An hour with Chuck

Spend an hour with Chuck Schwab and you might as well call it a Masterclass—and then some—on the value of hard work, pioneering courage, entrepreneurialism, innovation, and business ethics…and we’d run out of room in this paragraph if we kept going.

It’s no wonder that he was greeted by a packed house of “Schwabbies” in a recent town hall at the company’s Westlake headquarters, sharing his wisdom in a Q&A facilitated by Charles Schwab President Rick Wurster.

Chuck was his usual self—unassuming and down-to-earth, quick to thank the thousands present (both in person and via video simulcast) and those who came before them for the parts they've played in serving the firm’s clients. Because, as Chuck noted, that’s been the focus of the company over its 50-plus years of existence.

“We never measured anything based on making money. That was important, but the real measure was knowing and doing what a customer liked, and what was good for them, not us,” he said.

It’s no wonder this was the man who, in the mid-1970s, did what others considered impractical and naïve: make the commission structure of the day passé and invite millions of Americans to participate in the “great growth of their country,” as he calls it. Instead of excessive costs, excessive selling, and hype, he cut trading commissions, stayed open beyond “bankers hours,” paid his brokers salaries instead of sales commissions, put investors at the forefront, and by extension, made the markets more accessible and financial freedom more attainable for everyday Americans.

As far as truisms go, the one about hard work paying off is as true as it gets.

Working the railroad switchyards of Chicago and hauling pipe in oil fields during a recession teaches a person a thing or two, Chuck told the audience. He learned the value of a buck to be sure, but it was also the kind of hard work that inspired an interest in and respect for economics and its positive power. Soon enough he was helping to write a newsletter for an investment advisory firm, and fast forward a few years, opening the doors of his own firm with a singular commitment to put investors first.

Fifty-plus years later, the self-described optimist acknowledged to the audience that he never could have really envisioned what kind of company his namesake would become.

“Early on, a good day for us was 80 trades,” Chuck said, describing the conveyor belt approach to executing a trade—a system he admits was tedious compared to today’s technology. “Now it’s six million,” he added with wide-eyed disbelief.

Indeed, together with 35 million client accounts and $8.5 trillion in client assets, it’s safe to say the early naysayers were incorrect in their initial predictions about the kind of company this humblest of founders set out to make.   

Still, when asked what’s to come in the next five years, Chuck deferred to what he and the thousands watching have shown to be a proven model.

“It’s hard to see huge change. Some products may change, artificial intelligence surely will have some benefit. Efficiency will reduce some of our costs. What I do know is that financial services will remain essential in a free market system. And we’ll continue to stand on the side of investors.”