Schwab wearing a new look

Last week, as Charles Schwab Corp. officially dispensed with its co-CEO designations for David S. Pottruck and Charles R. Schwab, the man many financial advisers had viewed as the company’s third chief executive said he is leaving to seek another fiefdom.

These changes, coupled with a variety of new appointments and corporate realignments, leave San Francisco-based Schwab with a different appearance and feel for advisers who look to it as the mother ship.

John Philip Coghlan, a Schwab vice chairman, shocked advisers and co-workers by announcing his decision to devote all his energy to becoming chief executive of another company, still to be identified.

“He’ll be a great loss,” says Neil C. Hokanson, president of an eponymous capital management company in Solana Beach, Calif., that oversees $130 million. “He was instrumental in getting Schwab where it is today.”

“He’ll be deeply missed,” says Richard D. Steinberg, president of Steinberg Global Asset Management Ltd. in Boca Raton, Fla., which manages $300 million. “He was feared and respected, which was definitely needed at Schwab.”

Deep bench

The silver lining is that Mr. Coghlan knew how to clone himself. “There is a very deep bench,” Mr. Steinberg adds.

But that bench, once brimming with homegrown talent, is starting to take on more of a multinational corporate and East Coast establishment look.

As recently as January 2002, it was longtime Schwab veterans Gerald Graves and Mr. Coghlan who represented the face of the firm for independent advisers.

Mr. Graves moved to the retirement side of the business in January 2002 to make more room for Deborah McWhinney, who spent many years with Bank of America and later VISA International, both in the Bay area. She heads the advisory division of Schwab Institutional.

Mr. Coghlan’s duties are being taken over by William L. Atwell, a 23-year veteran of Citigroup Inc. of New York who joined Schwab in 2000 after a four-year stint at Philadelphia-based CIGNA Corp. Mr. Atwell maintains a home in Farmington, Conn.

Ms. McWhinney now reports to Lon Gorman, another Schwab vice chairman, instead of to Mr. Atwell. A 16-year veteran of Credit Suisse First Boston Corp. of New York, Mr. Gorman joined Schwab seven years ago and is now based in New Jersey.

Lance Berg, a spokesman for Schwab, says it would be wrong to view the corporate staffing and realignment as a wholesale changing of the guard to a new breed of manager.

“There’s balance,” he says, noting that longtime Schwab executives such as Mr. Pottruck, Mr. Schwab, chief financial officer Christopher V. Dodds and Dawn Gould Lepore, Schwab’s vice chairman for technology, operations and administration, continue to exert considerable influence.

wide acceptance

This new breed of professional managers – most notably Ms. McWhinney and Mr. Atwell – is widely accepted by Schwab advisers.

But advisers admire Mr. Coghlan’s ability to listen while madly taking notes on the back of his own business cards, then following up on those notes.

They recognize that Mr. Coghlan made the Schwab Institutional sales team the envy of the industry, as it displayed the backbone of its creator, Mr. Steinberg adds.

For instance, last year, it was the Schwab Institutional sales team, led by J. Nicholas Georgis, that stared down San Francisco-based Advent Software Inc. in court and won an extension in the use of point-to-point data downloads.

Meanwhile, the rumor mill is cranking up big-time about where Mr. Coghlan will end up. One rumor has him going to a big bank. But an impressive rumor – built on an unsubstantiated press report – has him taking over TD Waterhouse USA of New York after Toronto-Dominion Bank divests it.

Why didn’t Mr. Coghlan play the field while keeping his day job?

“John takes on a job to win,” Mr. Berg says. “He wouldn’t feel comfortable in a job search while in a job at Schwab.”