Charles Schwab is a financial services company that operates through various subsidiaries to provide asset management, discount brokerage, banking, and advisory services. Its closest competitors in the discount brokerage sector include Fidelity, TD Ameritrade, E*TRADE and Interactive Brokers. Schwab's asset management and advisory services pit it against larger firms in the sector such as Goldman Sachs. It's mutual fund offerings are increasingly competitive on cost versus well-known players like Vanguard.
Key Takeaways
- Charles Schwab is one of America's largest financial firms focusing on individual investors.
- The company was one of the first to offer discount brokerage services
- Schwab offers a full range of financial services including and products, including ETFs and mutual funds.
- Schwab also provides advisory services and banking to individuals.
Charles Schwab: History and Financials
In its early days, Charles Schwab made a name for itself as one of the world's first and leading discount broker services, and this segment remains a large part of the company's business. The company continues to offer a full array of brokerage services through its subsidiary, Charles Schwab & Co. It also operates Schwab Bank, a federal savings bank in Reno, Nevada, which was established in 2003.
Schwab also manages its own line of mutual funds and exchange-traded funds (ETFs), all of which are available to its clients alongside third-party offerings. These funds can be purchased through any of the account types Schwab offers including full-feature brokerage accounts, individual retirement accounts (IRAs) or its 529 college savings accounts. Schwab serves customers over the phone, online or in any of its 365 physical branch offices.
Schwab expanded aggressively into asset management and investment advisory services. As of August 31, 2019 Schwab held $3.7 trillion in clients assets under management. It also has12.1 million active brokerage accounts, 1.7 million corporate retirement plan participants and 1.4 million banking accounts. In 2018, Schwab earned $4.5 billion in operating income on $10.99 billion in revenue.
On October 3, 2019, Schwab announced it will no longer charge trading commissions for stocks and ETFs in the U.S.
The company's closest competitors in the discount brokerage sector are Fidelity, E*TRADE and TD Ameritrade. On October 3, 2019, Schwab announced that it will no longer charge trading commissions for stocks and ETFs in the U.S., which accounted for $80-$100 million in annual revenue. E*TRADE, TD Ameritrade and Ally Financial followed suit.
Assets Under Management
Schwab also leads its competitors in total client assets under management(AUM). As of year-end 2018, Schwab managed over $3.25 trillion in client assets, while T. Rowe Price had only $1.03 trillion in client assets and TD Ameritrade $1.3 trillion in client assets under management.
Schwab's expansion into additional market sectors means it willface increasing competition from established larger players, including investment banking firms such as Goldman Sachs.
Goldman Sachs' market cap on October 1, 2019,was $73.3 billion, significantly more than Schwab's $50 billion during the same time period. At the same time however, for Q2 2018, Goldman Sachs had just over $1.54 trillion in assets under management, roughly half of Schwab's $3.25 trillion AUM. While Goldman doesn't offer discount brokerage services, it does compete with Schwab in banking and advisory services.
Mutual Funds and ETF's
Schwab clients have access to 175 commission-free ETF's and more than 3,500 OneSource mutual funds, which carry no loads and no transaction fees. By comparison, TD Ameritrade offers 296 commission-free ETF offerings and access to more than 11,000 mutual funds, of which nearly 2,000 carry no transaction fee and no load.Meanwhile, Fidelity offers more than 10,000 mutual funds, 3,375 of which have no transaction fee, and many of those have no load. Fidelity traders also have access to 84 commission-free ETFs. Ally Invest offers 8,095 mutual funds to new investors. Of those, 1,672 funds have no load.In addition, customers making 30 or more trades in a quarter get their trading commission knocked down to $3.95 for stock and ETF trades and just 50 cents for options contracts.
Schwab's ETF offerings are also very competitive in terms of management fee and expense ratios, with index funds matching or exceeding the likes of Vanguard and Fidelity.
Research
Through Schwab, customers gain access to free stock reports from Morningstar, S&P Capital IQ, Thomson Reuters, Credit Suisse, and others. Fidelity also offers a suite of research tools with high-quality research.But TD Ameritrade offers the largest selection of independent, third-party investment research from 13 total firms (Standard & Poor's, Morningstar, Jaywalk, TheStreet, etc.)
As for charting, Ally Invest's website boasts a great offering. Upper and lower technical indicators can be added to a chart, along with company events, such as splits, earnings, and dividends. Comparisons can be made to stocks, indexes, and commodities — a rare feature. Customers have their choice of graph styles, which include mountain, OHLC bars, and candlesticks.
Customer Service
Schwab customers can get support via an online chat system, phone, fax, or e-mail. The phone service is staffed 24 hours a day, 7 days a week, and the reps are typically well trained.
FAQs
Who is Schwab's biggest Competitor? ›
Its closest competitors in the discount brokerage sector include Fidelity, TD Ameritrade, E*TRADE and Interactive Brokers. Schwab's asset management and advisory services pit it against larger firms in the sector such as Goldman Sachs.
What is Charles Schwab's competitive advantage? ›Improving on its competitive advantage
The integration of the company's acquisitions and the improved efficiencies can keep Schwab on the winning track. The integrations enhance the company's competitive advantage, which should further boost profit margins, making Schwab a great long-term investment opportunity.
Schwab took an early lead in the industry, offering a combination of low prices and fast, efficient order executions, and soon became the nation's largest discount broker. Today, the company is the nation's largest publicly traded investment services firm, with around $7.4 trillion in client assets.
What are 3 facts about Charles Schwab? ›Charles Robert “Chuck” Schwab, Sr.
He pioneered discount sales of equity securities starting in 1975. His company became by far the largest discount securities dealer in the United States. He retired as CEO in 2008, but remains chairman and is the largest shareholder. Charles Robert Schwab, Sr.
After testing 15 of the best online brokers over six months, Fidelity (95.57%) is better than Charles Schwab (89.63%). Fidelity is a value-driven online broker offering $0 trades, industry-leading research, excellent trading tools, an easy-to-use mobile app, and comprehensive retirement services.
Who is the top investment company? ›- BlackRock. AUM: $9.464 trillion. ...
- The Vanguard Group. AUM: $8.4 trillion. ...
- UBS Group. AUM: $4.432 trillion. ...
- Fidelity. AUM: $4.23 trillion. ...
- State Street Global Advisors. AUM: $3.86 trillion. ...
- Morgan Stanley. AUM: $3.274 trillion. ...
- JPMorgan Chase. AUM: $2.996 trillion. ...
- Allianz. AUM: $2.953 trillion.
Charles Schwab Mission Statement
Our purpose is to champion every client's goals with passion and integrity, empowering them to take ownership of their financial future at every income level and life stage.
The Personal Touch. A major factor in Charles Schwab & Co.'s success has been a unique marketing strategy that features Charles Schwab's photo in most of the company's advertising. Schwab was a reluctant model, but as business grew, the photo provided a personal link between the company and it customers.
How did Charles Schwab make his company unique? ›With the May 1, 1975, deregulation of brokerage commissions, Chuck Schwab emerges as the de facto leader of a revolution. In a little more than a decade, his company defies conventional wisdom by opening nearly 100 branches, offering 24-hour quotes, and even exploring online services.
Why do you want to work for Charles Schwab? ›Schwab empowers you to build a significant career with purpose. Through development opportunities and learning programs, you can challenge yourself to stretch and grow your skills. We invest in your well-being and the communities in which we live and work—because when our people are at their best, so are we.
What type of business was Charles Schwab in? ›
Charles "Chuck" R. Schwab started the San Francisco–based The Charles Schwab Corporation in 1971 as a traditional brokerage company, and in 1974 became a pioneer in the discount brokerage business.
What is it like working at Charles Schwab? ›Charles Schwab has one of the best cultures in a corporate environment. People are respectful and kind for the most part, except for a few bad eggs. It's a fun and lively environment with lots of employee engagement events. The work can be interesting as well.
What is the biggest brokerage firm? ›Charles Schwab is the largest brokerage firm with over $7.6 trillion in assets under management (AUM).
How did Charles Schwab treat his workers? ›Not only did he treat his workers like people, and generally referred to them by name, he had some unique policies. A good example of this is via him marking a 6 on a board one day with chalk to signify the amount of work accomplished in front of the day shift.
What does Schwab mean? ›The surname Schwab was given to someone who lived in Swabia, a medieval dukedom that was in southwestern Germany. This is a regional name for a person who was form Swabia having derived from the Germanic word Schwaben, which means Swabian and is derived from the name of the Germanic tribe that inhabited this region.
What makes Charles Schwab different? ›Charles Schwab exists to help people achieve better financial outcomes. We offer investors a contemporary, full-service approach to build and manage their investments, providing investment-related products, services, and sophisticated financial planning that combine the best of what people and technology have to offer.
Who is better Edward Jones or Charles Schwab? ›...
Overall Rating.
| Overall Rating | 3.9 | 3.8 |
|---|---|---|
| Work/life balance | 3.9 | 3.7 |
| Compensation and benefits | 3.8 | 3.5 |
| Job security and advancement | 3.5 | 3.2 |
| Management | 3.5 | 3.4 |
Both brokers offer news and research on the app, but neither supports drawing tools for charting. The apps have identical ratings on the App store, but Fidelity has far more reviews: Schwab has 4.8 stars from about 565,000 reviews, while Fidelity has a 4.8-star rating from some 1.9 million reviews.
Who owns Charles Schwab? ›| The East Coast headquarters of the Charles Schwab Corporation at the CBS Building in New York City, 2018 | |
|---|---|
| AUM | US$8.14 trillion (2021) |
| Total assets | US$667.27 billion (2021) |
| Total equity | US$56.26 billion (2021) |
| Owner | Toronto-Dominion Bank (9.7%) Charles R. Schwab Sr. (6.6%) |
Warren Buffett is widely considered to be the most successful investor in history.
What is the best thing to invest money? ›
- Unit Linked Insurance Plan (ULIP) ...
- Public Provident Fund (PPF) ...
- Mutual Fund. ...
- Bank Fixed Deposits. ...
- National Pension Scheme (NPS) ...
- Senior Citizen Savings Scheme. ...
- Direct Equity. ...
- Real Estate Investment.
Merrill Edge is a likely winner for anyone who has an existing deposit or investment relationship with Bank of America, as connecting accounts can add a lot of convenience. On the other hand, Charles Schwab offers a lengthy list of mutual funds you can buy without paying a transaction fee on the trade.
What is personal value Charles Schwab? ›The combination of what you own (your assets) and what you owe (your liabilities) makes up your personal net worth. Knowing your net worth is important for two reasons: It lets you understand your current financial situation.
What products does Charles Schwab offer? ›- Mutual Funds. Access thousands of no-load, no-transaction-fee mutual funds at Schwab. ...
- Exchange-Traded Funds (ETFs) ...
- Money Market Funds. ...
- Stocks. ...
- International Stocks. ...
- Bonds and Fixed Income Products. ...
- Options. ...
- Futures.
Charles Schwab is our choice for best overall brokerage for beginners because it offers something for investors with virtually any investment need.
Does JP Morgan Chase own Charles Schwab? ›It is part of the Schwab Group, Inc. The Charles Schwab Bank offers a range of services.
Is Charles Schwab better than Robinhood? ›Charles Schwab is a more traditional brokerage firm that offers multiple account types and a solid mix of traditional asset classes to invest in. Robinhood offers fewer account types, caters to beginner investors, and allows crypto trading, but is missing some more traditional investments.
Where does Charles Schwab rank? ›Research and data: 4.5 out of 5 stars. Schwab provides its own equity ratings, along with reports from Morningstar, Credit Suisse, MarketEdge, Ned Davis and others.
How did Charles M Schwab transform the nation? ›18, 1939, New York City), entrepreneur of the early steel industry in the United States, who served as president of both the Carnegie Steel Company and United States Steel Corporation and later pioneered Bethlehem Steel into one of the nation's giant steel producers.
How did Charles Schwab make his fortune? ›He left U.S. Steel in 1903 to head up the Bethlehem Steel Company in Bethlehem, Pennsylvania. Schwab built Bethlehem Steel into the largest independent steel producer in the world. One of the key factors in Bethlehem Steel's success was the company's development of the H-beam – which preceded today's I-beam.
Is it hard to get hired at Charles Schwab? ›
It depends on the role and the stake holders involved in the selection process. It is highly competitive selection process. Be patient and leverage your opportunities to network. When i applied it took maybe 2-3 months to get an email saying theyd like to set up a phone interview.
How do I prepare for a Charles Schwab interview? ›- Past behavior predicts future behavior.
- Answer in S.T.A.R. format.
- Be specific, relevant, and recent.
- Know your 'why' and intention.
- Ask the necessary questions you need to feel good about pursuing an opportunity at Schwab.
Is Charles Schwab a good company to work for? Charles Schwab has an overall rating of 4.0 out of 5, based on over 4,368 reviews left anonymously by employees. 78% of employees would recommend working at Charles Schwab to a friend and 80% have a positive outlook for the business.
Who does Charles Schwab clear through? ›| Investment App | Clearinghouse |
|---|---|
| Robinhood | Clearing by Robinhood |
| Vanguard | Vanguard Brokerage Services |
| Webull | Apex Clearing |
| Charles Schwab | Charles Schwab & Co., Inc. |
Schwab and CSIM are registered as investment advisors with the SEC. Additionally, Schwab is regulated by the Commodities Futures Trading Commission (CFTC) with respect to the futures and commodities trading activities it conducts as an introducing broker.
Is Charles Schwab better than Goldman Sachs? ›Charles Schwab's brand is ranked #239 in the list of Global Top 1000 Brands, as rated by customers of Charles Schwab. Goldman Sachs's brand is ranked #145 in the list of Global Top 1000 Brands, as rated by customers of Goldman Sachs.