Household HSBC Watch

Charles Schwab recently appointed William F. Aldinger to Schwab’s board of directors. As such we monitor Charles Schwab. See Schwablems here.

By Rich Smith, Updated: 10:15 a.m. ET Sept. 16, 2005
On Thursday, Charles Schwab (NYSE: SCH) announced the repeal of two expensive impositions on its account holders. First, it will no longer charge inactivity fees — those $30 charges that brokers hit you with when you don’t trade often enough, or don’t have a big enough bankroll for their liking. Second, Schwab will stop charging its $3 order handling fee.

It’s been four years since Schwab first introduced this fee. At the time, the company was charging roughly $30 per stock trade and had been doing quite well as the day traders lined up to cash in on the Internet bubble. But when the burst arrived, and dependable, double-digit annual portfolio gains became a thing of the past, Schwab saw an exodus in the ranks of its paying customers. Paying $30 a trade wasn’t much of a hardship when your money doubled every few years, but when the market turned south, investors flew south with it, and into the arms of cheaper discount brokers like Ameritrade (Nasdaq: AMTD), Toronto-Dominion’s (NYSE: TD) TD Waterhouse, and E*Trade (NYSE: ET).