Charles Schwab 2006 Annual Report Download - page 33

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GROW T H IN CLIENT ASSE TS
AND A CCOUN TS
(In Billions, at Year End, Except as Noted) 2002-06 2005-06 2006 2005 2004 2003 2002
Assets in Client Accounts
Schwab One®, other cash equivalents
and deposits from banking clients 4% (1%) $ 31.0 $ 31.3 $ 31.7 $ 28.5 $ 26.1
Proprietary funds (Schwab Funds®,
Excelsior®, and Laudus FundsTM):
Money market funds 2% 22% 135.0 110.6 107.0 113.8 123.0
Equity and bond funds 27% 43% 56.2 39.2 33.0 26.5 21.8
Total proprietary funds 7% 28% 191.2 149.8 140.0 140.3 144.8
Mutual Fund Marketplace® (1):
Mutual Fund OneSource® 22% 18% 163.2 137.8 129.7 102.8 74.3
Mutual fund clearing services 31% 3% 62.1 60.2 44.2 33.5 21.2
Other third-party mutual funds 25% 21% 173.1 142.7 114.4 98.2 71.7
Total Mutual Fund Marketplace 24% 17% 398.4 340.7 288.3 234.5 167.2
Total mutual fund assets 17% 20% 589.6 490.5 428.3 374.8 312.0
Equity and other securities (1) 20% 15% 487.0 422.4 387.3 326.8 235.6
Fixed income securities 12% 19% 142.0 119.7 104.5 109.1 90.4
Margin loans outstanding 12% - (10.4) (10.4) (9.8) (8.5) (6.6)
Total client assets 17% 18% $ 1,239.2 $ 1,053.5 $ 942.0 $ 830.7 $ 657.5
Client assets by business
Schwab Investor Services 13% 15% $ 670.9 $ 583.6 $ 547.7 $ 509.5 $ 411.6
Schwab Institutional 23% 23% 502.5 407.0 348.2 287.1 222.4
Mutual fund clearing services
and other 29% 5% 65.8 62.9 46.1 34.1 23.5
Total client assets
by business 17% 18% $1,239.2 $1,053.5 $ 942.0 $ 830.7 $ 657.5
Net Growth in Assets in Client Accounts
(for the year ended)
Net new client assets (2) 12% 4% $ 72.2 $ 69.5 $ 48.8 $ 38.3 $ 46.4
Net market gains (losses) 113.5 42.0 62.5 134.9 (111.7)
Net growth (decline) $ 185.7 $ 111.5 $ 111.3 $ 173.2 $ (65.3)
New Brokerage Accounts
(in thousands, for the year ended) (4%) 15% 655 568 538 585 764
Active Client Accounts
(in thousands)(3)
Brokerage (4%) (4%) 6,737 7,049 7,252 7,480 7,937
Banking N/A N/A 147 N/A N/A N/A N/A
Corporate Retirement
Plan Participants N/A N/A 542 N/A N/A N/A N/A
Note: All amounts have been adjusted to exclude U.S. Trust Corporation in light of its pending sale.
(1) Excludes all proprietary money market, equity, and bond funds.
(2) Includes an outflow of $19.5 billion in 2006 related to a mutual fund clearing ser vices client who completed the transfer of these assets to an internal platform.
Includes an individual inflow and outflow of $3.6 billion and $6.0 billion in 2006 and 2004, respectively, related to two mutual clearing services clients.
(3) Periodically, the Company reviews its active account base. The Company identified over 400,000 brokerage accounts that met its current definition of active, but
had little or no balances and no likelihood of further activity. Effective March 31, 2006, the Company removed these accounts from its active brokerage account
total. Amounts for periods prior to 2006 were not adjusted. While the Company adjusted its definition of an active brokerage account to exclude certain zero and
minimal balance accounts, the basic definition remains “accounts with balances or activity within the preceding eight months.” In addition, to present a more com-
prehensive view of its client relationships, the Company added disclosures for its banking accounts (i.e., deposits, credit cards, HELOCs, mortgages, other loans)
and Corporate Retirement Plan Participants. Amounts for periods prior to 2006 are not available. Also, reflects the removal of 192,000 accounts in 2003 related to
the Company’s withdrawal from the Employee Stock Purchase Plan business and the transfer of these accounts to other providers.
GROWTH RATES
ANNUAL
1-YEAR
COMPOUNDED
4-YEAR