Charles Schwab 2012 Annual Report Download - page 19

LETTER FROM THE CHIEF EXECUTIVE OFFICER 17
As an innovator focused on transforming the nancial services
industry, we continued to invest aggressively in building our
market share across our businesses, and we introduced a
series of new products and services to benet investors. And
importantly, our stockholders were rewarded with an overall
return for the year of approximately 30 percent from growth in
our share price and reinvestment of dividends. For most rms,
this would be cause for celebration. But for those of us referred
to as “Schwabbies,” we reect only briey on the successes of
2012, for we are directing our attention to nding new ways to
delight our valued clients and future clients in 2013 and beyond.
2012 RESULTS
Despite the environmental challenges of 2012, Schwab
continued to grow NNA at a pace unrivaled among our
competitors. How? It’s pretty simple: We strive to see through
our clients’ eyes. But these words are more than a successful
strategy. They are part of our corporate DNA. And they are
what make Schwab different from the traditional model for
investment services. Our strategy provides a sharply focused
lens that helps us make decisions that should lead to long-term
earnings growth and value creation. I invite you to not simply
take my word that a strategy based on seeing through clients’
eyes works. Let’s look at the results.
For the 12 months ended December 31, 2012, The Charles
Schwab Corporation reported a record $1.95 trillion in total
client assets. Core NNA of $112.4 billion was up 37 percent
over the prior year, and we added 900,000 new brokerage
accounts during 2012, bringing active brokerage accounts to
a record 8.8 million, up 3 percent year over year. The number
of banking accounts grew 11 percent to 865,000, and the
number of corporate retirement plan participants increased
5 percent to 1.6 million as of December 31, 2012.
A growing and engaged client base helped Schwab deliver strong
nancial results in 2012.
• Net revenues increased 4 percent to $4.88 billion
• Net income gained 7 percent to $928 million
• Pre-tax prot margin of 29.7 percent remained robust
and even with last year
• Diluted earnings of 69 cents per common share compared
to 70 cents per share in 2011
RETHINKING INVESTING
Seeing through clients’ eyes has always been the Schwab
way. By listening thoughtfully to our clients, we’ve been able to
deliver services that make investing more accessible, affordable,
and understandable.
Schwab pioneered discount brokerage and opened investing
to the masses. We created an innovative and convenient way
to invest through a supermarket of no-load, no-transaction-fee
mutual funds. We led the way in online investing. We introduced
institutional-quality investment advisory services for the Main
Street investor. We helped thousands of independent advisors
serve their clients. And we disrupted the 401(k) industry to
deliver a better value for employees.
A lot has changed over the past 40 years, but even more has
stayed the same. Investors can still count on Schwab
to champion their nancial goals — and to do so with passion
and integrity.
Today, when we look through the eyes of investors, we continue
to see areas where they feel compromised — areas that present
opportunities for a rm like Schwab to challenge and disrupt the
status quo on their behalf.
Investors deserve better. And at Schwab, we’re constantly
innovating and championing better ways for our clients to reach
their goals. In every business segment, we’re focused on the
things that matter most to our clients — service, value, and
convenient access, all delivered with a high level of ethics and
integrity. Let’s take a closer look at how our client-focused
strategy shapes our beliefs and our actions in each area.
1. Rethinking Service
Clients deserve prompt and personalized service —
whenever and wherever they desire it. Last year, we logged
millions of interactions through multiple touchpoints, serving
all types of clients, including individual investors, registered
investment advisors (RIAs), corporate benet plan sponsors,
and their employees.
TOTAL CLIENT ASSETS
(IN BILLIONS AT YEAR END)
2008
$1 ,137.0
2012
$1,951.6
2011
$1 ,677.7
2009
$1,422.6
2010
$1,574.5