Charles Schwab Case Study

Charles Schwab was incorporated as a brokerage firm in 1971 in California. A defining moment for the firm came in 1975, when the government deregulated brokerage commissions. Charles Schwab took advantage of the deregulation by focusing on providing informed investors with low-cost access to security transactions.

From the beginning, Schwab invested heavily in technology as a way to lower cost. In 1985, Schwab was one of the first firms to recognize that the personal computer could be used as a distribution channel for financial services. In the late 1980’s and 1990’s, Schwab developed several technology based services that would become central components of its business. These technologies include, the TeleBroker, which is a fully automated telephone system that allowed customers to retrieve real-time stock quotes and place orders. The Schwab Link provided fee-based advisors with back-office custodial services. In addition, Schwab started Advisor Source, a referral servic...