Charles Schwab 2015 Annual Report Download - page 21

THE CHARLES SCHWAB CORPORATION
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PART I
Item 1. Business
General Corporate Overview
The Charles Schwab Corporation (CSC) is a savings and loan holding company, headquartered in San Francisco, California.
CSC was incorporated in 1986 and engages, through its subsidiaries (collectively referred to as the Company), in wealth
management, securities brokerage, banking, money management, custody, and financial advisory services. At December 31,
2015, the Company had $2.51 trillion in client assets, 9.8 million active brokerage accounts, 1.5 million corporate retirement
plan participants, and 1.0 million banking accounts.
Significant business subsidiaries of CSC include the following:
x Charles Schwab & Co., Inc. (Schwab), which was incorporated in 1971, is a securities broker-dealer with over 325
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;
x Charles Schwab Bank (Schwab Bank), which commenced operations in 2003, is a federal savings bank located in
Reno, Nevada; and
x 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 (ETFs), 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, retirement plan
services, and other corporate brokerage services. The Advisor Services segment provides custodial, trading, and support
services as well as retirement business services. These services are further described in the segment discussion below. For
financial information by segment for the three years ended December 31, 2015, see “Item 8 – Financial Statements and
Supplementary Data – Notes to Consolidated Financial Statements – 24. Segment Information.”
As of December 31, 2015, the Company had full-time, part-time and temporary employees, and persons employed on a
contract basis that represented the equivalent of about 15,300 full-time employees.
Business Acquisitions
In December 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 with
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.
Business Strategy and Competitive Environment
Recognizing the benefits of having a clear strategy, management has developed a framework that consists of a purpose,
vision, and values guided by the Company’s “Through Clients’ Eyes” strategy. The Company’s stated purpose is to
champion every client’s goals with passion and integrity, believing the best long-term strategy is one that puts clients’
perspectives, needs, and desires at the forefront. The Company’s vision is to be the most trusted leader in investment
services.
Because investing plays a fundamental role in building financial security, the Company strives to deliver a better investing
experience for its clients – individual investors and the people and institutions who serve them – by disrupting longstanding
industry practices on their behalf and providing superior service. The Company aims to offer a broad range of products and
solutions to choose from, including relevant and actionable advice, with a focus on transparency and convenience. In
addition, management works to leverage the Company’s scale and resources, as well as expense discipline, to help keep costs