Charles Schwab 2012 Annual Report Download - page 18

16 LETTER FROM THE CHIEF EXECUTIVE OFFICER
n my letter last year, I made a few observations about
the challenges we would likely face in 2012: a bruising
presidential election, ongoing sovereign debt problems
in Europe, continued deleveraging by consumers, and the
Federal Reserve’s doubling down on their extraordinary
efforts to anchor interest rates at record low levels. These
all came to pass, making the environment difcult for our
company and our clients.
For Schwab, this environment once again depressed earnings
to a level below what we expect to deliver to stockholders
in a more normal environment. For investors, the continued
uncertainty prompted a move out of equities in search of
yield and security. Similarly, trading was muted as investors
struggled to see any signs of condence and conviction in the
equity market. Perhaps the most damaging aspect of 2012
was the ongoing lack of trust that consumers felt toward
nancial services rms. According to a recent major survey,
trust in nancial services companies ranked near the bottom
among all industries.
For many of our competitors, this lack of trust is a building
crisis. But at Charles Schwab, we see an enormous opportunity.
Our vision is clear: We want to be the most trusted leader in
investment services. Because when investors trust Schwab,
we grow our market share and build robust earnings power for
our stockholders. Building trust with our clients has been the
hallmark of Schwab for 40 years. We build trust by aligning
ourselves with our clients, by seeing the world through their
eyes, and by disrupting the traditional investing and banking
practices on our clients’ behalf.
TRUST MATTERS
Trust matters in our business. Chuck Schwab created this rm
to be safe and dependable, operated with a high level of
integrity, without making compromises at the expense of our
clients. We still believe that’s the way to build client trust, which
leads to growth.
Even in the face of an ongoing difcult economic environment,
in 2012 we continued to grow and prosper. In fact, when 2012
is reviewed years from now, it will go down as an exceptional
year for Charles Schwab. Schwab once again surpassed our
competitors in terms of growth as measured by Net New Assets
(NNA). In the fourth quarter of 2012 alone, clients brought more
than $64.4 billion of their wealth to us, including core NNA of
$47.8 billion. This extraordinary gure is a reection of the trust
that we have earned among investors with our daily actions.
TO MY FELLOW STOCKHOLDERS:
“‘Through clients’ eyes’ was Chuck Schwab’s strategy on
Day 1, when he founded this rm to offer a better deal
to investors. It has remained our strategy through four
decades of innovation, and it continues to guide us today.”
WALT BETTINGER
CHIEF EXECUTIVE OFFICER