Charles Schwab 2015 Annual Report Download - page 23

THE CHARLES SCHWAB CORPORATION
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Products and Services
The Company offers a broad range of products to address individuals’ varying investment and financial needs. Examples of
these product offerings include the following:
x Brokerage – an array of full-feature brokerage accounts with cash management capabilities;
x Mutual funds – third-party mutual funds through the Mutual Fund Marketplace®, including no-transaction fee
mutual funds through the Mutual Fund OneSource® service, which also includes proprietary mutual funds, plus
mutual fund trading and clearing services to broker-dealers;
x Exchange-traded funds – an extensive offering of ETFs, including many proprietary and third-party ETFs available
without a commission through Schwab ETF OneSource™;
x Advice solutions – managed portfolios of both proprietary and third-party mutual funds and ETFs, separately
managed accounts, customized personal advice for tailored portfolios, and specialized planning and full-time
portfolio management;
x Banking – checking and savings accounts, certificates of deposit, first lien residential real estate mortgage loans
(First Mortgages), home equity loans and lines of credit (HELOCs), and Pledged Asset Lines® (PALs); and
x Trust – trust custody services, personal trust reporting services, and administrative trustee services.
The Company’s full array of investing services are made available through its two segments – Investor Services and Advisor
Services. The Company’s major sources of revenues are generated by both of the Company’s reportable segments. Revenue
is attributable to a reportable segment based on which segment has the primary responsibility for serving the client. The
accounting policies of the Company’s reportable segments are the same as those described in “Item 8 – Financial Statements
and Supplementary Data – Notes to Consolidated Financial Statements – 2. Summary of Significant Accounting Policies.”
For financial information related to the Company’s reportable segments, see “Item 7 – Management’s Discussion and
Analysis of Financial Condition and Results of Operations – Results of Operations – Segment Information” and “Item 8 –
Financial Statements and Supplementary Data – Notes to the Consolidated Financial Statements – 24. Segment Information.”
Investor Services
Through the Investor Services segment, the Company provides retail brokerage and banking services, retirement plan
services, and other corporate brokerage services. The Company offers research, analysis tools, online portfolio planning
tools, performance reports, market analysis, and educational material to all clients. Schwab’s FCs can provide wealth
management and financial planning assistance to clients to help them reach their financial goals. Investors looking for more
guidance have access to professional advice from Schwab’s portfolio consultants who can help develop an investment
strategy and carry out investment and portfolio management decisions, as well as a range of fully delegated managed
solutions that provide ongoing portfolio management.
Schwab strives to educate and assist clients in reaching their financial goals. Educational tools include workshops, interactive
courses, and online information about investing, from which Schwab does not earn revenue. Additionally, Schwab provides
various online research and analysis tools that are designed to help clients achieve better investment outcomes. As an
example of such tools, Schwab Equity Ratings® is a quantitative model-based stock rating system that provides all clients
with ratings on approximately 3,000 stocks, assigning each equity a single grade: A, B, C, D, or F. Schwab Equity Ratings
International®, an international ranking methodology, covers approximately 4,000 stocks in 27 foreign equity markets.
Clients may need specific investment recommendations, either from time to time or on an ongoing basis. The Company
provides clients seeking advice with personalized solutions. 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™ features a personal advice relationship with a designated portfolio consultant, supported by a team
of investment professionals who provide individualized service, a customized investment strategy developed in collaboration
with the client, and ongoing guidance and execution.
For clients seeking a relationship in which investment decisions are fully delegated to a financial professional, the Company
offers several alternatives. The Company provides investors access to professional investment management in a diversified
account that is invested exclusively in either mutual funds or ETFs through the Schwab Managed Portfolios™ and
Windhaven Investment Management, Inc. (Windhaven®), or equity securities through ThomasPartners® programs. The