The Charles Schwab Corporation
Author | Mark Lane |
Pages | 301-304 |
Page 301
101 Montgomery Street
San Francisco, California 94104
USA
Telephone: (415) 627-7000
Fax: (415) 636-5970
Web site: www.schwab.com
Known as a discount broker in a world of traditional full-service investment firms, the Charles Schwab Corporation diversified during the 1980s and 1990s. In keeping with an industry-wide trend toward offering customers one-stop financial services, it expanded into banking, annuities, bond trading, and mutual funds. With the rise of the Internet, Schwab's core brokerage business evolved to allow trading on its website, making it America's leading online broker by the late 1990s. While a host of upstart, low-fee online trading services challenged Schwab from below, the company also needed to position itself against a wide range of consolidated financial-services companies. In response to these pressures, and amid an unprecedented bull market on Wall Street, Schwab rapidly increased its marketing profile at the end of the millennium, an effort that culminated with the well-received "Smarter Investor" campaign, which began in 1999 and ran through 2000.
Created by the New York office of Omnicom Group's BBDO agency for an estimated first-year price tag of $50 million, "Smarter Investor" began as a series of four television commercials featuring sports celebrities. According to the agency, the use of celebrities was meant to make Schwab seem accessible and good-natured, in touch with ordinary Americans' interests, and the athletes' humorously surprising grasp of the intricacies of investing terminology suggested that anyone, no matter what their previous level of financial expertise had been, could become a smarter investor with Schwab's help. Supporting print ads used the campaign's tagline, "Creating a world of smarter investors." Subsequent TV spots featured entertainment celebrities, and then the campaign evolved to shift the focus away from celebrities and onto Schwab's retirement-planning products and services.
The campaign attracted favorable industry attention and awards, but a sputtering stock market led Schwab to rethink the do-it-yourself ethos embodied by the "Smarter Investor" campaign. The terrorist attacks of September 11, 2001, dramatically heightened the investing public's already palpable anxiety, and Schwab further changed its advertising message, in the subsequent months and years, to suit a more anxious investing public.
Stanford graduate Charles Schwab founded his eponymous company (then Charles Schwab & Co.) as a full-service brokerage firm in 1971. When the Securities and Exchange Commission banned fixed brokers' commissions in 1975, Schwab's competitors responded by increasing commissions. Schwab instead lowered commissions and
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HISTORICAL CONTEXTIn addition to competing against this wide range of financial-services giants, Schwab had to contend with new down-market rivals as well. The number of online investing services went from none in 1995 to 82 in 1998, and though Schwab was early to establish itself in the online...
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