectations of the advisors have certainly increased because of the digitization trend that we’ve seen,” Kerr said.

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