Charles Schwab

The Project: Position Schwab as a full-service investment firm, with computer-generated stock ratings.

The Payoff: Investment advice at a small fraction of the cost of human analysts.

Three years ago, Charles Schwab & Co. (SCH ) itched to pitch to the rich. This meant turning itself from a discount brokerage for penny-pinchers into a full-service investment firm. To avoid the $20 million-a-year cost of hiring analysts, it made a one-time, $20 million bet on Web technology. Schwab Equity Ratings, a computer-generated online service, offers recommendations for buying and selling more than 3,000 stocks. It automatically sends e-mail alerts. Schwab says the computers pick stocks as efficiently as their human counterparts. In addition, the system does away with conflicts of interest. In the wake of the Wall Street scandals, that has to give investors a warm and fuzzy feeling -- even if the machines can't offer them the hand-holding they would get from humans.

By Cliff Edwards

    Before it's here, it's on the Bloomberg Terminal.