Schwab's Investment Management: What You Need To Know

For over 40 years, The Charles Schwab Corporation has been an advocate for individual investors and the financial professionals who serve them. The company has pioneered many industry firsts, such as 24/7 order entry and quote services, Mutual Fund MarketPlace, and Schwab Intelligent Portfolios, to make investing more accessible and affordable for its clients. With more than 100 funds and over $1 trillion in assets under management, Schwab offers a comprehensive range of investment products, including stocks, exchange-traded funds (ETFs), mutual funds, and options. The company's history is marked by a commitment to challenging the status quo and creating value for investors through innovative products, services, advice, and education.

Schwab's investment products

Charles Schwab offers a wide range of investment products and services to help individuals manage their own investments. The company provides a full suite of tools, resources, and support to make the investment process more accessible.

For those new to investing, Schwab offers educational resources and straightforward information to help individuals get started. They provide basic investing concepts, such as asset allocation and diversification strategies, to help individuals determine their risk tolerance and potential for growth.

Schwab also offers a range of investment vehicles, including shares of stock, bonds, cash investments, and mutual funds. They provide resources to help individuals choose the right investment vehicle based on their goals and risk tolerance.

Additionally, Schwab provides tools like the Schwab Personalized Portfolio Builder, research screeners, and the fund finder tool to help individuals build and manage their investment portfolios. The company also offers 24/7 live support and access to specialized support teams for various investment types.

With a focus on delivering low prices, Schwab offers some of the lowest pricing in the industry for investment products and trading platforms. They provide powerful yet easy-to-use platforms, such as the thinkorswim® suite, to make trading more accessible and streamlined for their clients.

Self-directed investing

However, self-directed investing can be highly time-consuming as it requires regular portfolio management and research to identify investment opportunities. It can also be stressful, especially during volatile market conditions, as there is no safety net or second opinion to fall back on. Additionally, the risk may be higher, especially when utilizing higher-risk securities and derivatives.

Charles Schwab offers a range of tools, resources, and support for self-directed investors, including the Schwab Personalized Portfolio Builder tool, research screeners, and the Schwab Investing Themes approach. They also provide educational resources, expert insights, and 24/7 support through various channels.

The company's history

The Charles Schwab Corporation was founded in 1971 by Charles R. "Chuck" Schwab in San Francisco, California, as a traditional brokerage company. In 1973, the company name changed to Charles Schwab & Co., Inc. In 1974, the Securities and Exchange Commission (SEC) mandated a 13-month trial period for the deregulation of certain brokerage transactions, and in 1975, the SEC mandated negotiated commission rates for all securities transactions. This allowed Schwab to pioneer discount sales of equity securities, creating a new kind of brokerage—a discount brokerage.

In 1975, Schwab opened its first branch in Sacramento, California, and in 1977, it opened an office in Seattle—its first branch outside of California. By 1978, Schwab had 45,000 client accounts, which doubled to 84,000 in 1979. In 1979, Schwab invested in the BETA mainframe system, an automated transaction and record-keeping system, enabling the company to become the first discount broker to bring automation in-house.

In 1980, Schwab established the industry's first 24-hour quotation service, and in 1981, it became a member of the New York Stock Exchange (NYSE). In 1982, Schwab was the first to offer 24/7 order entry and quote services, and it opened its first international office in Hong Kong. In 1983, the company was acquired by Bank of America for $55 million. In 1984, it 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 1993, Charles Schwab Limited opened its first office in London. In 1995, the company acquired The Hampton Company, founded by Walter W. Bettinger, who became CEO of Schwab in 2008.

In 1996, Web trading went live, allowing customers to trade listed and over-the-counter (OTC) stocks, or check balances and order status on the schwab.com website. In 1998, the company hired interactive firm Razorfish to redesign the website, which was later entered in the Cooper-Hewitt Museum's inaugural National Design Triennial. In 2000, Schwab purchased U.S. Trust for $2.73 billion, and in 2001, the U.S. Trust subsidiary was fined $10 million in a bank secrecy law case. Later that year, Schwab announced an agreement to sell U.S. Trust to Bank of America for $3.3 billion.

In 2004, Schwab acquired SoundView Technology Group for $345 million to add equity research capabilities. In 2005, Schwab eliminated account service and order-handling fees for retail accounts and small business retirement plans. That same year, the company launched a new ad campaign: "Talk To Chuck". In 2006, Schwab lowered and simplified pricing for equity, option, mutual fund, and bond transactions.

In 2007, the corporation completed the acquisition of The 401(k) Company, a retirement plan provider. In 2008, with the markets in crisis, the company focused on innovating on behalf of its clients. Schwab went mobile and to the cloud, exchange-traded funds (ETFs) became popular, and money management capabilities grew. By the end of 2012, client assets had grown to $2 trillion.

In 2011, the company acquired OptionsXpress and Compliance11, Inc., a provider of compliance software. In 2012, it acquired ThomasPartners, an asset management firm. In 2020, Charles Schwab and TD Ameritrade became one combined company, and Schwab announced plans to integrate the thinkorswim® and thinkpipes® trading platforms into its trader offerings. In 2021, Charles Schwab expanded its diversity and inclusion efforts with four new programs in the areas of financial literacy, college scholarships, employee mentorship, and meeting the needs of Black investors.

Retirement plans

Charles Schwab offers a range of retirement planning services to help individuals save for retirement and prepare for their post-retirement expenses. They provide tools and resources to make informed investment decisions and manage their finances effectively.

Retirement Plan Services:

Schwab's Retirement Plan Services offer a flexible approach to designing retirement plans, allowing individuals to maximize their savings outcomes. They can choose comprehensive, integrated retirement plan services or select individual services to pair with their existing independent plan provider. Schwab acts as a record-keeper, streamlines plan administration, and provides holistic support to employees' financial lives.

Workplace 401(k) Services:

Schwab offers comprehensive workplace 401(k) services, enabling employers to design retirement plans that attract and retain top talent. These services can be paired with independent providers, combining industry expertise with personalized service. They also support various retirement plans, including employee stock ownership plans (ESOPs), profit-sharing plans, and money purchase plans.

Interactive Tools and Resources:

Schwab provides interactive tools, such as calculators, to help individuals understand their finances and make informed decisions about their retirement. They offer a Pre-Retirement Playbook, a step-by-step guide to help individuals prepare for retirement, including building a budget and planning for their dream retirement.

Investment Options:

Schwab offers a wide range of investment choices for retirement plans, including money market funds, bonds, mutual funds, and Exchange-Traded Funds (ETFs). They provide access to thousands of no-load, no-transaction-fee mutual funds and over 2,000 listed ETFs with $0 online commissions across a range of asset classes.

Education and Support:

Schwab provides educational resources and timely expert perspectives to help individuals make informed decisions about their retirement investments. They offer courses, articles, videos, and podcasts on investing, trading, and personal finance. Schwab also offers 24/7 live support, with specialized teams for fixed income, options, and futures questions, ensuring individuals can get the assistance they need whenever they need it.

Wealth and investment management solutions

• Tools for Investing and Trading: Schwab offers a range of tools to help you manage your investments, including watchlists, alerts, and the All-In-One Trade Ticket®. You can also access robust tools and research on Schwab.com and stay on top of the markets and your accounts with the Schwab Mobile apps.
• Diversified Portfolio: You can build a diversified portfolio of ETFs or mutual funds using Schwab's asset allocation models, which range from conservative to aggressive.
• Retirement and College Savings Calculators: These calculators help you plan for key financial milestones and understand how much you need to save for retirement or college.
• Research and Screeners: Schwab provides screeners for ETF, mutual fund, and stock investments, allowing you to identify trade opportunities based on predefined strategies or your own custom criteria. You can also access Idea Hub® for options trading ideas and the Strategy Screener for actionable ideas that fit your strategy.
• Advanced Trading Platform: Schwab offers an innovative and customizable advanced trading platform, along with platforms, education, and support designed specifically for active traders.
• Performance Tracking: You can easily track your investment performance and compare your allocation to benchmarks using the tools provided by Schwab.
• Low Costs: Schwab is committed to delivering low prices and offers some of the lowest pricing in the industry for mutual funds, bonds, and futures.
• Education and Support: Schwab provides best-in-class education, including courses, articles, videos, and podcasts, combined with timely market commentary and perspectives from Schwab experts. Additionally, you can connect with knowledgeable support teams 24/7/365 and access over 400 physical branches.

With these comprehensive wealth and investment management solutions, you can take control of your investing journey and make informed decisions with confidence.

Frequently asked questions