Outstanding Achievement: Charles R. Schwab
From the get-go, Charles R. Schwab set out to take on Wall Street’s clubby brokerage industry, and he…
From the get-go, Charles R. Schwab set out to take on Wall Street’s clubby brokerage industry, and he has stayed true to his mission since founding his eponymous company in 1973.
He did away with the bread and butter of brokers – commissions, front-end loads, markups and fees – and based his business model on discount per-trade fees.
Other innovations followed, including a mutual fund supermarket and the headlong embrace of technology, which made the company a leader in online discount stock trading.
But Mr. Schwab didn’t stop there.
His company has slowly but steadily embraced financial planning, without stampeding the thousands of independent advisers who use his firm. And he engineered the June 2000 acquisition of U.S. Trust Corp. in New York to crack the high-net-worth market.
Along the way, Mr. Schwab didn’t hesitate to challenge the industry’s heavy hitters. He took on Advent Software Inc. in San Francisco when it appeared to be on the verge of monopolizing the high-end-adviser market for desktop asset-management applications.
His firm remained squeaky clean through a season of Wall Street scandals, and his company’s “let’s put some lipstick on this pig” advertising campaign tweaked the big boys where it hurt most – their egos.
Mr. Schwab proved he could be influential on public policy as well. He is widely credited with suggesting a cut in dividend taxes to President Bush during Mr. Bush’s Waco, Texas, economic summit last August. The president has strongly embraced the idea.
Charles Schwab & Co. Inc. routinely makes Fortune’s list of 100 best companies to work for, and Mr. Schwab appeared genuinely distressed when the company was forced to lay off employees.
While he has been the standout in the financial services industry during the past five years, there have been other winners – and not a few losers.
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