The IA 25 is listed in alphabetical order–there is no intended or implied ranking of its members. One person, however, holds a special place on the list for his past accomplishments and leadership today: Charles Schwab, who assumed again last year the position of CEO of his company. Editor Jamie Green spoke with Schwab by telephone on April 11.
Tell me about your goals for the company and Schwab Institutional. Our mission, our vision, is to be the ethical brokerage firm for the individual investor and their advisors.
I started out as an analyst and junior portfolio manager for an investment advisor–so my roots go back a long way in this business, and frankly, I was never really a traditional stockbroker. I look at the advisor business through great empathetic lenses–I’m proud of the fact that early on I realized that investors who wanted investment help wanted to get it from someone who preferably was independent of the transaction.
Would you talk about the competition? At a meeting last year in New York with journalists, when someone asked who you thought your competition was, you didn’t miss a beat and said, “Fidelity.” Fidelity is, frankly, one of our significant competitors, [and it's also] the most opaque company in the world, not subject to Sarbanes-Oxley or anything like that, so they can put out only the information that they want to put out, unlike us, who as a public company are in a glass box. They have vulnerabilities because they rely on a suite of funds [with an] average OER [operating expense ratio] of about 128 basis points,