When Charles Schwab announced it was cutting commissions to zero on Oct. 1, 2019, it created a seismic shift in the online broker industry. Schwab's competitors soon followed, upending the economics of the retail brokerage industry that relied on trading commissions as a source of profits for centuries. But for Schwab, the announcement was the culmination of the revolution that Chuck Schwab started in the early days of founding his eponymous firm.

I recently had the opportunity to interview Chuck Schwab to celebrate the release of his memoir, Invested: Changing Forever the Way Americans Invest, which coincided with the announcement of the elimination of trading fees.

Since the early 1970s, Schwab and its competitors have been slowly lowering fees to entice more retail investors into the market. It worked. Schwab (the company) is now a multi-dimensional financial services firm that boasts $8.88 trillion in client assets as of March 2024 across 35 million accounts around the world.

While the elimination of trading fees cost the company an estimated $90 million to $100 million in revenue per quarter, the original discount broker has found other ways of earning a profit since opening for business in 1973.

Chuck was one of the pioneers of low-cost trading. In 1975, he took notice that the Securities Acts Amendments of 1975 put an end to fixed trade commissions, which which averaged over 80 cents per share.

The major expense had relegated investing to institutions and well-heeled investors only, but with fixed commissions now headed for the history books, Chuck Schwab, and a few other entrepreneurs, realized this opened the door for individual investors to really participate in the stock market and build their wealth.

"We probably didn't know it at the time, but May 1, 1975, was a watershed moment for individual investors and the markets," said Schwab in 2005. "With the sudden arrival of negotiated stock trades that were less than half the cost they had been, a major barrier to investing went away for the average American."

From that moment, Schwab continued to work on lowering costs for investors as he led the company that bears his name. "I always wanted to take commissions out of the equation," he told me when I interviewed him recently in New York. "They are an encumbrance on bringing people to invest."