Good morning everyone, welcome to the Spring 2016 Schwab business update. This is Rich Fowler, Head of Investor Relations for Schwab coming to you as always from beautiful, but currently a little rainy San Francisco. Thanks for joining us at the end of a very busy week, with me here in the studio are Joe Martinetto; our CFO; and Walter Bettinger, our President and CEO. Per our usual practice with these interim updates, we’ll spend a focused hour with these two sharing their perspectives on life of Schwab right now. Starting off with some prepared comments and following up with the Q&A until it’s time to wrap. I think we had a pretty straightforward quarter and I think this will see like a very straightforward update although Professor Martinetto will inevitably have at least one or two technical details to walk us through. Walt is going to start us off, but let’s spend a minute on the ever important forward-looking statement page, the main point of which as always is to remind us that things will never turn out different than we think, so please stay in touch with us as we update our disclosures through the course of the year. Let’s cover the dial-in, in case we get bumped off or you need to make a note of that. There it is upon the screen. Let’s cover questions, as usual we’ll do so via the webcast council as well as the dial-in and when we start the Q&A session, we’ll ask the operator to remind us how the process works. And with that I think we’re ready to get going. So Walt, please take it away.

Thank you Rich, good morning everyone, thanks for joining us, investing a bit of time with us this morning to go through our Q1. We continued to execute on our strategy, long term strategy during the first quarter and our financial benefits began to illustrate some separation between Schwab and other investments, overseas firms are 16% revenue growth, 36% net income growth clearly stood out. But as always, our focus is on serving our existing clients as well as striving to add hundreds of thousands of new clients each year. Now certainly, as the environment involves whether its due technology evolving client expectations are even regulatory changes, we feel confident that we remain ideally positioned. So, it’s definitely evolve to core for our clients, we know what happened the market plunged early in the quarter and then it rebounded sharply. And as one might expect during a quarter like that or client did tend to trade a bit more then might in a period with less volatility. Interestingly, client cash balances remained relatively consistent, they grew pretty much in proportion to organic overall client growth that indicating, I think, the clients really didn’t panic even during that first half of the last quarter. We continued our focus on expanding our planning capabilities with clients, we completed about 35% more financial plans for our clients and we did in the same period a year ago and also continued to grow the number of our clients who are enrolling in our advisory solutions. And our core, finally our client base continue to grow during the quarter we reached almost $10 million in active brokerage accounts and we’re claiming our way I guess, inching our way off late toward the $2.6 trillion asset level as our core net new assets exceeded $30 billion…

Great, thanks Walt. So, as running through the list of things that we usually talk about at the start of these events and I realize that there was a lot of bad news, so Rich may have called this a top down day and he might have been willing to drive with the top down, I had to go back upstairs and get an umbrella for the walk to the office this morning. The giants last yesterday, the warriors lost last night. And on top of all of that probably worse news for the investment community in all of this for those of you who don't know Chelsea has decided to leave the workforce and stay home with their family for a while so for the folks who deal with our investor relationship department for the rest of this year is the big loss and I am sure we are all going to feel thing for her years of helping service here. But tough news for all of us here so it's a really good thing that we had a good quarter to talk about. It also would have been kind of an ugly morning. So we will spend some time talking about Q1 and it feels like we have been talking about what would happen when interest rates moved up forever it's nice to finally have a quarter where we can talk about what happened when interest rates moved up and demonstrate that we are delivering on the power of the model that we have been talking about for so long. We will spend some time talking about the outlook for the rest of the year and then some of the things that we are doing around balance sheet and capital management. So let’s jump right into some of…

Alright, thank you gentlemen. Operator if you can just run us through the protocol for questions over the phone. And then, I think everybody knows how to use the webcast console to this point.

Thank you. [Operator Instructions] And your first question is from the line of Richard Repetto.

Yes, good morning Walt and good morning Joe. I guess the first question is, in the scenario that you just laid out Joe, you do get the fed increase in your growth, I guess 1% to 2% higher or if you don't is the low teens. Would you still try to maintain that 500 basis point spread between the growth rates of revenue and expenses on both sides, in both scenarios?

Well, certainly in the up scenario that we would expect to be able to do that and the down scenario I would say we would have to look hard at how much of the revenue softness we would want to offset, I think we would want to look at the traction we are getting with some of the spending and what we thought was the right thing in terms of making that trade off in investing versus near term profitability. In either scenario I think we would produce a very substantial spread between the pace of revenue growth and expenses whether we would get all the way to 5% it's too soon to lock ourselves into that scenario we are going to have to see how things evolve over the next quarter or two.

Okay and just one follow up, you talked about positioning the balance sheet or getting it ready for the suites that are coming later in the year and I guess the question is for us what’s the cost of funds for the federal home loan, FHLB advances, what’s the average we could model in? And then, what do you expect over the whole year, the growth and the average interest running assets because it used to be in-line with NNA, you by far surpass that with all the swipes and everything?

Sure, so I think you kind of get back to what -- on the home loan borrowing the average cost there you can use something in the 50 basis points area. We could get as high as on the outside as $5 billion borrowing number, I think that would only happen if we saw really great opportunities in the investment market, but we could get as high as $5 billion in Q2. So that at least gives you some parameters on the borrowing. In terms of the balance sheet growth I think there is a lot of dynamics which make it a little tricky. I would expect as we get into Q2 the pace of growth that you have seen for past couple of quarters is likely to slow having the insights and watching client cash balances here in April I know lot of our clients are paying taxes and that will definitely slow the pace of growth in Q2 as it normally does in terms of seasonal factors. The long term number for client cash seems to be in that 12% to 13% area for now. We would expect cash across the complex to stay in that general area. The outsized growth that's being produced on the balance sheet is really the movements which is why we try to get pretty specific you have got the billion for with 9 billion more coming later in the year, so that's $10 billion over the course of year incremental transfers on top plus the $3 billion is in the nine. Plus the incremental growth that we would expect from just normal client activity which is in $11 billion or $12 billion per year at this point. So, we would expect to see the balance sheet up something north of $20 billion over the course of this year the organic growth rate is still relatively consistent the inorganic transfer rate is highly dependent on our ability to either generate or raise capital and so it's hard to be real specific there I would say we will be as opportunistic as we can because of the opportunity that we see for that capital. But that capital is not readily available at all times it just moves as much as we want.

Got it. Got it. Very helpful thank you.

Your next question is from the line of Bill Katz.]

Good morning Bill.

Good morning, [indiscernible] I apologize for this. Could you talk a little bit about on the department of labor what you might see from the revenue impact and or elevated expenses, I think we have heard from some of your peers that they would anticipate some lift of expenses but seemingly manageable and might differ other type of spending I just wanted to know you might be able to frame your comments relative to how you think about expense guidance?

Sure, I don't think at this point we could responsibly make a projection of revenue lift as a result. It's just too early to see how firms who might be more impacted by the regulation will determine how to deal with it. I guess my assumption would be that they will modify their product set or their solutions that the market declines and not give up shares maybe give up some economics in their model. So that's why I indicated that I think that the although there is some potential for positive upside for us I am cautious around that because I would be surprised if firms will choose to give up share very readily as opposed to maybe giving up a little bit of their economics. In terms of expense, as I mentioned we have begin planning for this last year and had put teams together and begun working on a number of different possible outcomes based on not just what the department every had proposed but where we anticipate they might go. It's just not meaningful numbers. It's you are talking about something measured in few million rather than big numbers. So it's just not meaningful, but we did budget for in both ’15 and ’16 and plan for it and so we don't expect you to see any impact from that in our financial results.

Okay that's helpful and then just last one if I may, and you may have covered this. Again, I apologize. In terms of the $9 billion of accelerated transfer of assets onto balance sheet any sense of what the kind of duration we should anticipate on that transfer?

Yes, I will expect the portfolio implication will look a lot like the balance sheet overall so probably in that at the bank north of two year duration to two-and-a-half years largely in the same kind of products that we typically invest in we are not looking to change anything in the strategy or the risk profile just doing it in a little bit oversize.

Okay thanks for taking my questions.

Your next question is from the line of Chris Shutler.

Hey guys, good morning. On the DOL can you just talk about the I know it's early, but the mechanics related to rollovers and I guess from a couple of different angles what your roles are from one of your 401K plans as well as just roles more broadly in the market. Just how you see that changing if at all?

Yes, I mean I think our view is that of course recommendation that meaning even a suggestion or call to action that's directed at any plan participant into an IRA’s fiduciary advice is going to be the subject to full BIC, best interest contract. However, as we advocated in between the time of the proposed regulations and the final that carefully constructed education only type conversation prior to the person making a decision to open that IRA is possible consistent with the approaches I think we currently take with, I’m sorry, suitability guidance. So again, I think our view is at the big picture you are talking about, modest impact to us in terms of anything that you would notice in terms of financial results or metrics or things of that nature.

Okay thanks and just one other one on mutual fund once, it seems like the balances there conceded to decline I know a lot of that shifts continue movement of IRA institutional share classes but do you have a sense of what the fore is on the balances and is it is the way you are basically offsetting that by not necessarily in the institutional area directly but more on the retail side some of these adviser offerings? Thanks.

So I think where you are going on with one source is no different than what’s going on across the active asset management world. Whereas 20 years ago a number of firms have worked to build out a broader menu of proprietary actively managed product our strategy was more than the open architecture process with one source and yet as we sit here today we are all experiencing similar decline in terms of usage of active products. We are not going to be exception to the mega trend that's going on in the industry. I think you would accurately identified significant share of the decline in one source is attributable to RIA moving to institutional price product whereas the retail investor tends not to move as readily or as certainly doesn't have a mutual fund sales person calling on them telling them to move like you are going on in the RIA space. I don't know that any of us can identify a flow point because you are looking at mega trend that's being going on toward passive management. But I also think that as we identify this as something that we have thought could be a risk, a dozen or more years ago we began to on the retail side develop advisory solutions that used more passive product underlying with an advisory feed from us wrapped around it that actually in many cases delivered for the client more diversification, a lower overall cost and yet all revenue goes up measurably. On the adviser services side I think the counter balance there is the movement to using the bank for suite, so we worked very carefully with our advisory board within the RIA business educated them about what was occurring within that business and they have been highly supportive of our using the bank as a way to generate some revenue that counter balances the decline from more use of institutional mutual funds and UTS.

Alright. Thanks a lot.

Thank you.

Your next question is from the line of Brian Bedell.

Maybe another angle on different angle on DOL, well for you are you seeing are you hearing about any potential change in behavior and how the investment adviser in your adviser services segment might change their way of allocating between active and passive products broadly as the result of DOL and then do you see this do you still see DOL an accelerant for the robo advisory product and how much of an accelerant is that?

So, we had advocated with the DOL we are pleased to see the level fee of fiduciary of wording within that regulation I don't think that you are likely to see an accelerant in the RIA space away from active because largely that's played out already over the last ten full years and you have seen it in the declines one source balances from the RIA, so I don't think you see something meaningful that comes out of that. With respect to the digital or online advice I am going to go back to the broader response I have had on that in the past which is you could possibly see some money moving that way but I just think that everybody is going to have if they don't already everybody is going to have these types of products these types of solutions. And so, you might see some money headed that way but I would be surprised if you see major market share move as a result of it because it's just not that differentiated in many cases from one firm to the other now there maybe some exceptions some of the IDBs and other firms that have a higher cost of distribution come out with digital advice that might have higher fees but as you sit here today there is just not dramatic differentiation among those products. So, I don't think you see big market share moves.

Okay and then maybe some take on to that as we think about the wire houses in there the breakaway broker trend so you see DOL changing these strategies at the wire houses that might influence the breakaway broker trend in longer term?

I don't think so. I think the factors that have led to that and we all know that there is modes trend of brokers going independent and you don't have the reverse occurring so that's played into more accelerated growth in the RIA space than maybe the wire house space, but I don't think the DOL regulation has much impact on that. I think it's driven off far more substantial factors whether be ownership freedom flexibility entrepreneurial nature terminal value the ability to be more flexible in serving clients I just think those factor sort of swamp the implications of the DOL regs in terms of that trend.

Okay, great. And just a quick one for Joe, can you talk a little about the re-pricing dynamic for the margin lending I know you haven't increased the rack rate, but you’ve been removing some of the discounts on those products any thought at revisiting, raising the rack rate, if we get a June hike and then on the deposit data if competition is such that you don't have to raise deposit pricing is that a significant upside, as we go forward in 2016?

Sure. So I would say on margins you know that we didn't increase the base rate when rates moved up largely we try to enhance the competitive positioning of our rack rates impact of that is maybe less than people think because we have got so many clients across both the retail and advisory businesses that are now on discount or custom schedules that are linked to market industries that are not -- to that base rate or rack rate structure so it has I think a lot more to do with how we appear to be competitive in the market than it has to be do necessarily with a nimb impact. And just for the little bit more color on that we are probably somewhere between two-third and 70% of our balances now tie to schedules that aren't tied to the rack rates. So just to keep in mind when you don't see us move a base rate change like that it's not 100% of that it's not coming through because the clients are on, those are the schedules are tied other rates like LIBOR where they are moving up so we are picking up some of the benefits and I think you can see that play through the change in dynamic of yields on margin. So, we will continue to evaluate what we look like from a posted positioning perspective and make decisions as appropriate around moving that base rate. Largely probably more in consideration of how we look position competitively in the financial dynamics because a lot of the dynamics aren't driven by that rate. On the deposit pricing side I think we are going to watch what happens in the competitive marketplace we have factored into our planning models that some competition might develop and we end up meeting the push rates up some I am not sure that that's necessarily going to develop in the marketplace and to the extent that we think the competition for the balance sheet suite balances is more directly tied to interest checking accounts than money funds and as you’re trying to think through the degree of sensitivity we’re likely to experience the interest checking world as probably a better benchmark than money funds in terms of how we would expect those yields to clients to move up over time.

Great. Thanks. That's great color. Thanks very much.

Joe, before we go on maybe to elaborate on that a little bit just so it's clear to folks when you talking about the sensitivities, deposit and so forth how does that relate to our the rule of thumb we have been using we have talked about the 60 per 100 for the first couple of hundred basis points of fed funds moving my sense is that what we are talking about is at least as far as the long end of the curve is concerned the non-parallel shift puts a dent in that. The fundamental math or relationship stays, but with the curve not moving to parallel fashion that does at least temporarily sort of doing that sensitivity and then I don't think what we are talking about is a change in our overall again sort of rule of thumb but there you know just watching the dynamic of how it might fold in I think is peer maybe you could spend just a minute more on that just to help make sure folks get the variability there.

Right. So, I will try not to spend more than a minute on that because like I could probably do an hour on that. So, I think the way you positioned that is correct. There is a variety of things that run through the net interest margin math as we talk about the sensitivity to changes in interest rates. The bottom line is that 60 basis points per 100 was tied to parallel shifts in the curve and assuming that all other things being equal in the investment market we would be able to access the same kind of products in the same kind of degrees and then we had some embedded pricing assumptions about what would happen to client rates as we moved through that part of the cycle. As you said we are getting the short end coming up at the same time we are seeing the long end come down. That's much more beneficial than the alternative because about two-thirds of our balance sheet is tied to the short end of the curve about third is tied to the longer end of the curve and because we are seeing relatively bigger shifts in the short end we are fastly outweighing the longer term impacts that long term part of the curve you get the shorter term impacts faster because that into the curve re- prices move quickly the long term is more of a gradual impact as you will off cash and reinvested into the market are getting new cash to invest at current rate levels so for all of that because we have more tied to the short end and every price is faster the things the experience which we are having changes the interest rates is leading to positive effects on NIM, but less positive…

Okay thanks. And we have another question on the phone?

Your next question is from the line of Douglas Mewhirter.

Good morning. I had question for Walt, you said that you had hired 25 financial consultants in the quarter first of all was that a net number sort of net attrition and second maybe in a bigger picture question I know there is this tension right now your retail business seems to be very well there seems to be too many customers to service and not enough consultants and there is huge opportunity but I also know that you are very mindful of margins and there is a big discussion of that in your last update about how you are going to be very cautious and how you expand has any of that view point changed given the it looks like the retail business was very strong this quarter where you might maybe step up the hiring a little bit even though the interest rates haven't really started to come up yet?

So, the 25 of financial consultants and support staff that I referenced in was part of a plan branch expansion primarily focused in the East coast so it's not specific to either a gross or a net number it was around a specific aspect of the branch expansion strategy the with respect to investing in the branch relative to margins I don't think we will deviate from a longer term strategy because we had a particularly strong quarter from the financial standpoint in Q1 just like if the quarter had gone the other way we probably wouldn't deviate away from the long term strategy. In the long term we want to make the investments that give us the right mix of relationship capability technology and price value for clients and the component of that that involves relationship is more feet on the street. But we likely won’t deviate on that based on the quarter by quarter basis. If we were to get a unexpected rapid increase in interest rates from the fed that could influence us but I don't think quarterly results.

Okay, thanks that's all my questions.

Thank you.

Your next question is from the line of Chris Harris.

Thanks guys. Just a couple on the DOL, you mentioned a low fee exemption as it applies to the independent advisers?

Level fee.

Level fee, sorry low fee sorry about that. Yes that was -

Maybe it's low level fee right no it's a level fee sorry.

Right, low fee wasn't one point do you guys think that that exemption could potentially qualify for Schwab Financial consultants or is there just too much going on at the firm level for that to be applicable and then, related DOL question I have is regarding the independent branches do you guys bear the liability from the DOL perspective or is that separate?

So, I think it's too early for us to say whether the level fee exemption could apply for us. But it's certainly one of the things we are looking at whether it has application across the retail network and not just within the investment adviser space. With respect to the independent branch network I don't know the very specific answer to that question around the contract that we should take look at what I know is that independent branches offer the exact same product, services and pricing as our retail channel there is no they are not in control of pricing or models or building portfolios or anything of that nature but actually we will research the more detailed question that you had with respect to the FDD that they signed and maybe Chelsea or Richard get back to you on that.

Alright. Sounds good. Thank you.

Thank you.

Your next question is from the line of Kenneth Worthington.\

Hi, good morning. So, continuing on the topic to your to what extent are new or existing retirement assets in your various advise offering subject to the bank or level fee exemption and is it just the new assets or the existing retirements assets impacted here and are there certain of your advise offerings that either are or are not subject to the level fee exemption rules and you can offer retirement assets? Thanks.

Yes, I believe that it is all assets are subject to fiduciary, I don't think it's an issue of necessarily going forward but that's a good question. I don't know if I am giving you the exact right answer there I guess I would say this though to the extent we determine that we are going to make changes within our advisory solutions as it would apply to new clients the greatest likelihood is that even if we didn't have to we would make the exact same adjustments for existing clients because we wouldn't want to create a situation where depending on when someone entered and offered they ended up with a better value or a different structure than another investor.

Okay. That makes sense and then I am sorry if you mentioned this I didn't quite get it you think all your advise offerings will be subject or still too soon to know that?

Yes, we believe any advisory offering any buy-sell recommendation anything of that nature would apply within IRA or contemplated IRA rollover.

Okay. Awesome thank you very much.

Thanks.

Next question is from the line of Conor Fitzgerald.

Hi, good morning. The BlackRock agreement with an independent broker to sell, it's platform I know you have talked about that being the opportunity for intelligent portfolio in the past can you just give us an update on how those conversations are going.

Yes, it wasn't a great idea. It led to the future adviser, BlackRock deal and so I think that our intelligent portfolios model was principally designed around retail and the RIA space. In the RIA space the integration between the digital advice offering and your custodial platform is really important. These are generally smaller businesses and that integration is key, and they are used to explaining to their client custody of the assets at Schwab. So it's really a perfect fit there. As I have indicated we had received and have received some interest from other parties who want to look at our intelligent portfolios platform to possibly use within their business model and that continues. I do believe that when you talk about some of the larger firms whether they be banks or other distributors some of them are going to have hesitancy around the Schwab brand. They may feel like they compete with Schwab retail and to those people a solution that doesn't involve a branded potential competitor to the retail business is going to be more appealing. So it just it really just depends on which company but I am going to go back to the big picture issue there everybody of sizes is going to have this kind of solution some of will use Schwab, some will use non branded platforms. If people want to use our platform and it makes sense for them and us we will do so. I would as I believe I stated at the annual meetings but if I didn't if I said this morning internally I will say it externally now that is a small aspect of this whether any true non RIA, non retail investor choose to use our platform. I don't expect that that's some large scale issue from an economic standpoint.

That's helpful. Thank and maybe just to go back to the discussion around the deposit pass through, it's tough to handicap but do you have a sense of how much of competitors not passing on rates just be uncertainty of future rate hikes versus maybe a structurally lower competition I guess if do you think if competitors have more confident that fed was going to continue hiking it get more aggressive?

That's alluded question. So I would say what we have seen from past history is a lot of the banks have much longer asset ration than we have and as rates start to move up they are slowed to move deposit rates because they are fighting to maintain that interest margins. So exactly how this plays through is going to have there is a lot of factors in terms of what happens with the shape of the curve and their ability to invest it and try better yields what we see develop in the competitive marketplace for funds we have the overlay of things like the LCR that tip the industry since the last time we had a great scenario which might increase competition for retail deposits. On the flip side there is so much money swashing around the depository system that could be an offset those competitive pressures. it's challenging to call I don't think anyone is to all a metric model has enough experience with the current factors to be highly predictive which is why I am hedging a little bit here. But my gut would tell me that we are like to see the large bank be fairly slow passing along rate increases even if the fed moves at a quicker pace of movement and so we are likely to the extent that we are benchmarking more off things like interest checking like going to move slower with rate increases than we have moved in the past with those on balance sheet products.

Joe, I think we would all we would probably agree with in any environment there is likely to be some competitor out there buying deposits. I mean, there is going to be someone we had a competitor last time we are in a higher rate cycle that was sort of buying deposits and money changing type manner and that will probably go on again. But the real question is the big guys as you talked about.

I appreciate your thought. Thanks.

Okay I am going to just step in with one of the webcast questions before we go on with the phone. Joe, maybe you can just remind us why does 250 billion matter in assets at the bank what are the ramifications for us as we get to that kind of the level of eventually?

Sure. So that’s in consolidation not assets of the bank at $250 billion we would be subject to what’s called advanced approaches. So there is a number of things that get triggered at that point a lot of it has to do with regulatory expectations for how you model and control your business pieces of it have to do with how often you report there are some changes to things like LCR compliance whereas below 250 we assume 70% of the prescribed runoffs at $250 billion against the approaches, we would assume 100% of the prescribed runoffs I think the final piece that the more mechanical as the exclusion that we have adapted for changes in AOCI from our regulatory capital ratios will no longer be excluded. So those unrecognized gains and losses will flow through the capital account. I think that's manageable to the extent that we still use to help the majority portfolio for a lot of the more evaluation sensitive balances so there is and some volatility be introduced but should be manageable there will be some additional cost, but quite honestly we are building towards some of those expectations even now as we continue to build toward the potential to be in the C-car program a lot of what we are building would be consistent over time with an advanced approaches obligations so much like we have done with a lot of the developing regulatory changes we are building toward it. I don't know that you will see a market increase in our expenses at any given point in time we would rather build toward more gradually and be ready as we get to those levels as oppose to get to the level and then have to run 12 or 18 months fire draw with a big increase in expenses so there is no talk at this point of things like designation, clearly the designation is adding much, much larger assets level so I don't think we will see any outsized changes in regulatory structure beyond what’s already pretty well defined in the regulation for the advanced approaches institutions as we continue to get closer to that 250 billion threshold.

Okay thanks. Let’s go back to the phone for last couple of minutes.

Your next question is from the line of [Indiscernible].

Thanks guys. Joe just that quick one on the outlook for the next margin you mentioned in the second quarter depending on how much short term borrowing you use it could be some durability around there I just wanted to get your sense on when you look at the guidance and like the low 170s for the year like how much of that is maybe in a forecast and then once the assets come on board and you have the deposits in place where would kind of the final picture be -- without that financing?

So, with no change in interest rates we expect to look roughly in line with what we reported in Q1. It could be down a little bit but when you average the impact of Q2 over the course of the whole year it's probably not going to be all that meaningful on the context of full year average, but I don't want people would be surprised that the net interest margin is little bit smaller even though net interest revenue is bigger in Q2 as a result of us to point as a bridging strategy.

Got it, okay. And then just a follow-up well there is a lot of questions on DOL and I think for the industry whether it's new DOL and kind of the long term impacts for the overall financial sector and then I think there is pockets of FinTech popping up and whether it's the robo offering there is more kind of competition or opportunities but I wanted to get your take when you look at kind of the changing environment, where do you see the greatest opportunities for Schwab and then there is always some challenges and pricing is probably one of them but it's something that we have dealt with her seems like forever and so it's not going away anytime soon but other than that any risk that you see versus the opportunities because it seems like you guys are fairly well positioned for some of these things.

Yes, I think we are I think our model of both within the RIA space and within the retail space plays very well. We have been in a fiduciary position and all of our c-base advisory retail solutions for years and years we certainly have to make some changes and we have to be careful that in some of the sales marketing activities we may have used around highlighting our rollover distribution image versus might end up being fiduciary recommendation so there is some potential modest change. But I think we are positioned extremely well and I am going to go back to, I guess maybe two big points I would make I am going to go back to the one I made that I have great doubts about major market share shifts coming out of this what I think will happen is people will change people, people firms will change their model if you trust your broker your adviser, and that person comes to you and says we have been working in the following way for the last 15 years together and now we are going to need to make a shift because the laws changed you are still going to be trusting that person and so when they tell you that we are going to do this differently the odds are not great that you are going to take that impetus to go out and find a new adviser or new broker. So there will be an economic hit potentially to both firms as well as individual broker advisers, but I have a I guess a doubt that you are going to see big market share move as a result if you do see market share move I like our position market share movement I like our positioning. I think the big point that sits out there that the DOL really in many ways the impetus of what t hey have done and the uncertainty that they have created is longer term around litigation related cost I mean if you really look at impetus of what they have done they have driven all these things out of an arbitration base solution into a litigation world where really the courts are going to decide over the coming years whether someone acted in the best interest of someone else and so whenever you introduce this as pretty big gift to the playing bar, you are going to get a lot of uncertainty and that to me is the biggest issue out of these regulations that sits out a longer term. My assumption is most firms will probably try to be pretty conservative and position themselves in a way to minimize the risk of litigation down side but that's going to involve changes in the economic model probably, probably much less so for firm like us.

Okay thanks a lot.

Okay, alright. We are out, actually past the hour so we are going to wrap up. We really appreciate your spending the time with us today if we didn't get the folks let us know and thank you Chelsea we are going to miss you.