Charles Schwab at a Glance


  • "Highly intelligent, quality people"


  • Low morale due to layoffs

The Buzz

  • "Bottom of the barrel"
  • "Fantastic technology"
  • "Past its prime"
  • "Growing, strong platform"

About Charles Schwab

Charles Schwab's seven million individual and institutional clients know who to call when they have questions.  Charles Schwab is an industry giant, was one of the first to offer its services online, and is also available by telephone, wireless devices and via 300 offices across the U.S.  The company oversees more than 6.8 million client brokerage accounts, 535,000 corporate retirement plan participants and 181,000 banking accounts.  And Charles Schwab Investment Management, a division of Charles Schwab, has about $236 billion in assets under management as of December 2008.  

Charles (Chuck) Schwab founded his firm after the U.S. Securities and Exchange Commission deregulated the fees that brokers charged to trade stocks in 1974.  While most brokerage houses took the SEC's decision to outlaw fixed commissions to raise their transaction fees, Charles Schwab decided to gain market share in the investment world by creating a new, unconventional kind of brokerage that made stock trading affordable for ordinary individuals.

Today, the San Francisco-based firm continues to market itself as an everyman's brokerage house that is affordable and reliable, but it has added some traditional brokerage services to its portfolio along the way.  Its Schwab Investor Services segment provides retail brokerage servicesâ€"including asset management, retirement and college savings accountsâ€"banking services, which includes mortgages, home equity lines of credit and certificates of deposit (CDs).  The Schwab institutional segment offers trading and support services to independent investment advisers.  Charles Schwab also had two subsidiaries, its asset management arm, U.S. Trust, and the direct access broker CyberTrader, which offers integrated web and software-based trading platforms.

In 1983, Bank of America bought Charles Schwab for $57 million, only to sell it back for $280 million four years later.  The company, which had grown its customer base by one million clients while under Bank of America's watch, subsequently went public in a $132 million initial public offering.

From there, business Charles Schwab took off, amassing $100 billion in client assets by 1994.  In 1996, the company became one of the first to offer its services online, finding the middle ground between discount brokers like E*Trade and full-service companies like Merrill Lynch.  Low fees and an accessible online-trading platform quickly made Charles Schwab one of the biggest names in online banking at a time when everyone was rushing to stake out real estate in the dot-com gold rush.

By 1997, Chuck's web site won the title "King of Online Brokers" from Forbes magazine, going on to win further accolades throughout the early dot-com years from the Gomez Internet brokerage rankings as the best overall online broker.  Within two years of launching the Charles Schwab web site, the firm had attracted two million online accounts, earning praise from big league market-watchers like Worth, Fortune, and BusinessWeek, which ranked Charles Schwab on their lists of Top Brokerages, Best Places to Work, Most-Admired and Best-Managed Companies.

But, like almost every company that made their fortunes on the Internet in the late 1990s, Charles Schwab took a devastating hit when the dot-com bubble burst in 2001.  From 2000 to 2004, the company lost millions of dollars and had to downsize its employee headcount by over 33 percent as share-trading volume tanked.  In 2000, Schwab reported operating income of $718 million. A year later, that figure dropped to $199 million and, in 2002, Schwab's income fell even further to $109 million. Wall Street took note.  In March 2000, Charles Schwab's shares were worth $64.94, but by 2003, they were listed at $6.56, never to recover their pre-dot-com strength. 

The company needed a plan to stem Charles Schwab's financial bleeding.  David Pottruck, a 20-year Schwab veteran who had taken the reigns as chief executive 2002 after sharing that job for five years with "Chuck," implemented an aggressive turnaround strategy.  It began by instituting higher trading fees, abandoning the signature "average Joe" discounts that made Charles Schwab a household name.  Then, in an effort to attract higher-end customers, Pottruck looked to expand Charles Schwab's service offerings through a series of acquisitions.  In 2000, Charles Schwab bought New York-based U.S. Trust, a money management firm that provided investment management, private banking, and trust services, as well as tax, estate and financial planning for white-collar clients across the country.  Then in 2003, U.S. Trust paid $365 million to acquire State Street Corporation's private asset management group, whose client base hailed from the upper crust of New England's elite.

Along with his acquisition strategy, Pottruck's plan included shedding Charles Schwab of its European operations and its 50 percent stake in Glasgow-based stockbroker Aitken Campbell, which closed its doors in 2005.  Pottruck also oversaw the founding of the Charles Schwab Bank in spring 2003.

Charles Schwab's board was none too happy with the changes, which did little to brighten the company's prospects.  The new ventures were operational failures and were a drain on the company's resources.  Pottruck knew that his unsuccessful plan put his job at risk and, sure enough, in July 2004, the company's board of directors showed him the door.  In his stead, the board reinstituted Chuck Schwab as chief executive.

Back at the helm of his namesake company, Chuck brought Charles Schwab back to basics.  On Pottruck's watch, the company had steadily lost clients to lowâ€"commission online brokers like E*Trade and Ameritrade, a market that Charles Schwab once dominated.  Schwab looked to shed those businesses that weren't profitable and to reenter the discount brokerage world.  He began by offering steep trading discounts and cutting overhead costs.  As part of that plan, the company sold SoundView Capital Markets for $265 million to UBS in 2004, less than a year after buying it for $340 million.


Charles Schwab & Co., Inc. is an equal opportunity and affirmative action employer committed to diversifying its workforce.  It is Schwab's policy to provide equal employment opportunities to all employees and applicants without regard to race, color, religion, sex  (including pregnancy, childbirth, breastfeeding, or related medical conditions), gender identity or expression,  national origin, ancestry, age, disability, legally protected medical condition, genetic information, marital status, sexual orientation, protected veteran status, military status, citizenship status or any other status that is protected by law. 

- Show Less + Show Full Description

Charles Schwab

101 Montgomery Street
San Francisco, CA 94104
Phone: (415) 627-7000
Fax: (415) 636-5970


  • Employer Type: Public
  • Stock Symbol: SCH
  • Stock Exchange: NYSE
  • Chairman & CEO: Charles R. Schwab
  • 2006 Employees: 14,300

Major Office Locations

  • Phoenix, AZ
  • San Francisco, CA
  • Denver, CO
  • Indianapolis, IN

Key Financials

  • 2006 Revenue: $4,980 million