Charles R. Schwab has no plans to give his job as CEO of Charles Schwab & Co., a post he assumed this summer after the Schwab board “lost confidence” in co-CEO David Pottruck, though in an interview on Oct. 5 Schwab said he would have “no problem” if the Schwab board named someone else to take over as chairman.
Schwab spoke to reporters one day after the company announced price cuts for its base online equity trade commissions to $19.95 from $29.95 (for the first 1,000 shares traded, bringing its retail prices into line with price cuts it announced in June for trades made through its affiliated advisors), and one day before the company rolled out a new national advertising campaign that showcases Schwab himself as the public face of the company he founded thirty years ago in an attempt to “reconnect with the client base” directly.
Schwab was optimistic about his company’s present and future, though he admitted that the firm had priced its services “higher than it should have,” especially coming out of the bull market. He said the company was well “on a path” to reducing overall corporate costs by 20% as part of its plan to increase its margins and market share. Schwab has about $1 trillion in assets, he said, or a 6% market share of the $17 trillion of investable assets held by U.S. households; he wants to get that share to 8% or 9%. Responding to some speculation that Schwab might sell its U.S. Trust unit, he said the company has no intention of selling the company.
As for advisors, Schwab noted that a reorganization that left Schwab Services for Investment Managers’ president Deborah McWhinney reporting directly to him reflected the importance of the advisor channel to Schwab’s fortunes–”Deb has done a great job,” he said–but also was part of his move to “flatten” the management structure of the company.