Why We Don’t Take Sides on Political Issues
Americans are extraordinarily divided politically. On any given day, one can see pundits on television, in magazines, in the newspaper or on the internet involved in increasingly polarized debates related to a wide variety of political, economic and social issues. Media outlets themselves increasingly seem focused on getting viewership or readership by appealing to one side of a debate or the other—or pursuing drama and conflict at the expense of a fair airing of differing points of view. The result is that dialogue on these topics is often reduced to one set of voices talking past opposing voices with little hope for agreement or compromise. It’s a frustrating state of affairs, but one that’s been years in the making and that is unlikely to abate overnight.
So it is not surprising that our company periodically receives requests from clients or employees to take a position supporting the views of one side or the other of today’s debates. The requests are passionate, and nearly all are well intentioned. We understand that people sometimes look to the institutions they work with, or work for, as a source of support for their personal views. But our answer when asked to take a side is almost always the same: a very respectful ‘no.’
Why? It’s certainly not due to a lack of respect for the political leanings or viewpoints of our clients or employees. It is, in fact, our respect for all of those viewpoints that leads us to believe that our company’s purpose is best realized by declining to take sides in political debates unrelated to our business.
When Chuck Schwab started our firm, he sought to create a company that would make investing easier and more accessible for everyone. That is worth repeating: for everyone. That spirit of inclusion still permeates all that we do at Schwab. And it’s why we have stayed true to one of the core principles Chuck instituted when he founded the firm. On public policy and political topics, The Charles Schwab Corporation speaks out only on issues that are directly related to saving and investing – our core focus. We don’t take sides on other issues.
Of course, we encourage everyone to have their own views, hopefully well informed and reasoned. But as a company, we decline to take political and public policy positions outside the realm of saving and investing because we know that the clients who rely on us and our employees who serve those clients have opinions on these topics, too. And we never want to be seen attempting to speak for the diverse viewpoints held by them. Nor do we want a company positon on political issues to get in the way of our employees serving others, or all of our clients achieving better financial outcomes.
We know this approach may not make us popular with those who believe our company should take a stand. It frustrates some people or organizations that we will not agree with them – particularly those who fervently believe that their viewpoint is correct and that no other viewpoint is acceptable. But we believe keeping our company out of political debates that are not directly related to saving and investing is the right answer, and that it is a more important north star for us.
That doesn’t mean we remain silent on every policy debate with a political overtone. Our Washington, DC, Office of Legislative and Regulatory Affairs advocates for responsible policies, laws and regulations that help investors and investment advisors. We work to educate lawmakers, regulators and executive branch officials at the international, federal, state and local levels. But as we do so, The Charles Schwab Corporation does not support or endorse any political party or individual political candidate.
The Charles Schwab Corporation Political Action Committee (“Schwab PAC”) will periodically provide financial support to Members of Congress. Schwab PAC is funded solely by voluntary personal contributions from company employees and directors. And importantly, by policy, Schwab PAC divides its contributions equally between Republicans and Democrats. Lastly, Schwab PAC does not contribute to Presidential candidates from any party. As far as we are aware, ours is the only PAC among all financial services firms that, by policy, splits its contributions 50-50 between both parties, year in and year out.
We will support specific policy, legislative and regulatory solutions that directly affect our clients’ abilities to achieve their individual financial goals, as well as our ability to serve them in pursuit of those goals. Likewise, Schwab advocates for the continued growth of the independent Registered Investment Advisor (RIA) industry and our more than 7,500 client firms. We leverage our position as a leading service provider to independent investment advisors to drive awareness and appreciation for the independent fiduciary based model.
At Schwab, we believe strongly that everyone is entitled to their individual viewpoints – each and every client, employee or Board director. And that is why The Charles Schwab Corporation will continue our longstanding policy of not picking sides on the political debates of the day. Yes, we know this approach will frustrate some who believe that opposing perspectives do not have merit. And we know as some people read this they may feel frustrated that we won’t publicly take a stand on an issue important to them. We respect their right to their viewpoint on that issue. But we will not publicly endorse it. Because, in the end, we believe the ultimate sign of respect for others is the acknowledgement that each person has a right to their own personal viewpoints.