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Schwab Turns Against the Street

By Rob Walker
Posted Monday, July 8, 2002, at 1:08 PM ET

These days, everybody hates Wall Street. It turns out that even Charles Schwab, the discount broker, hates Wall Street. You can tell by the accusatory tone of a recent ad the firm put out, which you can see on the Ads.com Web site.

The Ad: A bunch of stockbrokers are gathered to hear a morning pep talk, led by a slightly older fellow in a red tie and one of those dress shirts that's light blue except for the starched, white collar. "OK kids," he says, "here's today's magic stock." A handout goes around as the crew listens. "We've got big incentives on this one, so get on the phones. We've got a lot of stock to move," the head man continues. "Tell your customers it's red-hot, this one's en fuego. Just don't mention the fundamentals—they stink. There are a couple of courtside playoff tickets for today's winner." He pauses. "Now let's put some lipstick on this pig. Get to work, people." The scene ends and switches to a voice-over promising: "There's never been a better time for Charles Schwab. We're different. We don't pay our investment consultants commissions or give them incentives to push stocks. So the advice you get is in your best interest." We see the Schwab logo and a phone number.

Take that! This ad was produced right on the heels of Merrill Lynch's public flogging for the sins of the infamous stock analyst Henry Blodget a few weeks back. And it was instantly interpreted as a direct shot at Merrill, so much so that CBS refused to air the Schwab ad at all. (Merrill, after all, is said to be a bigger advertiser on the network than Schwab is.)

The funny thing about it is that bashing Wall Street in an advertisement isn't really a sign of a fresh Zeitgeist replacing the ga-ga years of the Internet bubble and the 10,000-plus Dow. There were plenty of ads back then that bashed Wall Street, too. Remember all the spots touting online trading services, ridiculing brokers and "experts" as hapless fools? In those days, the idea was that you could seize the tools of the trade and run circles around the clueless masters of the universe in their pinstripes and their fancy shoes (and their stiff, white collars). What did those losers know about the brave new world? Nothing! They were Old Economy, they were insiders, they were the last people that a smart, do-it-yourself investor would ever listen to.

Memory Loss. Of course, that script has since been rewritten. Now the conventional wisdom is that We the Investors all trusted Wall Street, and Wall Street lied to us. The core of the do-it-yourself ethos (that is, doing it yourself) has been quietly airbrushed out of the picture, clearing the way for the current carnival of blame.

Which brings us back to this Schwab ad. The cleverest thing about the spot is the way it mushes together the role of stock analysts and stock brokers at a firm like Merrill Lynch—it's the analysts who are being derided today, but the ad shows a bunch of brokers, who are apparently about to work the phones like hustlers in the lowest bucket shop (or characters from the film Boiler Room).

But the specifics of Merrill Lynch's recent problems are only part of what makes this ad effective—and it's very effective. The other part isn't what's changed since the market started to crumble, it's what hasn't changed at all: In good times and bad, we'll always love to bash the Street.

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Rob Walker writes the Ad Report Card for Slate.
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