Short Stories in Business: When Publicity Put Charles Schwab on the Map

Before Charles Schwab Corporation was an established name in the field of personal investing, it was a scrappy startup from San Francisco

In the late 1970s, before Charles Schwab Corporation was a household name in investing and banking, founder Charles Schwab was introduced to a well-known syndicated financial columnist named Dan Dorfman.

They shared a corner table at the Four Seasons in New York City, where Schwab explained to Dorfman about his new company. At the time, high broker fees were standard within the industry of stock market investing. But Schwab saw an opportunity to significantly cut costs: His company would eliminate the expensive research and advisory side of investing to provide a discount brokerage firm.

Let customers do their own investing research, Schwab figured, instead of making them pay exorbitant fees for brokers to do that research for them. Charles Schwab Corporation simply charged the customers for the transaction, providing everyday Americans an affordable way to invest.

Schwab handed Dorfman a rate card. The low investing fees caught his attention. While still sitting at the Four Seasons, Dorfman decided to call one of Schwab’s biggest competitors to compare costs. A corded phone was brought to their table by a waiter — this was the 1970s, after all — and Dorfman called Merrill Lynch to ask about their rates. The columnist soon had his story.

Dorfman featured Charles Schwab Corporation in an article about the importance of shopping broker commissions. Hundreds of publications across the country syndicated the article, giving powerful free publicity to the financial startup.

As Charles Schwab recounts in his autobiography, “That one article was worth more to my growing business than a year’s worth of paid advertising. It put us on the map.”

A version of this article originally appeared in The Craft & Business of Writing, my weekly newsletter about freelancing, writing, and entrepreneurship. Subscribe to get my free guide, “Who Pays for Words?”