want to put in a purchase order for 500 shares of Microsoft, you may not need to talk to anybody. But if you bought 1,000 shares of [America Online], and watched your portfolio go down by 50%, you might want to discuss that with somebody and get some sense of what to do going forward.
B.E.: For the second year in a row, you co-sponsored a survey with Ariel Capital on the investment patterns of African Americans and, in general, found them less invested in stocks, women in particular. How have you used the findings of the survey in your efforts to reach more African American investors?
POTTRUCK: I think that the most profound way is for us to become more familiar with the way African Americans think about investing. The survey suggests that they’re typically more conservative and more skeptical about investing. That suggests to us that when we’re working with African American investors, we have to be sure that we’re really spending the time necesary to make them feel comfortable and well-educated [about the stock market], and have them know that they’re not being sold something. I think one of the things that really plays to Schwab’s strengths is [that] we don’t push products or investments. We’re really in the customer service business.
One of our strategies is to recruit and train more African Americans to serve on the front lines serving customers. And so our hope is that the publicity and sponsorship of the African American survey suggests to people our commitment to this business and helps us in the recruitment of people to serve that market.
One of our greatest early successes in recruiting employees at Schwab was recruiting clients of Schwab to become employees. And I think we’re going to find that here as well. We’re going to find that some of our African American clients who really love the stock market are, in some cases, going to be prime candidates for jobs at Schwab.
B.E.: There are some people who say hiring minorities is not only the r
ight thing, but there’s a way to quantify it on the bottom line. What’s your view?
POTTRUCK: I think this is all a part of the greater story around diversity. Whether its African Americans, Asians, women, Latinos or the gay and Lesbian population, our view is, number one, there’s no question that the employment market in America is becoming less white and less male. So if you build your company around being great at recruiting, promoting and developing white males, you’re going to be competing for a smaller and smaller slice of the population and serving a smaller and smaller target market. If you want to draw from the broadest pool of talented people to serve a broad pool of Americans, then you’ve got to have an employee base that looks like America.
B.E.: As part of this effort, has Schwab opened more branches in minority neighborhoods?
POTTRUCK: We started in the Asian market. We began an Asian business unit about five years ago.