Charles Schwab & Co. has again dipped into the pool of former First Interstate Bancorp executives to fill a key management position.
The San Francisco-based broker has tapped Linnet F. Deily, most recently chief executive of First Interstate's $6.8 billion-asset Texas bank, to oversee its unit that serves 4,700 registered investment advisers.
In May, Schwab hired Steven Scheid, who worked for Ms. Deily at First Interstate, as its chief financial officer.
Ms. Deily will join Schwab next month as executive vice president and general manager for investment management services. The unit is one of Schwab's fastest-growing businesses, accounting for almost one-third of all customer assets at Schwab, the company said.
Founded in 1987, the unit has attracted $63 billion in financial adviser assets, rising 43% from $44 billion in the past year alone.
The unit Ms. Deily will head is part of Schwab's institutional division. It provides financial planners with a supermarket of about 1,470 mutual funds and trading support for other securities, plus custody services and record keeping.
In effect, Schwab serves as trading desk and back office, consolidating and automating tasks planners once had to perform themselves.
Ms. Deily will report to John Philip Coghlan, executive vice president in charge of Schwab Institutional.
"Linnet brings to Schwab Institutional a level of management experience and national stature that fits well with the size and importance of our ... business," Mr. Coghlan said.
Schwab's market share among planners using service agents was estimated at 80% at the end of 1995, according to Cerulli Associates, Boston.
But Fidelity Investments and Jack White & Co. have launched rival services that are winning some business at Schwab's expense, as some established vendors diversify by using more than one firm.
Ms. Deily "has a long row to hoe in terms of regaining the trust of those financial advisers," said Mary McAvity, a Cerulli consulant. Many think Schwab has encroached on their business by crossing the line from service agent to competitor, she said.
Ms. Deily will replace Jim Hackley, a senior vice president who was recently shifted to manage the Schwab 500 brokerage, the division for active traders.