Schwab: US Trust to Stay in the Fold

October 6, 2004 ( - Charles Schwab has publicly proclaimed that he intends to retain his discount brokerage firm's high net-worth money manager as part of a broader corporate effort to reach out to clients.

In a wide-ranging media interview Tuesday, Schwab said US Trust had been a “very successful marriage” and there is “no reason to sell the company,” Reuters reported.   Schwab said 30% of the company’s revenues come from commissions and 70 % from trust fees and other financial services. That diversification, he said, would allow the company to endure even if trading prices go to zero.

Schwab, who replaced ousted CEO David Pottruck 75 days ago, also said that while he would not rule out stepping down as chairman if the board requested it, he will not relinquish the chief executive post. “This company requires my attention,” he said, speaking at a media lunch.

The company is sending a letter to each client, cutting trading fees and improving service and Web site navigation. A television campaign featuring Charles Schwab starts Wednesday.

The company, which is cutting costs by 20%, earlier this week announced its second round of commission cuts since June. Schwab acknowledged that the brokerage had become “less of a place for price than it was before.”

Schwab did not rule out industry consolidation but said his personal view of Charles Schwab Corp. was that “this company needs to be, deserves to be, has reason to be independent for the foreseeable future.”