Individual Investors
Clients of the Company, through the Individual Investor segment or indirectly
through the Institutional Investor segment, have access to the services.
Independent Investors. For investors who make independent investment decisions,
the Company offers research, analytic tools, and access to fee-based portfolio
consultations and financial planning services. Clients looking for more guidance
have access to advanced research, trading and planning resources, combined with
professional advice from Schwab's investment specialists designed to assist
in developing an investment strategy and carrying out investment and portfolio
management decisions.
Schwab strives to demystify investing by educating and assisting clients in
the development of investment plans. Educational tools include workshops designed
to help investors increase their skills in using Schwab's online services; interactive
courses designed to help clients learn more about investing principles and use
of the online channel; and a centralized location on schwab.com(TM) for educational
information about investing. Schwab provides various Internet-based research
and analysis tools which are designed to help clients achieve better investment
outcomes.
Schwab Equity Ratings(TM) provide clients with an objective stock rating system
on more than 3,000 stocks, assigning each equity a single grade: A, B, C, D,
or F. Rated stocks are ranked and the number of 'buy consideration' ratings
- As and Bs - equals the number of 'sell consideration' ratings - Ds and Fs.
Advised Investors. The Company seeks to provide clients with customized advice
that is uncomplicated and not influenced by commissions on transactions.
The Company's approach to advice is based on long-term investment strategies
and guidance on portfolio diversification and asset allocation. This approach
is designed to be offered consistently across all of Schwab's delivery channels.
Schwab Private Client(TM) features a face-to-face advice relationship with a
designated Schwab consultant who offers individualized service, provides ongoing
investment strategy and execution, and acts as a liaison between clients and
a team of Schwab professionals.
The Schwab Advisor Network (The Network) is designed for investors who want
the assistance of an independent professional in managing their financial affairs.
The IAs in the Network provide investors with personalized portfolio management,
financial planning, and wealth management solutions. Through a separate program,
certain Schwab clients and potential clients who desire personalized investment
management, wealth management, trust, and private banking services can receive
referrals to U.S. Trust.
Actively Trading Investors. The Company strives to deliver information, technology,
service and pricing which meets the needs of active traders. For highly active
traders, CyberTrader offers integrated software-based trading platforms, which
utilize direct access and intelligent order routing technology, and a streaming
Web trading platform which includes real-time market data, direct access technology,
intelligent order routing, options trading, and premium stock research. For
active traders, Schwab also offers a desktop trading
software and trading technology tools with account management features, risk
management tools, multi-channel access, and dedicated personal support.
Banking Services. In addition to the banking services which U.S. Trust offers
its clients, the Company provides all of its clients with access to selected
banking services through Schwab Bank which complement its existing asset and
wealth management capabilities and help to facilitate the consolidation of household
financial assets at Schwab.
Global Dollar Services. The Company's international business serves both foreign
investors and non-English-speaking U.S. clients in U.S. dollar-based securities.
The Company has a presence in the United Kingdom and Hong Kong. In the U.S.,
the Company serves Chinese-, Korean-, Vietnamese-, and Spanish-speaking clients
through a combination of designated branch offices and Web-based and telephonic
services.
Institutional Investors
Services for IAs. Schwab provides custodial, trading, technology, Web, and
other support services to IAs, whose services are integral to the Company's
advice offerings, through the Institutional Investor segment. To attract the
business of these advisors, Schwab has a dedicated business unit which includes
experienced registered representatives assigned to individual advisors.
IAs participating in this program who custody client accounts at Schwab may
use proprietary software which provides IAs with up-to-date client account information,
as well as mutual fund trading and management fee capabilities.
Participating IAs may also utilize the Schwab Institutional website, the core
platform for IAs to conduct daily business activities online with Schwab, including
trading, submitting client account information, and retrieving news and market
information; as well as a service which enables IAs to provide their clients
with personalized equity portfolio management by a variety of institutional
asset managers.
Corporate Services. The Company also serves individuals through their workplace
in a variety of ways. The Company provides 401(k) recordkeeping and other retirement
plan services directly through a dedicated sales force, as well as indirectly
through alliances with third-party administrators. SchwabPlan(R),
the Company's 401(k) retirement plan product, offers plan sponsors a wide array
of investment options, participant education and servicing, trustee services,
and participant-level recordkeeping. In addition, the Company offers a comprehensive
bundled 401(k) plan designed specifically to meet the needs of 401(k) programs
with between $2 million and $20 million in participant assets.
Participants in these plans have online, telephonic, or in-person access to
customized advice provided by a third party, including specific recommendations
about savings rates and the core investment fund choices available in a given
retirement plan.
Capital Markets
The Company provides its clients with quick and efficient access to the securities
markets by offering trade execution services in Nasdaq, exchange-listed, and
other securities through its market-maker operations. Clients also have the
ability to access extended-hours trading and analyze and trade a variety of
fixed income securities through Schwab's multi-channel delivery systems. Additionally,
the Company provides trade execution services via its institutional equity trading
team of over 170 professionals.
The Company provides trade execution capabilities through the Schwab Liquidity
Network(TM), a market-making system that pools the orders of the Company's individual
investor client base with those of broker-dealers and institutional investment
firms in a manner designed to offer greater opportunities for the best possible
price on most stock trades. Further, the Company offers automated electronic
execution for most Nasdaq stock trades of up to 20,000 shares for retail orders.
In November 2003, the Company announced an agreement to acquire SoundView Technology
Group, Inc., a research-driven securities firm providing institutional investors
with fundamental research on companies in selected growth-related industries.
U.S. Trust
U.S. Trust provides an array of financial services for affluent clients and
their families. These services include investment and wealth management, trust,
custody, financial and estate planning, and private banking. U.S. Trust provides
both individually managed balanced portfolios (i.e., portfolios that are invested
in several different asset classes with the overall goal of preserving and enhancing
those assets) and specialized investment management services to clients with
$2 million to $50 million in assets at U.S. Trust. U.S. Trust
offers Wealth Advisory Accounts, an investment advisory service that utilizes
the Excelsior(R) family of mutual funds, to clients that have over $250,000
in assets at U.S. Trust. In addition to investment management services, U.S.
Trust provides specialized fiduciary, financial planning, enhanced master custody,
and philanthropic consulting services to clients that have over $50 million
in assets at U.S. Trust. U.S. Trust also offers private banking services to
assist in meeting the credit and liquidity requirements of its clients.
For institutional clients, including corporations, endowments, foundations,
and pension plans, U.S. Trust provides investment management, brokerage, and
special fiduciary services. Through these investment management services, U.S.
Trust offers a wide range of investment options, including balanced and specialized
domestic and international equity investments, structured investments, alternative
investments, fixed income securities, and short-term cash management. Institutional
clients can also utilize the Excelsior funds. Additionally, U.S. Trust offers
to its institutional clients investment, consulting, and fiduciary services
for employee stock ownership plans.