Charles Schwab's Cause

"To be the most ethical and useful financial services company in the world."

 

 

 "I can't overemphasize that we have the right kind of client-relationship people who really have the interests of the client at hand first not second, but first. We are willing to risk short-term revenue to do the right thing for the customer and ensure long-term success."

~ Charles R. Schwab

 

 

Main source of data:

"Charles Schwab," John Kador

1963 Charles Schwab and two other partners launch Investment Indicator, an investment advisory newsletter. At its height, the newsletter has 3000 subscribers, each paying $84 per year to subscribe.

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1971 Charles establishes First Commander Corp., a traditional brokerage, with $100,000 borrowed from his entrepreneurial uncle, Bill Schwab.

1973 Charles buys out his other partners, assuming all of the company's debt. He changes First Commander's name to Charles Schwab & Co., Inc.

1974 The SEC mandates a 13-month trial period for the deregulation of certain brokerage transactions. While many brokerages take the opportunity to raise commissions, Charles seizes the opportunity to create a new kind of brokerage, a discount broker and pitchman is born.

1975 On May 1, the SEC officially approves "negotiated" commissions, marking the birth of the discount brokerage industry. The Pacific Coast Stock Exchange approves Schwab's membership. Schwab opens a Sacramento office its first branch outside of San Francisco.

1976 First ads feature Charles in shirt-sleeves: the Schwab brand is born. Early foray into high-tech innovation: Bunker Ramo System 7, begins delivering stock quotes to customers. Options Clearing Corp. membership approved. First branch opens. By 1979 it brags of 33,000 customers.

1980 Schwab introduces 24-hour weekday quote service. Adopts tagline: "America's largest discount brokerage." Branches: 23

1980 Schwab touts his service, discounts and "state of the art computer system."

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1981 In first big merger among discounters, Schwab acquires Kingsley, Boye and Southwood. Also acquires Letterman Transaction Services and Ridgeway. Becomes member of the New York Stock Exchange. Opens first office in Manhattan.

1983 Bank of America officially acquires Schwab for $57 million. Company opens up 500,000th customer account.

1984 Launches Mutual Fund MarketPlace with 140 no-load funds as well as three new online products: SchwabQuotes, Financial Independence and The Equalizer a DOS-based application that would point the way toward an online future. David Pottruck joins the firm as EVP of Marketing and Advertising.

1985 Introduces Equalizer online investing software and SchwabQuotes touch-tone quote system. Launches standalone Financial Independence software for managing personal finances on the PC.

1986 Abandons Financial Independence product for lack of fit with core brokerage business.

1987 Completes management-led buyback from Bank of America for $280 million. In September, The Charles Schwab Corporation (the parent corporation) completes IPO of eight million shares at $16.50. In October, the stock market crashes, exposing Schwab to critical margin exposure.

1988 Advisor Source, partnership with independent investment advisors takes off. The early day-traders: a 900 number hawks news and tips to trading junkies.

1989 Telebroker replaces Schwab Quotes; introduces touch-tone trading and quote system.

1990 Opens Indianapolis call center.

1991 Acquires Mayer & Schweitzer, one of nation's premier OTC market makers, now known as Schwab Capital Markets LP. Introduces Schwab 1000 Index Fund, along with Schwab U.S. Government Bond Fund. Opens call center in Denver. Holds its first national conference for independent investment managers. Launches first network television advertising campaign. Branches: 158

1992 Introduces no-transaction fee Mutual Fund OneSource service. Adds Schwab California and National Tax-Free Bond Funds. Opens call center in Phoenix. The Charles Schwab Corporation establishes Charles Schwab Trust Company. Opens Latin American Center in Miami. Surpasses two million active investor accounts.

1993 StreetSmart online trading system replaces Equalizer.

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1994 Schwab reaches $1 billion in revenues and $100 billion in customer assets. Decentralization of the company into nine customer enterprises.

1995 Schwab commits to moving enterprise to Electronic Brokerage

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1996 Internet trading launched. Company introduces e.Schwab. You want some advice? Schwab pitches Select List, its top mutual fund picks.

1997 The Charles Schwab Corporation (SCH) is added to S&P 500 Index. E.Schwab and Schwab retail merge back together, one price for Web trades. Opens one-millionth online account. Creates Charles Schwab Europe as well as subsidiaries in Hong Kong and Cayman Islands. Forms alliance with CS/First Boston, J.P. Morgan and Chase H&Q to give Schwab customers access to IPOs. David Pottruck is named Co-CEO. Introduces Mutual Fund Report Cards and $29.95 commission for online equity trades up to 1000 shares. Branches: 272

1998 Giant on the Web. Schwab passes Merrill Lynch in total Stock Market capitalization. Schwab hits 1.8 million online accounts. Full-service firms firms play catch-up with me-too offerings.

1999 The former discounter goes upscale with U.S. Trust. Preaches asset allocation, diversification and other investing. Reaches over $700 billion in assets; almost $4 billion in revenues.

2000 Schwab reaches $1 trillion in assets. Acquires Cybercorp (later renamed CyberTrader). Enters into global financial services alliance with AOL Time Warner. Branches: 384.

2001 Dotcom meltdown forces Schwab into major layoffs and examination of its transaction-based Business Model Download PowerPoint presentation, pdf e-book.

2002 Further consolidation forces shut down of Schwab operations in Australia and Japan.

2004 The Group operates 236 domestic branch offices in 43 states. On 16-Jan-2004, the Group acquired SoundView Technology Group, Inc. On 29-Oct-2004 the Group sold its Capital Market business to UBS.

2011 The company serves 7.9 million client brokerage accounts, with $1.65 trillion in assets, from over 300 offices in the U.S, one office in Puerto Rico, and one branch in London.

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