Charles Schwab Case Study

The Charles Schwab Corporation provides securities brokerage and related financial services for 8 million active accounts with about 837 billion dollars in assets. They are financial planners that assist corporations with mergers and acauisitions and help people plan their financial futures. Their brokers make commission on their clients and well as fees they charge.

Charles Schwab was a Stanford graduate attaining his bachelors and masters degree at their school of business. Charles was thirty two years old when he started his first endeavor which was a mutual fund. He eventually lost this due to a court case and being $100,000 dollars in debt. He then started Charles Schwab & Company and was one of the first brokerages to get rid of rid of mandatory fixed commissions on stock trades. This started the discount brokerage business. He decided that instead of paying his brokers on commission that he would pay them a salary and bonuses based on their performance. Ever since Charles Schwab has been on the cutting edge of technology as well as giving his customers the best service possible.

Although they had a positive new outlook on investing there were threats to their business. Electronic trading services offered extremely low rates for trading and therefore threatened the livelihood of the company. To combat this Schwab developed a separate entity called Eschwab in which they too offered cheap online investing. It soon came apparent that it would be better that the two companies were recognized as one. Moves like this have kept Schwab as a leader in online and broker investing while maintaining good customer service and reasonable rates.