Chuck Schwab, founder and chairman, Charles Schwab & Co., shown here in 1971 at his desk at First Commander.
Fifty years ago this month, Chuck Schwab and a handful of partners launched the predecessor to Charles Schwab & Co., Inc. First Commander Corporation began as a small investment company offering traditional brokerage services and an investment newsletter that reached 3,000 subscribers at its height.
It was a tough time for such a business though. The economy was struggling and so too was First Commander. Chuck’s partners wanted out. So, in 1973, having bought out his partners and carrying a six-figure debt, Chuck forged his own path forward and changed the company’s name to Charles Schwab & Co., Inc. It was a company that would go on to transform investing.
I knew instinctively that individual investors needed a better deal, that they were getting a raw deal from Wall Street. I certainly knew in my mind that we had a great business opportunity ahead of us.
- Chuck Schwab, founder and chairman, Charles Schwab & Co.
What Chuck didn’t yet know was that his company would help lead a revolution, changing the way people would invest following the deregulation of brokerage commissions on May 1, 1975, a day known in the industry as May Day.
After learning that Merrill Lynch raised their rates following May Day, Chuck recalls “I was very happy that day because I would've thought that Merrill would've dropped their rates substantially and we would've had no business. But we dropped our rates 50 percent, 60 percent, something like that, and it just created a huge opportunity for us to take our little business and grow it like crazy.”
At its start, Chuck’s little company was doing 50 trades a day. “Fifty,” he laughs. “All by hand with a pen and a pad.” Today, Charles Schwab & Co., Inc., is one of the largest wealth management firms in the United States with 8.4 million daily average trades, more than $7 trillion in assets, and 31.9 million brokerage accounts—all managed by a workforce of 32,000 employees,* proudly referred to as ‘Schwabbies.’
Still, Chuck explains, it’s not about being the biggest.
It’s about being the strongest. An unbelievable fortress of a company with the highest level of integrity. That’s what you want to deal with. That’s what we want to offer. That’s who we are.
- Chuck Schwab, founder and chairman, Charles Schwab & Co.
More from Charles Schwab
Invested Together: Reflections on IMPACT 2024
Setting the standard for retail trading one year after launching Schwab Trading Powered by Ameritrade
