The Charles Schwab Corporation is an American brokerage and banking company, based in San Francisco, California. It was founded in 1971 by Charles R. "Chuck" Schwab, as a traditional brick and mortar brokerage firm and investment newsletter publisher. In 1973, the company changed its name from First Commander Corporation to Charles Schwab & Co., Inc. The company started offering discount brokerage services on May 1, 1975, and became one of the world's largest discount brokers.
Schwab operates in four main divisions: investing, wealth management, banking, and trading. The company serves 9.3 million client brokerage accounts, with $2.40 trillion in assets (as of June 2014), from over 300 offices in the U.S, one office in Puerto Rico, and one branch in London. Clients can also access services online and by telephone. In 2009 Chairman Charles R. Schwab received the inaugural Tiburon CEO Summit award for Maintaining a Focus on Consumer Needs.
In 1963, Charles R. "Chuck" Schwab and two other partners launched Investment Indicator, an investment newsletter. At its height, the newsletter had 3,000 subscribers, each paying $84 a year to subscribe. In April 1971, the firm was incorporated in California as First Commander Corporation, a wholly owned subsidiary of Commander Industries, Inc., for traditional brokerage services and to publish the Schwab investment newsletter. In November of that year, Mr. Schwab and four others purchased all the stock from Commander Industries, Inc., and in 1972, Mr. Schwab bought all the stock from what was once Commander Industries. In 1973, the company name changed to Charles Schwab & Co., Inc. In September 1975, Schwab opened its first branch in Sacramento, CA, and started offering discount brokerage services. In 1977, Schwab began offering seminars to clients, and by 1978, Schwab had 45,000 client accounts total, doubling to 84,000 in 1979. In 1980, Schwab established the industry’s first 24-hour quotation service, and the total of client accounts grew to 147,000. In 1981, Schwab became a member of the NYSE, and the total of client accounts grew to 222,000. In 1982, Schwab became the first to offer 24/7 order entry and quote service, its first international office was opened in Hong Kong, and the number of client accounts totaled 374,000.
In 2000, Schwab purchased U.S. Trust for $2.73 billion. In 2001, less than a year after the acquisition of U.S. Trust, the U.S. Trust subsidiary was fined $10 million in a bank secrecy law case. It was ordered to pay $5 million to the New York State Banking Department and $5 million to the Federal Reserve Board. On November 20, 2006, Schwab announced an agreement to sell U.S. Trust to Bank of America for $3.3 billion cash. The deal closed in the second quarter of 2007.
In November 2003, Schwab announced the $345 million acquisition of SoundView Technology Group. The acquisition was intended to integrate SoundView's equity research content with Charles Schwab's trading execution capabilities, although the equity research business would come under increased regulatory scrutiny in the following years. SoundView had received a 57% premium to its market price before the announcement.
Return of Charles R. Schwab
David S. Pottruck, who had spent the majority of his 20 years at the brokerage as Schwab's right-hand man, shared the CEO title with the company's founder from 1998 to 2003. In May 2003, Mr. Schwab stepped down, and gave Pottruck sole control as CEO. Just a year later, on July 24, 2004, the company's board fired Pottruck, replacing him with its founder and namesake. News of Pottruck's removal came as the firm had announced that overall profit had dropped 10 percent, to $113 million, for the second quarter, driven largely by a 26 percent decline in revenue from customer stock trading.
After coming back into control, Mr. Schwab conceded that the company had "lost touch with our heritage", and quickly refocused the business on providing financial advice to individual investors. He also rolled back Pottruck’s fee hikes. The company rebounded, and earnings began to turn around in 2005, as did the stock. The share price was up as high as 151% since Pottruck’s removal, ten times since the return of Charles Schwab. The company’s net transfer assets, or assets that come from other firms, quadrupled from 2004 to 2008. In the fiscal year 2008, the company generated $5.1 billion in revenue and recorded a net income of $1.2 billion. For the first quarter of 2009, Charles Schwab Corp. reported $1.1 billion in revenue and $218 million in net income. Due to the company's relatively low exposure to mortgage-backed securities, the company has largely been able to escape the turmoil of the 2007–2010 financial crisis that seriously damaged many competitors. It did, however, market to clients an instrument called YieldPlus that had subprime exposure, leading to massive losses for some investors.
Walt Bettinger named CEO
On July 22, 2008, Walter W. Bettinger was named chief executive, succeeding the company's namesake.
Bettinger has been the heir apparent since he was named president and chief operating officer in February 2007. Charles R. Schwab remained executive chairman of the company and said in a statement that he would "continue to serve as a very active chairman." Bettinger came to the company in 1995 when it acquired retirement-plan services firm Hampton Co. that he had founded at age 22. Bettinger, in the company’s statement, seemed to nod to the idea that some Schwab shareholders might worry about another succession going awry: "Chuck and I have worked closely together over the years preparing for this transition," he said, "and we will continue to work closely together in our respective roles as executive chairman and CEO."
In 2004 Havas Worldwide (then called Euro RSCG) was chosen by Charles Schwab as its full-service advertising agency. In February 2013 Schwab announced that they had hired Crispin Porter + Bogusky (CP+B) as their lead creative agency with Havas Worldwide remaining to create ads for ActiveTrader and optionsXpress. In March 2015 Adweek reported on marketing material created by CP+B for Schwab's Intelligent Portfolio service.
"Talk to Chuck" campaign
Starting in 2005 Charles Schwab launched a series of television ads featuring the slogan "Talk to Chuck". The TV ads were produced by Havas Worldwide (then called Euro RSCG) and directed/animated by Bob Sabiston's Flat Black Films. "Talk to Chuck" ads appeared in print media, online, billboards, and branch offices.
A Wall Street Journal blog post described the ads as effective because they included a single memorable phrase.
Registered investment adviser firms
Schwab' business model is based on independent investment adviser firms. The company serves 5,000 independent advisers. These firms are generally regulated by state/local government or by the federal government. Schwab also offers online solutions, through online tools, for novice traders.
Competitors in the discount brokerage industry include: E*TRADE, Fidelity Investments, Firstrade Securities, IDealing, Merrill Edge, Place Trade, Scottrade, TD Ameritrade and TradeKing.
Schwab Charitable Fund
Schwab Charitable Fund is a donor advised fund which preserves the anonymity of donors by not disclosing individual donor names. Professionally-managed accounts are only available through independent investment advisors working with Schwab Advisor Services, a business segment of The Charles Schwab Corporation. It accepts contributions of real estate, private equity or other non-cash assets via a charitable intermediary, with proceeds of your donation transferred to a donor-advised account upon liquidation. This intermediary considers donations on a case-by-case basis, with a typical requirement that assets be valued at $250,000 or more.
|Trading Platforms||StreetSmart Edge®, Trade Source®, Schwab Mobile|
|Phone||866-855-9102, 800-435-4000, 888-245-6864|
|Address||San Francisco, California, U.S.|
I WISH TO MAKE A RATING ABOUT SCHWAB. WE HAVE BEEN A SCHWAB CUSTOMER FORABOUT 20 YRS. THIS OUTFIT WAS FINE AT THE BEGINNING. FOR THE LAST 5+ YEARS WE HAVE NOTHING BUT TROUBLE WITH THERE INTERNET SITE. WE CANNOT RESEARCH ANYTHING. SCHWAB KEEPS FORWARDING OUR PROBLEM TO TECH WHICH KEEPS TELLING US OUR COMPUTER IS AT FAULT. WE HAVE TO USE DIALUP BUT OTHER SITES ARE FINE. WHEN WE SIGN IN TO SCHWAB WE GET THIS BIG CIRCLE GOING AND AFTER ABOUT 15MIN WE ARE TIMED OUT. I WOULD NOT ADVISE ANY PERSON WHICH HAS TO USE DIALUP TO DO SCHWAB-THERE MB ON PAGES ARE TOO LARGE.
HORRIBLE CUSTOMER SERVICE
Charles Schwab —
I purchased stock at a total investment of $92,305.90 and sold for $130,000 yielding a profit of $37,694.10. From my brokerage acctount, Schwab withheld $36,400 for the IRS! Further, this amounted to a withholding of 96.5% of the profit! Note the withholding actually amounted to exactly 28% of the total amount of the transaction - an obvious mistake. The customer representatives blamed it on me and insisted they had not received a W9 - I had over 30 transactions in 10 years and this never came up. I resent the W9 info. and they still insisted they had not received it. I took it to a schwab location personally the third time. What brokerage withholds over 96% of any profit and tries to conceal it? According to my tax attorney they make a clerical error. Luckily the money was returned as a tax refund after I submitted my 2010 1040.
These people could have admitted their mistake and kept my business.
Do not, I repeat, do not let a broker from Schwab manage your account. My mom got talked into letting a broker manage hers and he put her into over 30 different funds outside of Schwab that charged over 1 percent in fees, plus 12b-1 fees, plus load fees. on top of that charging for the purchase for each fund. How many of those funds were Schwab? just one. And when I researched, only a couple had a good track record. The broker made his and Schwab's cut right off the top while mom lost money in 25 of the funds. And HIS fee on top of what he caused her to lose from all of those exorbitant fund cost, another 1 percent. She wanted to protect her investment and be conservative and he put her into poor performing and risky funds with less than average returns against benchmarks.
I'm very disappointmented that Fidelity is changing its web site so that you CANNOT choose tax lots when you enter a sell order. They are also making the portfolio research very cumbersome to access. I don't know what they are thinking! Do these other brokers allow you to specify a tax lot when you enter an order to sell shares?
I love Schwab. I am a struggling working person with only tiny regular amounts to invest. Every time I call, I am treated as though I have six figures sitting in Schwab's accounts earning them large fee income. They always take the time to answer any questions I have. In contrast, TROW and Fidelity reps have both told me I am not worth even opening an account for, (yes, in so many words and in TROW's case, literally). Last year, I lost my job and had to relocate to help care for my parents, who are elderly. A financial emergency forced me to withdraw money from my IRA. The guy I spoke to acted like I was his brother who was in trouble. Schwab waived all the fees that could have applied to the withdraw, and I had the money the next day. $100 to open any of their funds. People to talk to who really care. I will be staying with Schwab.
I was with Schwab, and changed to a cheaper broker (well known) but when I carefully watched my trades, I noticed that they always seemed to screw me out of a penny or two in price. They did not go to the cheapest place to buy the stock, but the one that gave them the biggest profit. I am now back with Schwab and couldn't be happier.
I have been very happy with Schwab since 1985. I trade a lot with just under $1 million in three accounts. Last year I accepted an offer from Merrill Edge for $750 cash bonus, plus 30 free trades per month and $6.95 per trade after that. After the three months with Merrill, I realized how good Schwab was. They have had a lot of changes over the years, but have always treated me with respect and been fair with me. They do not have the bizarre bugs with their trading that Merrill has. They also were happy to take me back with a special offer of their own.
While their 24/7 customer service (based in the U.S., incidentally) is staffed by very professional and congenial people, unfortunately, they are not very knowledgeable. Unless it is a website navigation issue, they invariably will place you on hold to research the problem and consult with colleagues tp come up with an answer. I have learned that these folks are basically new hire/trainee type finance majors who are learning as they go. This is laudable, but doesn't help the customer on the other end. I've been given wrong information several times, which had to be clarified at the local branch.
U.S. citizens who reside overseas can sign up for an international account with Charles Schwab. This is becoming increasingly important as many overseas banks, due to restrictions of FATCA and the IRS, are more and more often closing their doors to U.S. customers nowadays. They do require an initial minimum deposit of $10,000 but the trades still only cost $8.95 each (unless you need hand-holding or place the order by phone). After that, there is only the minimum $1,000 account balance that needs to be maintained.
I tried setting up an account with Scottrade, but even though I have a U.S. mailing address AND a U.S. bank account, they didn't want me because I have no PHYSICAL RESIDENCY and no employer in the USA. And I couldn't get past the initial online form on the ETrade website due to these things.
HORRIFIC CUSTOMER SERVICE, IF YOU HAVE A MILLION PLUS YOULL GET TREATED WELL OTHERWISE THEY DONT CARE ABOUT YOU
Whenever I contact Schwab with an issue, whether it be by phone or via the online chat, I get an answer within minutes.