Charles Schwab 2010 Annual Report Download - page 17

THE CHARLES SCHWAB CORPORATION
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 helps create services that are scalable and
consistent. This combination helps the Company address a wide range of client needs – from tools and information for self-directed or
active investors, to advice services, to retirement and equity-based incentive plans, to support services for independent IAs – while
enabling each client to easily utilize some or all of these capabilities according to their unique circumstances.
The Company’s competition in serving individual investors includes a wide range of brokerage, wealth management, and asset
management firms, as well as banks and trust companies. In serving these investors and competing for a growing percentage of the
investable wealth in the U.S., the Company offers a multi-channel service delivery model, which includes branch, telephonic, and
online capabilities. Under this model, the Company can offer personalized service at competitive prices while giving clients the
choice of where, when, and how they do business with the Company. Schwab’s branches and regional telephone service centers are
staffed with trained and experienced financial consultants (FCs) focused on building and sustaining client relationships. The
Company offers the ability to meet client investing needs through a single ongoing point of contact, even as those needs change over
time. In particular, management believes that the Company’s ability to provide those clients seeking help, guidance, or advice with an
integrated, individually tailored solution – ranging from occasional consultations to an ongoing relationship with a Schwab FC or an
IA – is a competitive strength compared to the more fragmented offerings of other firms.
The Company’s online and telephonic channels provide quick and efficient access to an extensive array of information, research,
tools, trade execution, and administrative services, which clients can access according to their needs. For example, as clients trade
more actively, they can use these channels to access highly competitive pricing, expert tools, and extensive service capabilities –
including experienced, knowledgeable teams of trading specialists and integrated product offerings.
Individuals investing for retirement through 401(k) plans can take advantage of the Company’s bundled offering of multiple
investment choices, education, and third-party advice. Management also believes the Company is able to compete with the wide
variety of financial services firms striving to attract individual client relationships by complementing these capabilities with the
extensive array of investment, banking, and lending products and services described in the following section.
In the IA arena, the Company competes with institutional custodians, traditional and discount brokers, banks, and trust companies.
Management believes that its Institutional Services segment can maintain its market leadership position primarily through the efforts
of its expanded sales and support teams, which are dedicated to helping IAs grow, compete, and succeed in serving their clients. In
addition to focusing on superior service, Institutional Services competes by utilizing technology to provide IAs with a highly-
developed, scalable platform for administering their clients’ assets easily and efficiently. Institutional Services sponsors a variety of
national, regional, and local events designed to help IAs identify and implement better ways to grow and manage their practices
efficiently.
Another important aspect of the Company’s ability to compete is its ongoing focus on efficiency and productivity, as lower costs give
the Company greater flexibility in its approach to pricing and investing for growth. Management believes that this flexibility remains
important in light of the current competitive environment, in which a number of competitors offer reduced online trading commission
rates and lower expense ratios on certain classes of mutual funds. Additionally, the Company’s nationwide marketing effort is an
important competitive tool because it reinforces the attributes of the Schwab brand.
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:
• Brokerage
–
an array of brokerage accounts including some with chec
k
-writing features, debit card, and billpay; individual
retirement accounts; retirement plans for small to large businesses; 529 college savings accounts; designated brokerage
accounts; equity incentive plan accounts; and margin loans, as well as access to fixed income securities, and equity and debt
offerin
g
s;
• Banking
–
checking accounts linked to brokerage accounts, savings accounts, certificates of deposit, demand deposit
accounts, first mort
g
a
g
es, home e
q
uit
y
lines of credit (HELOCs), and
p
led
g
ed asset loans;
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• Trust
–
trust custody services, personal trust reporting services, and administrative trustee services;
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