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Charles Schwab CEO: Price 'matters more than ever' in online broker business

Charles Schwab Corp. would not shy away from lowering its customers' trading fees again if necessary, President and CEO Walter Bettinger II said during the company's Feb. 6 business update.

"If we found ourselves ever in a situation where key competitors felt they were going to price underneath us, that would not be a situation that would be tenable to us," Bettinger said. The online broker's chief executive added that he does not see any reason to take further pricing actions in today's environment.

The comments come about a year after Schwab slashed its commission rates in a fight for the lowest fees with competitors TD Ameritrade Holding Corp., E*TRADE Financial Corp. and Fidelity Investments. When the dust settled in February 2017, Schwab walked away offering a standard trading commission fee of $4.95 per trade for online equities and exchange-traded funds, matching Fidelity with one of the lowest rates in the space.

While the company was able to draw in more trading activity throughout 2017, Schwab saw its trading revenues fall off as well. Daily average revenue trades during the fourth quarter of 2017 were up to 345,000 from 293,000 in the fourth quarter of 2016. But the company also reported about $154 million in fourth-quarter 2017 trading revenues, down from $202 million in the prior-year period.

The decision to cut fees was prompted by Schwab's desire to diminish the "price barrier" that prevented certain market participants from trading and investing, said Bettinger, who added that when all else is equal, he believes prospective investors would elect to use Schwab to trade.

"Price matters more than ever, in our industry more than most," he said.