In the late 1970s about 95 percent of Schwab' s business was done though branch walk-ins or telephone calls to branch office personnel; only 5 percent of the firm's business was done in branch office. In recent months, 48 percent of all the trades Schwab executed for its 5 million customers were via the firm's on-line trading service versus 28 percent a year earlier;The balance was done by telephoning customers their orders to personnel in the company' s central call centers. Schwab handled average of 34,100 in the first three months of 1997. The Company expected that on-line trades would eventually account for 75 percent of its trading volume. The Schwab' s head of electronic brokerage unit said,
online investing is evolving.One was about getting Phase early adopters on the Internet and a fragmented marketplace of firms fighting a price war at the cost of providing service, quality information, and quick access. Phase is about two millions providing investors with more access to an experience where Internet smart investing at a good value is paramount,where high levels of customer service and support and unbiased information, with value pricing, are the different competitive. Phase two is here.
The Schwab' s growth in on-line trading volume had already reduced its average Commission per trade from $68.50 in 1996 to $49 in early 1998 and resulted in the duties of its salaried customer representatives from shifting taking orders for trades to talking with clients about financial planning, estate planning, mutual fund selection, the pros and cons of variable annuities, retirement planning, fixed-come in investing, and insurance.
To combat growing competition and spur its revenue growth,1998 Schwab had plans to boot its advertising budget by 20 percent, to $100 million, and it had hired a new ad agency to promote its retail brokerage business.
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