Charles Schwab Corporation (the) · NYSE:SCHW
Charles Schwab Corporation (the) — The Charles Schwab — Investor Day (May 2024)
118 slides from Charles Schwab Corporation (the)'s investor day presentation, May 22, 2024
Slide 1: Institutional Investor Day
Institutional Investor Day May 22, 2024
Slide 2: Introduction
Introduction Jeff Edwards Managing Director, Head of Investor Relations Charles Schwab Corporation 2
Slide 3: Presenters
Presenters Walt Bettinger Rick Wurster Joe Martinetto Bernie Clark Co-Chairman of the President Managing Director, Managing Director, Board and Chief Chief Operating Head of Advisor Executive Officer Officer Services Jonathan Craig James Kostulias Lisa Hunt Stacy Hammond Managing Director, Managing
Slide 4: Agenda
Agenda 1 Walt Bettinger, Long-term Strategic Overview Combined Q&A 2 Rick Wurster, Sustainable Growth Model following Ameritrade Integration Review 3 Joe Martinetto, Ameritrade Integration Review 15 Minute Break at 9:40 a.m. 4 Bernie Clark, Advisor Services 5 Jonathan Craig, Retail Investor Combined
Slide 5: Forward Looking Statements
Forward Looking Statements This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward- looking statements include statements that refer to goals, priorities, expectations, tre
Slide 6: Institutional Investor Day
Institutional Investor Day CORPORATION
Slide 7: Long-term Strategic Overview
Long-term Strategic Overview Walt Bettinger Co-Chairman of the Board and Chief Executive Officer Charles Schwab Corporation 7
Slide 8: Always put the client first. No matter what.
For over 50 years, we have looked at the world through our clients’ eyes — evolving to increasingly meet the spectrum of investors’ and traders’ needs across investing, banking, and wealth management solutions “Always put We continue to lead with our “no trade-offs” approach the client first. –
Slide 9: We have consistently championed individual investors and the advisors who serve them
DRAFT We have consistently championed individual 50+ $8.8T 35M+ investors and the advisors years in business client assets brokerage accounts who serve them. PURPOSE 1 To champion every client’s goals with passion and integrity 15K 5.3M VISION independent RIAs workplace plan Schwab To be the most tr
Slide 10: Since day one, we've set out to challenge the status quo
Since day one, we’ve set out to challenge the status quo, looking for ways to offer our clients more value and a best-in-class experience. Personalization Banking Advice Asset Advisor Management We call this Discount Services Modern Brokerage Wealth Management Our unwavering commitment to clients re
Slide 11: Our guiding principles revolve around the Golden Rule
Our guiding principles revolve around the Golden Rule: treat investors how we would like to be treated,... Trust is everything. Earned over time. Lost in an instant. Price matters. More than ever. And in our industry more than most. Clients deserve efficient experiences. Every time. Every prospectiv
Slide 12: ...and the rest will follow
…and the rest will follow. Since 2013 Total Client Assets, 2013 – 1Q24 ($T)1 SCHW Select Wealth Peers1 $9.1T +29M New Brokerage Accounts2 (excl. Ameritrade) MS JPM +$2.8T BAC $2.2T WFC Core NNA2 Dec-13 Mar-24 Note: Q = Quarter. M = Million. T = Trillion. NNA = Net new assets. Core net new assets = n
Slide 13: We are focused on serving our clients where and how they want to be served
We are focused on serving our clients where and how they want to be served. Value Service Deliver industry-leading Combine the best of people and value to all of our clients technology to deliver a stellar, modern wealth management experience “No trade-offs” Transparency Trust Ensure transparency ac
Slide 14: Our brokerage platform caters to self-directed investors and traders
Our brokerage platform caters to self-directed investors and traders who want access to a broad range of products and great service. Discount Brokerage Advisor Services Enhanced Trading Experiences $0 Commissions on Listed Stocks, Asset Management thinkorswim® and Schwab Network ETFs, Options, and M
Slide 15: Advisor Services is committed to helping independent advisors
Advisor Services is committed to helping independent advisors of all sizes grow, compete, and succeed. Discount Brokerage Advisor Services Client Assets ($T) $4.3T Advisor Services Asset Management 2003 1Q24 Advice Banking No Custody $53B 15K+ Fees YTD Core NNA1 Advisory Firms1 Personalization Note:
Slide 16: Competitively priced asset management solutions
Competitively priced asset management solutions are designed to address a variety of investor preferences. Discount Average OER for Passively Managed ETFs1 (bps) Brokerage ~$1.0T 15 Advisor Services 5 2004 2023 Schwab Industry Average Asset Management Schwab Asset Management AUM Low-Cost ETFs “No 1
Slide 17: Accessible wealth and advice solutions
We provide accessible wealth and advice solutions for many stages of a client’s journey. Discount Brokerage Full-Range of Wealth & Investment Management Solutions Advisor Services Asset Do it myself Do it with me Do it for me Management Trailing 12-months Advice Banking $38B+ Managed Investing Net F
Slide 18: A bank for investors: lending and cash management
As a bank for investors, we are focused on deepening relationships through lending and cash management solutions. Discount Brokerage Bank Lending Solutions Pledged Asset +200% Line® ® Pledged Asset Line $41B Growth in balances Residential Real Estate1 since 2017 Advisor Services Enhanced digital $16
Slide 19: Opportunities for personalization enhance client experience
Providing opportunities for personalization further enhances client experience and value. Discount Brokerage Schwab 1000 S&P SmallCap Equity 600® Schwab Investing Themes™ Advisor Services MSCI KLD MSCI EAFE 400 Social International Asset Schwab Stock Slices® Management Schwab Personalized Indexing®
Slide 20: Schwab's intentional evolution enables us to begin the next chapter from strength
Schwab’s intentional evolution enables us to begin the next chapter from a position of strength,… By design, we are aligned to the two fastest growing …keeping us well-positioned to capture meaningful growth segments in the U.S. Retail market,... for years to come. U.S. Retail Investable Wealth CAGR
Slide 21: Through Clients' Eyes strategy supports long-term profitable growth
…as our “Through Clients’ Eyes” strategy supports long-term profitable growth. Serve clients exceptionally well so we remain the industry’s premier asset gatherer Offer innovative solutions that meet the unique needs of our clients Cultivate lifetime relationships through excellent experiences Drive
Slide 22: Always put the client first. No matter what.
For over 50 years, we have looked at the world through our clients’ eyes — evolving to increasingly meet the spectrum of investors’ and traders’ needs across investing, banking, and wealth management solutions “Always put We continue to lead with our “no trade-offs” approach the client first. –
Slide 23: Sustainable Growth Model
Sustainable Growth Model Rick Wurster President Charles Schwab Corporation 23
Slide 24: Our no trade-offs approach informs our long-term strategy
Our “no trade-offs” Value Service approach to serving investors informs our long-term strategy, paving the way for continued growth. Transparency Trust Charles Schwab Corporation 24
Slide 25: Meeting clients' needs powers long-term organic growth
Our unwavering focus on meeting clients’ needs helps power our long-term organic growth. Core Net New Assets ($B) by New and Existing Clients1,2 5-7% $558 Annualized Core New Client NNA Schwab Originated NNA growth rate Existing Client NNA Accounts Only $428 $333B $306 Core NNA $282 3-5% $125 $135 $
Slide 26: Advancing our strategic priorities
We believe that further advancing our strategic priorities will help enable sustained long-term growth. Scale & Win-Win Client Brilliant Efficiency Monetization Segmentation Basics Enhanced wealth and Intuitive cross-channel Ameritrade integration Differentiated client advice offerings client experi
Slide 27: Enhancing operations and infrastructure: scale and efficiency
Further enhancing our operations and infrastructure helps our ability to attract more assets and serve them more efficiently. Scale & Ameritrade integration Remaining expense synergies Artificial intelligence Efficiency We continue to be the low-cost provider among full-service investment firms. 202
Slide 28: Enhancing operations: Ameritrade integration and expense synergies
Further enhancing our operations and infrastructure helps our ability to attract more assets and serve them more efficiently. Scale & Ameritrade integration Remaining expense synergies Artificial intelligence Efficiency We have increased the size of our client base Introducing Ameritrade clients to
Slide 29: Enhancing operations: artificial intelligence
Further enhancing our operations and infrastructure helps our ability to attract more assets and serve them more efficiently. Scale & Ameritrade integration Remaining expense synergies Artificial intelligence Efficiency We continue to be the low-cost provider Schwab Knowledge Assistant uses generati
Slide 30: Win-win monetization: wealth and advice offerings
By delivering industry-leading value to our clients, we attract and retain client assets while diversifying our revenue streams. Win-Win Wealth & advice offerings Lending capabilities Workplace businesses Monetization We continue to enhance the breadth of Our clients continue to be very satisfied …a
Slide 31: Win-win monetization: lending capabilities
By delivering industry-leading value to our clients, we attract and retain client assets while diversifying our revenue streams. Win-Win Wealth & advice offerings Lending capabilities Workplace businesses Monetization Bank lending serves a key need for clients and our Investor Advantage Pricing has
Slide 32: Win-win monetization: workplace businesses
By delivering industry-leading value to our clients, we attract and retain client assets while diversifying our revenue streams. Win-Win Wealth & advice offerings Lending capabilities Workplace businesses Monetization Workplace is positioned to deepen client By introducing millions of participants t
Slide 33: Client segmentation: tailored solutions
We strive to serve the specific needs of our clients by designing tailored solutions for distinct client groups. Client Enhanced service models Specialized capabilities Trading platforms International Segmentation We craft differentiated experiences for key client segments. 15%+ UHNW1 U.S. investors
Slide 34: Client segmentation: enhanced service models
We strive to serve the specific needs of our clients by designing tailored solutions for distinct client groups. Client Enhanced service models Specialized capabilities Trading platforms International Segmentation Our specialized client services models …and we are delivering new products and We craf
Slide 35: Client segmentation: trading platforms
We strive to serve the specific needs of our clients by designing tailored solutions for distinct client groups. Client Enhanced service models Specialized capabilities Trading platforms International Segmentation We craft differentiated experiences for key Traders are a highly engaged client …and w
Slide 36: Client segmentation: international
We strive to serve the specific needs of our clients by designing tailored solutions for distinct client groups. Client Enhanced service models Specialized capabilities Trading platforms International Segmentation We craft differentiated experiences for key Clients outside of the U.S. have access to
Slide 37: Brilliant basics: easier to do business with us
Making it easier for our clients to do business with us is key to their long-term loyalty and willingness to refer others to Schwab. Brilliant Digital client workflows Access when & where clients need it Basics We believe in delighting our clients with exceptional experiences across every interactio
Slide 38: Brilliant basics: digital client workflows
Making it easier for our clients to do business with us is key to their long-term loyalty and willingness to refer others to Schwab. Brilliant Digital client workflows Access when & where clients need it Basics We believe in delighting our clients Our enhanced Schwab Advisor Center trading experienc
Slide 39: Brilliant basics: Schwab Intelligent Assistant
Making it easier for our clients to do business with us is key to their long-term loyalty and willingness to refer others to Schwab. Brilliant Digital client workflows Access when & where clients need it Basics We believe in delighting our clients The Schwab Intelligent Assistant is a conversational
Slide 40: Clear path to continued long-term organic growth
Our relentless focus on serving investors’ needs creates a clear path to continued long-term organic growth. Wealth management and Annualized core NNA Ameritrade share of bank lending revenue growth rate wallet NNA opportunity opportunity Note: NNA = Net new assets. Charles Schwab Corporation 40
Slide 41: Ameritrade Integration Review
Ameritrade Integration Review Joe Martinetto Managing Director, Chief Operating Officer Charles Schwab Corporation 41
Slide 42: Final conversion event completed for Ameritrade clients
We recently completed our final conversion event and have now transitioned all Ameritrade clients to Schwab. We transitioned the remaining ~10% of Ameritrade We are on-track to complete clients in our final May ‘24 transition group, marking remaining integration-related work the completion of the la
Slide 43: Investments in Schwab's capabilities support integration and growth
We made significant investments in Schwab’s capabilities to support integration and fuel long-term growth. The investments we made in Schwab’s capabilities Converted clients are benefiting created a relatively smooth conversion experience for from these capabilities and actively clients, and has set
Slide 44: Advisor Services
Advisor Services Bernie Clark Managing Director, Head of Advisor Services Charles Schwab Corporation 44
Slide 45: Advisor Services committed to the RIA industry
Advisor Services is committed to the RIA industry and its continued success and evolution. Our pledge to RIAs is resonating. The industry is evolving. We are uniquely positioned to address that evolution. We continue to invest in our platform and services to support independent advisors of all sizes
Slide 46: Our pledge to the independent advisor community
Our pledge to the independent advisor community is our commitment to every client we serve. Industry-leading custody services, with no AUM minimums, no custody fees – and no intention to implement them Best-in-class technology and open architecture, including a rapidly growing network of third-p
Slide 47: Advisor Services is in a position of strength
Advisor Services is in a position of strength and remains a driving force for Schwab. 47% of Schwab’s total assets $4.3T in Client Assets 1 under custody1 $53B in Core Net New Assets YTD 1 of Schwab’s total 15K+ Advisory Firms1 23% revenue 1Q24 Note: Q = Quarter. T = Trillion. B = Billion. K = Thous
Slide 48: Since conversion, service performance continues to improve
Since conversion, service performance continues to improve. Conversion 419 service professionals hired Preparation 40,000+ hours of training Post-Conversion 46 listening posts to capture client feedback Client Sentiment 4,300+ pieces of client feedback received 3 Client Experience Brilliant Basics F
Slide 49: RIAs are the fastest growing category in U.S. wealth management
RIAs are the fastest growing category in U.S. wealth management, with significant room for continued growth. With $4T+ in assets, Schwab continues to be a leader with RIAs, which currently comprises 1/3 of advisor channel assets. U.S. Retail Advised Market Assets5 2026E3 2022 +7%4 With RIA channel a
Slide 50: Five key trends influencing the RIA industry
Five key trends are influencing the RIA industry. Expanding Upmarket Differentiating Outsourcing Joining vs Starting Blurring the Lines RIAs are expanding RIAs seek to differentiate RIAs are increasingly RIAs are increasingly The lines between advisor upmarket with value- through customized & outsou
Slide 51: RIAs increasingly joining vs starting an independent RIA
RIAs are increasingly joining vs starting an independent RIA. Expanding Upmarket Differentiating Outsourcing Joining vs Starting Blurring the Lines RIAs are expanding RIAs seek to differentiate RIAs are increasingly RIAs are increasingly The lines between advisor upmarket with value- through customi
Slide 52: Increase in percentage of assets coming from join deals
We continue to see an increase in the percentage of assets coming from join deals. Source of Advisors in Transition (# of AIT deals) AIT Deals: Joins vs. Starts (% of est. SSO $) 231 230 301 392 357 317 7% 7% 5% 6% 6% 9% 7% 9% 7% 7% Starts 10% 8% Other Joins 22% 24% 60% 56% 30% 29% 65% 33% 75% 73% 4
Slide 53: Traditionally, the independent model was straightforward
Traditionally, the independent model was straightforward; advisors sought independence by creating or joining an RIA. Historically, advisors entered the RIA channel …and the RIA custody model was simpler with the RIA, by moving across the spectrum,… advisor, and custodian serving the end-client. RIA
Slide 54: RIAs growing increasingly complex with new providers
More recently, RIAs are growing increasingly complex as providers enter the industry offering new paths to independence. The RIA model is much more complex now, with new entrants and evolving providers. RIA Custodian Holding Private Companies Equity Wealth RIA Tech Network Corp End-Clients RIAs TAMP
Slide 55: 2024 focus: make it easier for advisors to operate
Our 2024 focus is to continue to make it easier for advisors to operate their businesses and navigate the industry. Scale & Efficiency Brilliant Basics Enhance Trading and Enhance and Evolve Digital Data Delivery Platforms Client Platforms Digital Channel Enhance Client-Facing Simplification Employe
Slide 56: Helping independent advisors grow, compete, and succeed
Helping independent advisors of all sizes grow, compete, and succeed is our why. Charles Schwab Corporation 56
Slide 57: Retail Investor
Retail Investor Jonathan Craig Managing Director, Head of Investor Services and Marketing Charles Schwab Corporation 57
Slide 58: Retail has achieved significant size through Clients' Eyes
By seeing “Through Clients’ Eyes”, Retail has achieved significant size while serving a broad set of clients,… Schwab Retail at a glance1 $4.1T in Client Assets | 25M+ Active Brokerage Accounts | $601B in Managed Investing Assets2 | 4.6M Daily Average Trades Offering an extensive set of capabilities
Slide 59: Retail continues to deliver strong results
…and continues to deliver strong results in key areas. Despite a mixed macro environment,… …Retail continued to deliver strong results. Characterized by fluctuating investor confidence,… FY 2023 Q1 2024 60% % of investors citing it is a good time to invest1 Core NNA3 $99.2B $34.9B 50% 40% Q4’22 Q1’2
Slide 60: We have further enhanced our Retail offer
We have further enhanced our Retail offer,… WEALTH SOLUTIONS TRADING Enhanced Schwab Wealth Advisory™ Rolled out thinkorswim® (TOS) to Schwab Rolled out updates to Schwab Personalized Indexing™ Launched Schwab Trading Powered by Ameritrade™ Released streaming, SnapTicket®, and more Expan
Slide 61: Recognized as industry-leading
…which continues to be recognized as industry-leading. Ameritrade, now part Rated a Best Named Best Investing Named Best of Charles Schwab, Online Broker Platform Overall Customer Service ranked #1 for Satisfaction among DIY Investors Awarded by Investor’s Business Daily1 Awarded by U.S. News4 Award
Slide 62: Ameritrade conversion complete with strong engagement
The Ameritrade conversion is now complete and we are seeing strong engagement from transitioned clients. We converted all Ameritrade clients,… …who are demonstrating early adoption of Schwab’s offerings. ~13 million Bringing assets Retaining assets Retail accounts1 ~$60B inflows since conversion5 $
Slide 63: Priorities grounded in key client and industry trends
Looking forward, our priorities are grounded in key client and industry trends,... Convergence Bull Market Demand Personalization and is Here for Advice for Ease Customization Competitors’ capabilities Clients are increasingly Client expectations Clients expect are converging seeking wealth and arou
Slide 64: Our approach for 2024 and beyond
…that shape our approach for 2024 and beyond. Drive growth Deliver a differentiated with multi-lever segment experience acquisition model Deepen client relationships Build easy and intuitive with advice and enhanced experiences for our bank lending clients and reps Charles Schwab Corporation 64
Slide 65: Multi-lever acquisition model drives asset and household growth
Drive growth with multi-lever acquisition model We are positioned to drive strong asset and new household growth,… Our multi-lever acquisition model is a key driver of our client and asset growth Personal Marketing Workplace Referrals Relationships Efficient marketing deployed Live channels optimize
Slide 66: Importance of client segmentation
Deliver a differentiated segment experience …emphasize the importance of client segmentation,… U/HNW represents a majority of Retail assets Trader segment is a growing revenue driver Schwab Retail assets only, split by wealth tier1 Schwab revenue, split by trading-related2 vs other3 25% 10% IS tradi
Slide 67: Deepen relationships with advice and enhanced bank lending
Deepen client relationships with advice and enhanced bank lending …deepen client relationships by meeting client needs for advice and enhanced bank lending,… Wealth & Investment Solutions Bank Lending PAL® and Mortgage + HELOC balances, 2019 and 20235 Significant Lower Client Higher CAGR Opportunity
Slide 68: Easy and intuitive experiences for clients and reps
Build easy and intuitive experiences for our clients and reps …and deliver easy and intuitive experiences for our clients and reps. We will enrich our clients’ digital experience,… …and enhance internal capabilities to drive scale. Navigation improvements DocuSign® Expand rollout to deploy Managed
Slide 69: Retail remains well-positioned with significant opportunity for growth
In summary, the Retail business remains incredibly well-positioned with significant opportunity for growth. Schwab is well positioned as a Retail leader,… …with significant opportunity ahead. Scale player,… Growing Retail market2 Small share of Retail market3 25M+ Accounts1 $4.1T Assets1 …serving in
Slide 70: Trader
Trader James Kostulias Managing Director, Head of Trading Services Charles Schwab Corporation 70
Slide 71: Investing in our diverse, growing trader client base
We are investing in our offering for Schwab’s diverse, growing, and highly-engaged trader client base,… Our broad spectrum of ..has expanded over recent …and drives a meaningful traders… years… share of Retail results.1 A client and prospect base with wide-ranging experience: Acquisition of 7.8x Ame
Slide 72: Schwab Trading Powered by Ameritrade offering
…supported by our Schwab Trading Powered by AmeritradeTM offering. An extensive set of Education and Specialized trader trading products content for clients service and and platforms of all skill levels relationships A focus on risk management in collaboration with clients, providing them with tools
Slide 73: thinkorswim platforms offer a best-in-class set of tools
Our suite of thinkorswim® platforms offer traders a best-in- class set of tools, experiences, and resources. A full suite of platforms 220K+ Available on Desktop, Mobile, and Web legacy Schwab households have used thinkorswim since October 2023 launch Powerful tools 40%+ News, research, analysis, an
Slide 74: Enhanced education and news
We enhanced our education and news, helping investors and traders of all experience levels reach their goals. Market News and Education and Coaching Perspective An extensive self-service digital experience (web, mobile and desktop) with courses, articles, podcasts, videos, learning paths, and more S
Slide 75: Dedicated support and relationships for traders
We offer dedicated support and relationships just for traders. Expert support from Relationships available with One-on-one platform and dedicated and experienced Trader Financial Consultants, trading strategy consultations Trader Service teams through providing high-level with Trading Solutions team
Slide 76: Opportunities to grow relationships with trader clients
Looking ahead, we see opportunities to grow relationships with new and existing trader clients. Acquire and retain Introduce legacy Schwab Deepen relationships with relationships with traders clients to the combined legacy Ameritrade trader of all experience levels trading offer clients Further inve
Slide 77: International Services
International Services Lisa Hunt Managing Director, Head of International Services Charles Schwab Corporation 77
Slide 78: International Services delivers the best of Schwab globally
Our International Services business delivers the best of what Schwab has to offer to investors globally. In-Market Presence Our global capabilities allow us to proactively engage with and provide non-U.S. resident clients the opportunity to diversify their portfolios in the U.S. capital markets. Not
Slide 79: Schwab's no trade-offs approach has resonated with clients
Schwab’s “no trade-offs” approach has resonated with our clients. International is a scale business that attracts a …that will continue to contribute to growth. highly-engaged set of clients… 53% have over half their investments 4-year CAGR outside of their country of residence 80%+ consider Schwab
Slide 80: Well-positioned to extend our value proposition globally
We are well-positioned to extend our value proposition across the globe. …we have an opportunity to capitalize on increased By focusing on our strategy,... demand for access to U.S. capital markets. • Proactive prospect and client outreach in • $300T+ (~70%) of global wealth exists outside targeted
Slide 81: Products and services align with strategic priorities
Our products and services meet client needs and align with the strategic priorities of the company. Scale and Efficiency Win–Win Monetization Client Segmentation Brilliant Basics Digital content and Schwab Trading Differentiated Best-in-class service 24 education in multiple Powered by experience fo
Slide 82: Looking beyond 2024: improve client experience
Looking beyond 2024, we aim to continue to improve the client experience to support the growth of the company. PRODUCTS TRADING CLIENT EXPERIENCE Expansion of Managed Rollout of thinkorswim® to Live education sessions in local Investing with the roll out of Schwab languages SAN® and MAS® to 53
Slide 83: Client Acquisition and Marketing
Client Acquisition and Marketing Stacy Hammond Managing Director, Chief Marketing Officer Charles Schwab Corporation 83
Slide 84: Marketing is a strong contributor to our growth
Marketing is a strong contributor to our growth across business lines and remains central to our continued success. We will continue to support We connect with audiences and …while leveraging deep client growth, increase engagement, communicate our value through a insights and clear design targets t
Slide 85: Multi-lever and diversified strategy for retail growth
We use a multi-lever and diversified strategy for retail growth. Each lever plays a unique and complementary role in our strategy. Efficient marketing deployed against clear Consistently delivers ~40% of new design targets clients1 Live channels optimized to engage high-value Average funding via Bra
Slide 86: Efficient marketing engine delivers synergies
A strong value proposition paired with an efficient marketing engine allows us to deliver synergies without compromising outcomes. Combining the strength of both Reduced marketing expenditure to Since the acquisition, we have companies fuels growth by achieve synergy achieved significant marketing c
Slide 87: We measure to improve outcomes and drive efficiency
We measure to improve outcomes and drive efficiency. Multi-touch Attribution Marketing Mix Optimization Data Driven Targeting A model that optimizes marketing Econometric model that predicts Statistical models and machine spend and return-on-investment the impact of marketing and non- learning used
Slide 88: Deep client insight to deliver industry-leading creative
We use deep client insight to deliver industry-leading creative. Schwab Trading Powered Schwab Investing ThemesTM Schwab’s Podcasts by AmeritradeTM Break-through creative Bold and engaging creative in Bring clients engaging stories, launched our best-in-class high profile and unexpected news,
Slide 89: We innovate to connect with investors in new ways
We innovate to connect with investors in new ways. Charles Schwab Challenge IMPACT The tournament is an activation- An event designed to centric sponsorship that elevates demonstrate our commitment the event for players and to the advisor industry while attendees and creating a client championing in
Slide 90: In summary
In summary. We continue to We continue our We continue to operate as an efficient focus on innovation, optimize our marketing machine, creativity and acquisition levers delivering synergies measurement to to unlock future without compromise to drive outcomes growth outcomes Charles Schwab Corporatio
Slide 91: Wealth and Advice Solutions
Wealth and Advice Solutions Neesha Hathi Managing Director, Head of Wealth and Advice Solutions Charles Schwab Corporation 91
Slide 92: A sophisticated array of wealth, advice, and investing solutions
Schwab offers a sophisticated array of wealth, advice, and investing solutions. Wealth & Advice Solutions meets investor and advisor needs across the wealth spectrum Wealth Management Third-Party Products Advice Solutions Specialists Schwab Wealth Advisory™ Financial Planning Mutual Funds Schwab Adv
Slide 93: Strong momentum as clients look to Schwab for wealth management
We have seen strong momentum as clients look to Schwab to meet their wealth management needs. Increasingly, investors are looking to Our scale and expertise enable us to serve clients Schwab for holistic wealth management. in the way they want to be served. Schwab Wealth Schwab Advisor Advisory™ Net
Slide 94: Demand expected to grow, influenced by specific trends
Looking ahead, we expect demand to continue to grow, influenced by specific trends. \ Growing demand More investors are Greater interest in Increasing demand More RIAs looking for wealth seeking and holistic advice for alternative to scale via management willing to pay for ways to invest outsourcing
Slide 95: Significant opportunity to serve more wealth management needs
Fueled by these trends, Schwab has a significant opportunity to serve more wealth management needs. Our Advice Solutions are generating a Our momentum is building with investors— The opportunity to grow Schwab’s share of the growing portion of our AMAF revenue. across both Schwab and legacy Ameritra
Slide 96: Investing across the wealth spectrum
We are investing across the wealth spectrum to deliver experiences for investors and advisors. Expand and elevate Improve the path to “Supercharge” our Enable and scale RIA wealth experiences advice professionals growth Schwab Wealth Advice platform Institutional no- Advisory™ including Easy enrollm
Slide 97: Investments fortify Schwab's position to win in wealth
These investments will fortify Schwab’s already exceptionally strong position to win in wealth. Trusted brand Value Digital + Human One-Stop-Shop Every Life Stage Charles Schwab Corporation 97
Slide 98: Financial Perspectives
Financial Perspectives Peter Crawford Managing Director, Chief Financial Officer Charles Schwab Corporation 98
Slide 99: Client focus has fueled our diversified, all-weather model
Our consistent focus on clients has fueled our diversified, all-weather model,… Premier Asset Diversified Gatherer Revenue Model Clients First, No Matter What Opportunistic Disciplined Expense Capital Return Management The core tenets of our model remain consistent through-the-cycle. Charles Schwab
Slide 100: Strong performance across a range of environments
…enabling strong performance across a range of environments. 20+ Years of Growth 2003 – 2023, CAGR1 Macroeconomic Client-Focused Backdrop Actions 12% 9% Value-oriented pricing across our offering to clients: Total Client 2+ rate cycles Net Revenues – $0 commission equity Assets 2008 financial
Slide 101: Commitment to investors deepens loyalty and asset growth
Our commitment to investors has deepened loyalty and trust, enabling sustained client asset growth through-the-cycle. We have a track record of disrupting the industry and In return, our clients reward us with their business. developing new products to meet our clients’ needs. Total Client Assets, 1
Slide 102: Diversified model delivers results across economic conditions
Powered by sustained success with clients, our diversified model delivers financial results across a variety of economic conditions. Revenue Type Drivers Key Components Revenue Mix Over Time (%) Cash-based Fee-based Investment Portfolio Interest Rates Engagement-based Other Bank Lending Cash-b
Slide 103: Financial discipline supports pre-tax margin expansion
Schwab’s financial discipline supports pre-tax margin expansion across a range of environments. Throughout our history, we have exercised discipline in knowing when to “flex” Balanced Approach to and when to push forward. Expense Management Average Pre-tax Profit Margin and EOCA (bps) PTPM Adjusted
Slide 104: Thoughtful capital management facilitates growth and capital return
Thoughtful capital management facilitates growth plus opportunistic capital return through-the-cycle. Capital Management Framework Target 6.75% – 7.00% Operating Consolidated Adjusted Objective Tier 1 Leverage Ratio1 Support growth of business Go-forward consolidated objective generally in-line wi
Slide 105: Core principles for balance sheet management
Our core principles for balance sheet management remain relatively consistent through-the-cycle. Lending activity focused on current clients and heavily Future Considerations Limited collateralized by securities or homes Continuing to analyze a variety of Credit Risk Security selection prioritiz
Slide 106: NIM approaching 3.00% before end of 2025
We continue to see our NIM approaching 3.00% before the end of 2025. Illustrative NIM vs. Fed Dot Plot1 5.50% Select Assumptions April 2024 Fed Dot Plot 4.00% Cash realignment continues to decelerate in 2024 and we pay 3.00% down supplemental borrowings Following the pay down, longer- term NIM
Slide 107: Expected 2024 exit growth in adjusted quarterly earnings
We expect to exit 2024 with Y/Y growth in adjusted quarterly earnings1 at the upper-end of the 20% to 30% range2. Controllable costs remain contained within initial expectations, while certain factors are helping push expenses above prior “no growth” projections – Items such as the additional FDIC
Slide 108: On a path back towards long-term growth and earnings potential
As momentum continues to build, we remain on a path back towards Schwab’s long-term growth and earnings potential. Premier Asset Diversified Disciplined Expense Efficient Utilization Gatherer Revenue Model Management of Capital Competitive position in the Business model that combines Ability t
Slide 109: Institutional Investor Day
Institutional Investor Day May 22, 2024
Slide 110: Appendix
Appendix Charles Schwab Corporation 110
Slide 111: Retail Disclosures
Retail Disclosures From Investor's Business Daily, January 25, 2024, © 2024 Investor's Business Daily, LLC. All rights reserved. Used with permission and protected by the Copyright Laws of the United States. The printing, copying, redistribution or retransmission of this Content without express perm
Slide 112: Non-GAAP Introduction
Appendix Non-GAAP Introduction In addition to disclosing financial results in accordance with generally accepted accounting principles in the U.S. (GAAP), this presentation contains references to the non-GAAP financial measures described below. We believe these non-GAAP financial measures provide us
Slide 113: Non-GAAP Reconciliation: Adjusted total expenses and net income
Appendix Non-GAAP Reconciliation: Adjusted total expenses and Adjusted net income Three Months Ended, March 31, 2024 June 30, 2023 Total Expenses Total Expenses (In millions, except ratios and per share amounts) Excluding Interest Net Income Excluding Interest Net Income Total expenses excluding int
Slide 114: Non-GAAP Reconciliation: Adjusted total expenses and net income, twelve months
Appendix Non-GAAP Reconciliation: Adjusted total expenses and Adjusted net income Twelve Months Ended, December 31, 2023 December 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 Total Total Total Total Total Expenses Expenses Expenses Expenses Expenses (In millions, except ratios and
Slide 115: Non-GAAP Reconciliation: Adjusted pre-tax profit margin
Appendix Non-GAAP Reconciliation: Adjusted income before taxes on income and Adjusted pre-tax profit margin Twelve Months Ended, December 31, 2023 December 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 % of % of % of % of % of (In millions, except ratios and Total Net Total Net Tota
Slide 116: Non-GAAP Reconciliation: Adjusted diluted EPS
Appendix Non-GAAP Reconciliation: Adjusted net income to common stockholders and Adjusted diluted EPS Three Months Ended, December 31, 2023 (In millions, except ratios and per share amounts) Amount Diluted EPS Net income available to common stockholders (GAAP), Earnings per common share — diluted (G
Slide 117: Non-GAAP Reconciliation: Adjusted Tier 1 Leverage Ratio
Appendix Non-GAAP Reconciliation: Adjusted Tier 1 Leverage Ratio Three Months Ended, March 31, 2024 (In millions, except ratios and per share amounts) CSC CSB Tier 1 Leverage Ratio (GAAP) 8.8% 10.4% Tier 1 Capital $ 41,598 $ 31,944 Plus: AOCI adjustment (17,568) (15,297) Adjusted Tier 1 Capital 24,0
Slide 118: Institutional Investor Day
Institutional Investor Day May 22, 2024