Charles Schwab 2008 Annual Report Download - page 15

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THE CHARLES SCHWAB CORPORATION
- 1 -
as the Schwab Funds .
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, and related financial services. At December 31, 2008, the Company had $1.137 trillion in
client assets, 7.4 million active brokerage accounts(a), 1.4 million corporate retirement plan participants, and 447,000
banking accounts. Significant subsidiaries of CSC include: Charles Schwab & Co., Inc. (Schwab), which was incorporated in
1971, is a securities broker-dealer with 306 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 Hong Kong through 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 Charles Schwab Investment Management, Inc. (CSIM) is the investment advisor for Schwab’s proprietary
mutual funds, which are referred to
The Company provides financial services to individuals and institutional clients through three segments – Investor Services
(formerly called Schwab Investor Services), Advisor Services (formerly called Schwab Institutional®), and Corporate and
Retirement Services (formerly called Schwab Corporate and Retirement Services). The Investor Services segment includes
the Company’s retail brokerage and banking operations. The Advisor Services segment provides custodial, trading and
support services to independent investment advisors (IAs). The Corporate and Retirement Services segment provides
retirement plan services for employers and employees, as well as support services for plan administrators. For financial
information by segment for the three years ended December 31, 2008, see “Item 8 – Financial Statements and Supplementary
Data – Notes to Consolidated Financial Statements – 21. Segment Information.”
As of December 31, 2008, the Company had full-time, part-time and temporary employees, and persons employed on a
contract basis that represented the equivalent of about 13,400 full-time employees.
Acquisition and Divestitures
On July 1, 2007, the Company completed the sale of 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.
U.S. Trust is presented as a discontinued operation for all periods prior to the completion of the sale. All other information
contained in this Annual Report on Form 10-K is presented on a continuing operations basis unless otherwise noted.
On March 31, 2007, the Company completed its acquisition of 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.
In 2004, the Company sold its capital markets business, consisting of partnership interests of Schwab Capital Markets L.P.
and all of the outstanding capital stock of SoundView Technology Group, Inc. (collectively referred to as Schwab Soundview
Capital Markets, or SSCM).
Business Strategy and Competitive Environment
The Company’s purpose is to help everyone become financially fit. The Company’s strategy is to meet the financial services
needs of individual investors both directly and indirectly through its three segments. The Company provides clients with a
compelling combination of personalized relationships, superior service, and great value, delivered through a blend of people
and technology. People provide the client focus and personal touch that are essential in serving investors, while technology
(a) Accounts with balances or activity within the preceding eight months.