Charles R. Schwab started in 1963 with partners publishing the Investment Indicator, a newsletter that cost $84 a year and peaked at about 3,000 subscribers. The business incorporated as First Commander Corporation in 1971 and became Charles Schwab & Co. by 1973. On May 1, 1975, the SEC abolished fixed brokerage commissions, and Schwab opened a Sacramento branch as a discount broker. In 1979 he spent half a million dollars on BETA, an in-house back office computer system, and accounts grew from about 45,000 in 1978 to 374,000 by 1982 with 24-hour order entry and quotes. He sold the firm to Bank of America in 1983 for $55 million, then bought it back in 1987 for $280 million after launching a no-load mutual fund marketplace.

Schwab launched web trading in 1996 and shared the CEO job with David Pottruck from 1998 to 2003. Under Pottruck’s sole control, fees rose, and in the second quarter of 2004 profit fell 10 percent to $113 million while trading revenue dropped 26 percent. The board fired Pottruck in July 2004 and Schwab returned, saying the firm had lost touch with its heritage; shares rose 151 percent by 2008. That year the Schwab YieldPlus Fund, heavy in mortgage-backed securities, returned negative 31.7 percent and cost investors $1.1 billion, and Schwab handed the CEO role to Walter Bettinger. Later deals included optionsXpress, Thomas Partners, TD Ameritrade and USAA’s investment accounts, and client assets reached $10.10 trillion by late 2024.

• BETA stood for Brokerage Execution and Transaction Analysis.
• A 1984 program offered 140 mutual funds with no upfront sales charge, paid for by fund companies.
• Digital agency Razorfish built out the Schwab website.
• Schwab personally lost money in YieldPlus alongside his customers, and the fund closed in 2011.
• In 2022 the SEC fined Schwab $187 million for misleading robo-advisor clients about cash drag from 2015 to 2018.