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THE CHARLES SCHWAB CORPORATION
- 1 -
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 (together referred to as the Company, and located in San Francisco except as indicated), in securities
brokerage, banking, money management, and financial advisory services. At December 31, 2013, the Company had
$2.25 trillion in client assets, 9.1 million active brokerage accounts(a), 1.3 million corporate retirement plan participants, and
916,000 banking accounts.
Significant business subsidiaries of CSC include:
Charles Schwab & Co., Inc. (Schwab), which was incorporated in 1971, is a securities broker-dealer with over 300
domestic branch offices in 45 states, as well as a branch in each of the Commonwealth of Puerto Rico and London,
England, 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), which is the investment advisor for Schwab’s proprietary
mutual funds, referred to as the Schwab Funds®, and Schwab’s exchange-traded funds, referred to as the Schwab
ETFs™.
The Company provides financial services to individuals and institutional clients through two segments – Investor Services
and Advisor Services. The Investor Services segment provides retail brokerage and banking services to individual investors,
retirement plan services, and corporate brokerage services. The Advisor Services segment provides custodial, trading, and
support services to independent investment advisors (IAs), and retirement business services to independent retirement plan
advisors and recordkeepers whose plan assets are held at Schwab Bank. These services are further described in the segment
discussion below. For financial information by segment for the three years ended December 31, 2013, see “Item 8 –
Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – 23. Segment Information.”
As of December 31, 2013, the Company had full-time, part-time and temporary employees, and persons employed on a
contract basis that represented the equivalent of about 13,800 full-time employees.
Business Acquisitions
On December 14, 2012, the Company acquired ThomasPartners, Inc., a growth and dividend income-focused asset
management firm.
In September 2011, the Company acquired optionsXpress Holdings, Inc. (optionsXpress), an online brokerage firm primarily
focused on equity options and futures. The optionsXpress® brokerage platform provides active investors and traders trading
tools, analytics and education to execute a variety of investment strategies. optionsXpress, Inc., a wholly-owned subsidiary of
optionsXpress, is a securities broker-dealer.
In November 2010, the Company acquired substantially all of the assets of Windward Investment Management, Inc., an
investment advisory firm that managed diversified investment portfolios comprised primarily of exchange-traded fund
securities. As a result of the acquisition, Windhaven Investment Management, Inc. (Windhaven®) was formed as a wholly-
owned subsidiary of Schwab Holdings, Inc.
For additional information pertaining to the Company’s business acquisitions, see “Item 8 – Financial Statements and
Supplementary Data – Notes to Consolidated Financial Statements – 24. Business Acquisitions.”
(a) Accounts with balances or activity within the preceding eight months.