Chuck Gives Clients a Voice to Gain New Ones – Stock to $19.60

July 5th, 2011 by Trefis Team
-2.75%
Downside
74.99
Market
72.93
Trefis
SCHW: Charles Schwab logo
SCHW
Charles Schwab

Charles Schwab Corporation (NYSE:SCHW) recently announced a new service called Clients Speak that allows customers to publicly rate Scwhab’s online services and write detailed reviews. [1] This is a bold move at gaining new customers from competitors like E-Trade (NASDAQ:ETFC), Ameritrade (NYSE:AMTD), Wells Fargo (NYSE:WFC) and Bank of America (NYSE:BAC). The increased transparency could also bring in new customers who don’t have online brokerage accounts.

Our price estimate for Charles Schwab is $19.60, implying a nearly 20% premium to the market price.

Clients Speak does hold promise…

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Schwab is working with the unaffiliated company Bazaarvoice to implement its new Ratings & Review system to be provided to all its customers as the “Clients Speak” service. The company intends to collect customer ratings on aspects like customer service, investment help & guidance, web site features as well as fees & commissions from its clients every month — and display the results on its website. Clients are also encouraged to review these services.

Schwab intends to make this information available publicly to everyone, so that investors looking to open online brokerage accounts can benefit from them in taking a decision. The system, hence, aims at bringing in an unexplored level of transparency to the online brokerage industry.

… and could bring more customers to Schwab

Investors trying to figure out which online brokerage firm to open an account with are most likely to benefit from this new service, as their decision would be more informed now – and they would know what to expect if they sign-up with Schwab.

While the number of active brokerage accounts with Schwab is expected to grow steadily in the future, this new service definitely has the potential to boost the growth.

See our complete analysis for Schwab

Notes:
  1. Charles Schwab Launches Clients Speak™ and Becomes the First Brokerage Firm to Allow Clients to Publicly Rate and Review Their Experience, Schwab Press Releases, Jun 28 2011 [↩]