Charles Schwab is one of the few executives in the brokerage business who built an empire by actually caring about his customers.
In an hour-long interview, Schwab told me that when he got into this business it seemed to go against his very grain. He had thought of investing was a way for average Americans to buy homes, fund businesses, and pay for educations, family vacations and retirements. But everyone around him seemed to think of it as a sales program for lining up a steady stream of oversized commissions.
It was a business built on “great salesmanship,” he said. And a business “based upon how much you could extract from the client.
“I became aware of all these very bad deals for the average American investor,” he said. “They had to sell crappy stuff to make a lot of money, and they had unlimited upside with commissions.”
“People didn’t understand that when they bought a mutual fund, the next day they lost 8 1/2% because they paid an 8-1/2% load,” he said. “The American public is very trustworthy. It’s amazing. They’re taken advantage of by these hidden costs and hidden expenses,” he said.
Click here to read my story on how Schwab democratized investing for Americans in Investor’s Business Daily.