By Bill Beggs Jr.
As they do at countless companies from St. Louis to either coast,
workers begin streaming into Scottrade Inc. headquarters in
Des Peres bright and early. The flow of people into the building—some
straight to the elevators and others into the Bulls & Bears
Café right off the lobby for breakfast or a cup of joe—starts
to pick up between 7:30 and 8 a.m.
But with the Internet business model at the forefront as a robust
way for investors to work the market, one might think many of
the more savvy self-styled traders would be operating on little
sleep and plenty of caffeine.
Not so, says Rodger Riney, 61, CEO of Scottrade, who didn’t
get to the café much earlier than anyone else. He’s “Rodger,”
not “Mr. Riney,” to everybody, whether he’s in the next office,
or she’s on the other side of the sneeze shield serving scrambled
eggs. Approachable and low-key, Riney smiles warmly and often
and speaks matter-of-factly about his vocation—and avocation—for
the last 27 years.
With 1.7 million clients and 300-plus U.S. satellite offices,
Scottrade has plenty of business to say grace over for the time
being. That’s not to say Riney and his 1,800-plus employees,
500 of them at headquarters and roughly 750 total throughout
St. Louis, aren’t in an aggressive growth mode. It’s just that
the computers and servers are the only company representatives
expected to be up and at’em 24-7. And with need for capacity
ever expanding, the I.T. department at present has 65 job openings
to accommodate the company’s growth plans. (“At least,” says
Riney, with a weary smile.)
Getting business done during an eight- or nine-hour workday,
and obviously enjoying it, is unmistakably part of the corporate
culture at 12800 Corporate Hill Drive.
After all, where the rubber meets the road is at www.scottrade.com,
the user-friendly portal where ordinary citizens with $500 to
open an account—from the novice investor to the sophisticated
trader—can execute trades for $7 apiece. With a discount broker,
what they aren’t paying for is advice, counsel and recommendations.
There are a number of full-services brokerages around town for
that. One of them, Edward Jones, an industry leader, right across
I-270, is where Riney cut his teeth in the business.
Anyhow, why don’t the Scottrade servers click wildly all day,
every day, since they certainly could?
“A 24-hour day someday I’m sure will happen,” Riney acknowledges.
“The average investor in America today has their hands full
just keeping up with the thousands of mutual funds and thousands
of companies they need to research and study in order to decide
what they want to purchase and sell.
And the reality is Scottrade’s systems operate 24/7. Customers
can check their accounts and place a trade at any time, but
the trade can only be executed during market hours.
“It has not really blossomed into a major investing event—yet—in
terms of pre-market and post-market trading.”
Not on an institutional basis, at least.
“Money managers in charge of significant amounts of capital
and with the sophistication to study that trend are looking
and watching.”
Financial acumen could be in Riney’s gene pool. After graduating
from Kirkwood High in 1963, he majored in civil engineering,
starting at Oklahoma State and finishing up at Mizzou. His father’s
first career was as an engineer, but he effectively retired
from his “real” job building highways and bridges to follow
the stock market in the 1950s. Investing as an avocation became
his life’s passion and pleasure. If he follows in his father’s
footsteps, Riney has at least 40 more years of rewarding work
ahead of him. His dad passed away at 101.
Upon earning his MBA, Riney joined Edward D. Jones in 1969.
Destiny called in 1980, whereupon he and a former colleague
headed west to form Scottsdale Securities on North Scottsdale
Road in, where else, Scottsdale, Ariz. Riney didn’t stay that
far west of the Gateway City for too long, moving the fledgling
firm to St. Louis in 1981. By 1990, the company had 14 offices
coast to coast, and in 1994 Inc. magazine named it among the
500 fastest growing privately held companies in the country.
In 1996, the firm premiered online trading, and in 2000 the
name changed to Scottrade to reflect the domain name on the
Web.
Post-millennium, the company really took off. In 2003, the company
opened a Chinese trading platform and also celebrated its one-millionth
customer. The next year, it opened its 200th branch. In 2005,
Scottrade celebrated its 25th year in business as a discount
brokerage firm by offering its now-standard flat-rate commission
of $7 for all online market and limit orders. That October,
Scottrade received the J.D. Power and Associates award for investor
satisfaction—for the 6th consecutive time.
That same year, Riney’s employees surprised him by presenting
him with his vintage Corvette, which his employees had paid
more than 10 grand out of their own pockets to restore for their
fearless leader.
Somewhere in there the name went up on the former Kiel-cum-Savvis
Center, and folks who had no idea of the quiet financial giant
in their midst started to become aware that Scottrade was not
the online subsidiary of a paper-towel manufacturer. Terms of
the indefinite agreement, company officials very politely say,
will not be disclosed, but suffice it to say that at least every
hockey fan from coast to coast now knows the Scottrade name.
Of course, it wasn’t happily ever after for Scottrade and any
other financial services firm when the late 1990s dotcom bubble
burst. But with Riney at the helm, how the company weathered
the storm speaks volumes about its principles and integrity,
not to mention growth strategy.
“No one saw it coming. We all knew it was long overdue,” Riney
recalls. “But it lasted a year or two longer than probably most
people thought it could, or should.
“As business dropped off, the value of our branch offices to
our customers didn’t seem to vary. We continued to open offices,
and continued to grow where those offices opened. We never really
let up on expansion, even though we weren’t making as much money
in ’99 and early 2000. We just kept going and adjusting to smaller
profit margins.”
“But we didn’t lay anyone off, and we didn’t close any offices.
It turned out to be, in retrospect, the right thing to do. Others
took a different approach.”
Throughout the market “correction,” Scottrade’s business model
and pricing structure stayed consistent, as well. Most significantly,
perhaps, in just three years the firm has opened more than a
third of its offices, having grown from 200 in 2004 to over
307 today. (At this writing, Scottrade was scoping out a location
in Columbia, Mo., among others. Having recently surpassed Charles
Schwab, Scottrade now has the largest branch network in the
online brokerage industry. Scottrade and Schwab rub shoulders
with three other companies that make up the industry’s “Big
5”: TD Ameritrade, E*Trade and Fidelity.)
Many customers have never visited a branch; they’re true online
investors who may mail in checks or transfer funds electronically.
Between 40 and 50 percent of Scottrade customers “feel very
comfortable on the Web,” Riney points out. “They’re computer-savvy.
Our site’s pretty intuitive, easy to use.”
With that in mind, it may come as a surprise that about 60 percent
of Scottrade customers visit a local branch on a regular basis.
It’s typically not a weekly or even monthly visit; in most cases,
a customer may swing by to drop off a check or stock certificates,
or to consult with a representative for help in ironing out
any wrinkles in the online experience.
“We feel that the Web and the branch go together, and support
one another very nicely. The Internet is just a way of delivering
a service,” Riney emphasizes. “What’s been important over the
last 10 years is that it gives the investor access to so much
information that previously was in control of their broker.
“The web provides research and fundamental facts about companies
that you previously had to get by asking your broker to send
an S&P sheet. The subscription prices were too expensive for
the average investor to afford.”
Of course, the same data is free at the library, but as somebody
once said: Time is money.
“Since the Internet came along, all of that information, and
a lot more, is free, and available within a few seconds, a few
clicks.”
Or, perhaps, after a call to the branch for a few web-browsing
pointers from a real person. No matter where the branch is,
St. Louis, Scottsdale or Honolulu, it’s the same storefront.
Customers get the same experience in person or on the Web. In
this wired age, IT has ensured that this process is seamless,
whether one’s business is securities or car rental.
Suffice it to say, all of this has kept Riney on the run. Although
he has the frame of a runner, he doesn’t do much of that. He’s
starting to play a little more golf. But you’re not likely to
run into him during the Moonlight Ramble, or at Vail. His life
is his work; his work is his life.
“I don’t do much in the way of extracurricular activities,”
he says, with a chuckle. “This business takes up a lot of time,
and it’s my primary interest outside of my family. It’s my avocation
and my vocation, both. It’s a lot of fun.
“I come in here on weekends, all hours, depending on the mood
I’m in. I do some things sometimes and sometimes I don’t do
a lot, but whenever I’m here, it’s comfortable.”
After a pause, he admits to enjoying trips to the family getaway
place at the Lake of the Ozarks, where they have a pontoon boat.
He does take plenty of magazines to read, more likely Forbes
and Fortune than Field & Stream. Or Golf Digest.
Rodger Riney doesn’t own a laptop. When the day’s work is done,
he turns off the light and heads home, usually between 5:30
and 6 p.m. His business doesn’t keep him awake, he says with
a shrug. Well, what about when the Dow Jones Industrial Average
passed 14,000 a while back? Riney was not in the least flustered.
The company just did an even brisker business, he says.
Riney has been married 28 years. He and his wife, Paula, have
two sons in their 20s, a daughter and two granddaughters, the
youngest of whom isn’t quite two months old. All are living
in town. The youngest son is studying business and finance at
Washington University, the oldest is working at the Scottrade
branch on Manchester Road, and his daughter is a stay-at-home
mom.
It appears that the apple didn’t fall far from the tree, at
least for the elder boy. As for the younger?
“Maybe not,” the would-be civil engineer says, with a broad
grin. “We’ll see.”
