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Princeton University In 1963,
Charles R. Schwab and two other partners launched
Investment Indicator, an investment newsletter. At its height, the newsletter had 3,000 subscribers, each paying $84 a year to subscribe. In April 1971, the firm was incorporated in California as First Commander Corporation, a wholly owned subsidiary of Commander Industries, Inc., for traditional brokerage services and to publish the Schwab investment newsletter. In November of that year, Schwab and four others purchased all the stock from Commander Industries, Inc., and in 1972, Schwab bought all the stock from what was once Commander Industries. In 1973, the company name changed to Charles Schwab & Co., Inc. Following the
U.S. Securities and Exchange Commission's 1975 decision to allow negotiated commission rates, Schwab established a discount
stock brokerage, opening its first branch in Sacramento that same year. The firm began offering client seminars in 1977. In 1978, Schwab had 45,000 client accounts total, doubling to 84,000 the next year. In 1979, Schwab risked $500,000 on a back-office settlement system called BETA (short for Brokerage Execution and Transaction Analysis), enabling Schwab to become the first discount broker to bring automation in house. In 1980, Schwab established the industry's first 24-hour quotation service, and the total of client accounts grew to 147,000. In 1981, Schwab became a member of the
NYSE, and the total of client accounts grew to 222,000. In 1982, Schwab became the first to offer 24/7 order entry and quote service, its first international office was opened in Hong Kong, and the number of client accounts totaled 374,000.
Acquisition by Bank of America and return to independence In 1983,
Bank of America acquired Charles Schwab for $55 million. In 1984, the company launched 140 no-load
mutual funds. In 1987, management, including Charles R. Schwab, bought the company back from Bank of America for $280 million. In 1991, the company acquired Mayer & Schweitzer, a
market making firm, allowing Schwab to execute its customers' orders without sending them to an exchange. In 1997, it was fined $200,000 for failing to arrange the best trades for its customers. The unit was renamed Schwab Capital Markets in 2000. In 1993, the company opened an office in
London. The following year in 1996, they launched Web trading, letting customers trade listed and OTC stocks and check balances and order statuses on their website. Dissatisfied with its in-house design, the company hired
Razorfish to overhaul the site. This redesign later appeared in the Cooper-Hewitt Museum's inaugural National Design Triennial. In 2000, Schwab purchased
U.S. Trust for $2.73 billion. Less than a year later, U.S. Trust was fined $10 million for violating bank secrecy laws. It was ordered to pay $5 million to the New York State Banking Department and $5 million to the Federal Reserve Board. On November 20, 2006, Schwab announced agreed to sell U.S. Trust to
Bank of America for $3.3 billion in cash. The deal closed in the second quarter of 2007. In January 2004, Schwab acquired
SoundView Technology Group for $345 million to add
equity research capabilities. David S. Pottruck, who had spent the majority of his 20 years at the brokerage as Charles R. Schwab's right-hand man, shared the CEO title with the company's founder from 1998 to 2003. In May 2003, Mr. Schwab stepped down, and gave Pottruck sole control as CEO. On July 24, 2004, the company's board fired Pottruck, replacing him with its founder and namesake. News of Pottruck's removal came as the firm had announced that overall profit had dropped 10%, to $113 million, for the second quarter, driven largely by a 26% decline in revenue from customer stock trading. After coming back into control, Mr. Schwab conceded that the company had "lost touch with our heritage", and quickly refocused the business on providing financial advice to individual investors. He also rolled back Pottruck's fee hikes. The company rebounded, and earnings began to turn around in 2005, as did the stock. The share price was up as high as 151% since Pottruck's removal, ten times since the return of Charles Schwab. The company's net transfer assets, or assets that come from other firms, quadrupled from 2004 to 2008. Schwab's YieldPlus fund drew controversy during the
2008 financial crisis because of its -31.7% return. Investors in the Schwab YieldPlus Fund, including Charles Schwab himself, lost $1.1 billion. Schwab closed the YieldPlus funds in 2011. In April 2007, the company acquired The 401(k) Company.
Switch to NASDAQ On December 15, 2005, Charles Schwab announced that it would transition from a dual listing on both the New York Stock Exchange and the NASDAQ to exclusively listing its common stock on the NASDAQ and change its symbol from "SCH" to "SCHW" starting December 20, 2005 at the stock market open. On July 22, 2008, Walter W. Bettinger, the previous
chief operating officer, was named chief executive, succeeding the company's namesake. Charles R. Schwab remained
executive chairman of the company and said that he would "continue to serve as a very active chairman". In 2011, the company acquired OptionsXpress. The company also acquired Compliance11, Inc., a provider of compliance software. In 2012, it acquired ThomasPartners, an
asset management firm. On July 1, 2020, the company acquired Wasmer, Schroeder & Company, an independent investment manager of fixed income in separately managed accounts with $10.7 billion in assets under management. On May 26, 2020, the company acquired
USAA's investment management accounts for $1.8 billion in cash. In June 2020, the company began allowing investors to purchase fractional shares of companies listed on the
S&P 500 index.
Stock Slices On May 5, 2020, the company announced “Stock Slices,” which allows investors to buy fractional shares of leading companies. This allows investors the ability to build a portfolio of stocks with less than the funds required to purchase full shares.
Acquisition of TD Ameritrade On October 6, 2020, the company acquired
TD Ameritrade. As part of the acquisition,
Toronto-Dominion Bank acquired around a 12% stake in the company. Soon after, Schwab began the process of transitioning TD Ameritrade accounts to Charles Schwab; once this was finished, TD Ameritrade was shut down in May 2024. In early 2025, TD Bank sold its stake in Schwab. Effective on January 1, 2021, the company moved its headquarters from San Francisco, California to
Westlake, Texas. On January 1, 2025, Rick Wurster assumed the CEO position of the company, replacing the retiring Walt Bettinger. == Senior leadership ==