By Niket Nishant
(Reuters) -Charles Schwab said on Tuesday President Rick Wurster will succeed long-time CEO Walt Bettinger, marking a change of the guard at the brokerage firm after 16 years.
Bettinger, who became CEO in late 2008, will retire from his role at the end of the year but continue as executive co-chair of the board, the company said.
The transition comes at a crucial time for the company, as elevated interest rates have made deposits and debt costly, pressuring earnings in the most recent quarter.
Shares of the company have slipped nearly 6% this year despite a rally in equities.
"I would have hoped that Bettinger stayed on a little bit longer, even if just one more year," said Michael Wong, Morningstar's director of financial services equity research for North America.
"I would have liked to see more executive continuity, especially at the CEO level."
Schwab reshuffled its ranks in recent months, including naming a new CFO. In June, its Chief Operating Officer, Joe Martinetto, also moved to a different role within the company.
Analysts at TD Cowen said the transition was "likely well anticipated" and "seems natural," but investors will have questions about the strategy going forward.
BETTINGER'S LEGACY
Under Bettinger, Schwab grew its market capitalization to $119 billion from $18 billion at the end of 2008. Client assets also grew more than eight times over the same period.
He oversaw the company's $26-billion acquisition of TD Ameritrade and eliminated commissions on trading, a move that helped it win more retail clients.
He also steered the company through the banking crisis last year, when the collapse of three lenders raised fears about the health of the industry.
In an interview with CNBC on Tuesday, Bettinger said he had targeted 2025 as the time to retire.
"We wrapped up the integration of Ameritrade this past summer. It was really important for me to be here through that integration and to see it through," Bettinger told CNBC.
Wurster, who will take over on Jan. 1, joined Schwab in early 2016 and has been the president since 2021.
He "will need to focus on stabilizing the ship following the volatility the company has faced since Silicon Valley Bank failed," said Andrew McGee, senior analyst at investment research firm Third Bridge.
The incoming CEO is inheriting one of the largest brokerages in the country, and will need to navigate emerging trends and competition to stay at the top of the game.
"Every several years, there is new innovation in the financial sector that Charles Schwab (NYSE:SCHW) has had to adapt to, like zero commission trading," Morningstar's Wong said.
Still, transition may be smooth because Wurster "is well known to the Street as he is a consistent contributor to Schwab's quarterly updates," TD Cowen said.