Charles Schwab 2010 Annual Report Download - page 16

THE CHARLES SCHWAB CORPORATION
PART I
Item 1. Business
General Corporate Overview
The Charles Schwab Corporation (CSC), headquartered in San Francisco, California, was incorporated in 1986 and engages, through
its subsidiaries (collectively referred to as the Company, and primarily located in San Francisco except as indicated), in securities
brokerage, banking, asset management, and related financial services. At December 31, 2010, the Company had $1.57 trillion in
client assets, 8.0 million active brokerage accounts , 1.5 million corporate retirement plan participants, and 690,000 banking
accounts.
Significant business subsidiaries of CSC include:
• Charles Schwab & Co., Inc. (Schwab), which was incorporated in 1971, is a securities broker-dealer with 302 domestic
branch offices in 45 states, as well as a branch in each of the Commonwealth of Puerto Rico and London, U.K., and serves
clients in Hon
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h one of CSC’s subsidiaries;
• Charles Schwab Bank (Schwab Bank), which commenced operations in 2003, is a federal savings bank located in Reno,
Nevada; and
The Company provides financial services to individuals and institutional clients through two segments – Investor Services and
Institutional Services. The Investor Services segment includes the Company’s retail brokerage and banking operations. The
Institutional Services segment provides custodial, trading, and support services to independent investment advisors (IAs), as well as
retirement plan, equity compensation plan, and other financial services to corporations and their employees. For financial information
by segment for the three years ended December 31, 2010, see “Item 8 – Financial Statements and Supplementary Data – Notes to
Consolidated Financial Statements – 24. Segment Information.”
As of December 31, 2010, the Company had full-time, part-time and temporary employees, and persons employed on a contract basis
that represented the equivalent of about 12,800 full-time employees.
Acquisitions and Divestiture
• Charles Schwab Investment Management, Inc. (CSIM), which is the investment advisor for Schwab’s proprietary mutual
funds, referred to as the Schwab Funds .
On November 9, 2010, the Company completed its acquisition of substantially all of the assets of Windward Investment
Management, Inc. (Windward), which was an investment advisory firm that managed diversified investment portfolios comprised
primarily of exchange-traded fund securities.
In July 2007, the Company sold all of the outstanding stock of U.S. Trust Corporation (USTC, and with its subsidiaries collectively
referred to as U.S. Trust). U.S. Trust was a subsidiary that provided wealth management services.
In March 2007, the Company acquired The 401(k) Company, which offers retirement plan services. The acquisition enhanced the
Company’s ability to meet the needs of retirement plans of all sizes. The acquisition also provided the opportunity to capture rollover
accounts from individuals participating in retirement plans served by The 401(k) Company and to cross-sell the Company’s other
investment and banking services to plan participants.
Business Strategy and Competitive Environment
The Company’s purpose is to help everyone be financially fit. The Company’s strategy is to meet the financial services needs of
individual investors, both directly and indirectly, through its two segments. To pursue its strategy, the Company focuses on: building
client loyalty; innovating in ways that benefit clients; operating in a disciplined manner; and leveraging its strengths through shared
core processes and technology platforms. The Company provides clients with a compelling combination of
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