Managed Accounts: Expansive solutions for your clients. Greater opportunities for your business.

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1 Managed Accounts: Expansive solutions for your clients. Greater opportunities for your business.

2 Managed Accounts: Growing Opportunity. Assets in managed accounts continue to grow and are estimated to surpass $2 trillion in 2010, according to Cerulli Associates. 1 This may indicate significant opportunities for financial advisors who want to provide these accounts to their affluent clients. Schwab is well positioned to help advisors integrate managed accounts into their practices. We have been evolving and improving our Managed Accounts platform for more than a decade to make it responsive to advisors as you continue to serve your clients increasingly complex needs. The Managed Account Solutions platform may help you: Expand your business efficiently Access diverse professionally managed solutions and specialized investment managers Devote more time to serving existing clients and securing new ones Serve high net worth clients and those with sophisticated investment needs

3 Today, over one thousand independent advisors use Schwab s Managed Accounts platform, which is one of the largest and most flexible available to advisors. It offers a broad selection of Separately Managed Accounts, Multi-Strategy Portfolios, Turnkey Asset Management Programs and Unified Managed Accounts. Diverse Capabilities. One Contract. You can easily integrate managed accounts into your current business with Schwab s two single-contract offerings: Managed Account Select and Managed Account Access. Both of these programs: Save you time with streamlined account opening and maintenance processes a single application allows clients to hire multiple money managers Make it easy to generate performance reports for clients and summary reports for you Feature competitive fees (starting at 1% for equity strategies, 0.75% for ETF-based strategies, 0.65% for fixed-income and index-based equity strategies and 0.35% for Municipal Bond Ladder strategies) 2 Offer low minimum investments: $100,000 for most equity strategies, $250,000 for most fixed-income strategies Choose your level of research support: Managed Account Select Select is Schwab s most comprehensive managed account platform, providing you with high-quality research and analysis. You benefit from research and ongoing analysis from the experienced team at Charles Schwab Investment Advisory, Inc. (CSIA), an affiliate of Charles Schwab & Co., Inc. Analysts at CSIA evaluate money managers and investment strategies using a research process that factors in both quantitative metrics and qualitative assessments, ultimately striving to predict a given manager s future relative performance versus its peers. Once a manager s strategy is chosen for inclusion in Select, it continues to be monitored while on the platform. Managed Account Access Access, Schwab s flexible single-contract offering, allows you to work with a wide array of money managers and strategies. With Access, you can use Schwab s sophisticated web-based tools to conduct your own research on these managers and strategies, including: Equity and fixed-income separately managed accounts (SMAs) Specialty SMAs (e.g., index-based, natural resources, preferreds, and REITs) ETF-based strategies Municipal bond ladder SMAs from PIMCO Multi-strategy portfolios You can even request that Schwab add a money manager or strategy that is not presently in Access. The strategies and money managers in Access are not evaluated by CSIA or Schwab (although managers with strategies in Select may also have strategies in Access).

4 Total Flexibility. Total Control. With Schwab s Managed Account Marketplace, you can work directly with virtually any money manager you choose under separate contracts, while taking advantage of our brokerage and custody services. Neither Schwab nor CSIA evaluates these managers, making the research and due diligence up to you. Marketplace lets you negotiate directly with managers and choose from either transaction-based or asset-based pricing for Schwab s brokerage services. Choose from thousands of managers that already have relationships with Schwab or request that Schwab add a new money manager not currently on Schwab s platform. Optimize with TAMPs. Turnkey Asset Management Programs (TAMPs) can help you to streamline operations and provide high net worth clients with specialized services and product solutions. TAMPs can provide: Total portfolio solutions Manager research Turnkey outsourcing for proposals and portfolio accounting Performance reporting Schwab provides access to a range of third-party TAMP providers. 3 Simplify with UMAs. Schwab gives you access to Unified Managed Accounts (UMAs) as part of our TAMPs offering. UMAs allow you to combine a range of investment products in a single account, including SMAs, mutual funds and ETFs. Within a UMA you have the flexibility to define your own asset allocation and investments. UMAs can help you to meet client needs more effectively by: Providing customized investment portfolios with tax-aware overlay management Simplifying portfolio implementation, rebalancing and cash flow management Providing comprehensive client performance reporting quickly and easily UMAs are offered by Fortigent, LLC 4 and other third-party providers.

5 Customized proposals. Comprehensive information. Our Investment Proposal Center, powered by Informa, 5 makes it easy to conduct manager research and generate client-specific proposals that are customized for your firm and specific to your client. Using criteria you choose, you can research money managers and investment products for your clients by accessing vast databases of separately managed accounts, mutual funds and ETFs that have been provided by Informa and Morningstar. You also can compare your investment recommendations to industry benchmarks and import your own asset allocation models. Help from informed professionals. If you want more in-depth and personalized help with your managed account experience, call on Schwab s Managed Account Service Team or Investment Management Consulting Group (IMCG). 6 The Managed Account Service Team is dedicated to servicing managed accounts at Schwab and provides you with the following services: Answering questions regarding Schwab s managed account forms Assisting with operating procedures, including the opening of accounts and ongoing maintenance Supporting your use of managed account resources on schwabadvisorcenter.com Contact the Managed Account Service Team by calling or ing mastisg.si@schwab.com. Members of the IMCG are dedicated to providing you with customized services such as: Customized proposals that illustrate various potential investment solutions chosen by you for your clients Sharing information about money managers and strategies that IMCG members gain through their ongoing interactions with managers and industry experts Performing holdings-based analysis of managed accounts portfolios You can contact the IMCG by calling or manager.research@schwab.com. Schwab Advisor Center Schwab s comprehensive online resource for advisors gives you quick online access to everything you need to successfully integrate managed accounts into your practice. Visit schwabadvisorcenter.com.

6 Get started today. Contact Schwab Advisor Services to find out more about managed accounts. Current Schwab advisors can learn more about our Managed Account solutions at schwabadvisorcenter.com: News & Resources Products Managed Account Solutions or by calling your Relationship Manager. New to Schwab? Learn more by visiting schwabadvisorcenter.com/public or call Source: The Cerulli Edge, Managed Accounts Edition, Q1 2010, Projections issue. 2 Schwab s fee does not cover (i) certain costs or charges imposed by third parties, including odd-lot differentials, American Depositary Receipt fees, exchange fees and transfer taxes mandated by law; (ii) charges for certain special services, including periodic distribution fees, electronic funds and wire transfer fees, certificate delivery fees and reorganization fees; (iii) dealer markups and markdowns on fixed-income securities; and (iv) execution of transactions in securities by other broker-dealers. Please read Schwab s Schedule H brochure for important information and disclosures relating to Select and Access. 3 Schwab does not recommend or endorse any particular TAMP or money manager. Schwab is not affiliated with any of the TAMPs available on Schwab s TAMP platform. Schwab makes no representation or warranty about any TAMP or money manager, the quality or depth of its services, or its suitability for your clients. Services may vary depending on which money managers or TAMP provider you choose. Schwab does not guarantee the accuracy of the information about the services provided by particular TAMPs on the platform. 4 Fortigent is a registered trademark of Fortigent, LLC. Schwab does not endorse or recommend the UMAs provided by Fortigent or any other TAMP on Schwab s platform. Schwab and Fortigent are not affiliated. 5 The Investment Proposal Center ( IPC ) is provided by Informa Investment Solutions, Inc. ( Informa ), an independent financial services firm and a wholly owned subsidiary of Informa Financial Information, Inc. IPC is licensed from Informa by Schwab. Schwab and Informa are not affiliated. Information about each money manager ( MM ) available through the IPC is assembled by Informa from information prepared by the MM. The information about mutual funds and exchange-traded funds available through the IPC is assembled by and is the proprietary information of Morningstar, Inc., an independent financial services firm ( Morningstar ). Through the IPC, Schwab merely is providing you with access to information assembled by Informa or Morningstar and is not itself providing this information. None of the information available through the IPC constitutes an offer, recommendation or solicitation to purchase or sell any particular security or a recommendation to use a particular MM or investment product. 6 Neither Schwab nor Investment Management Consulting Group analysts provide advice or recommendations regarding managed accounts or money managers to investment advisors or their clients Charles Schwab & Co., Inc. All rights reserved. Member SIPC. Schwab Advisor Services serves independent investment advisors and includes the custody, trading and support services of Charles Schwab & Co., Inc. ( Schwab ). Independent investment advisors are not owned by, affiliated with or supervised by Schwab. ( ) MKT (07/10)