Schwab Reduces Online Equity Commissions Lower-Cost Access to Full Breadth of Schwab Services and Research SAN FRANCISCO, Feb. 4 /PRNewswire-FirstCall/ -- Charles Schwab & Co., Inc. today announced a 35 percent reduction of its online equity commission for domestic retail investors with household assets(1) of between $50,000 and $1 million with Schwab. The new $12.95 trade price(2), reduced from $19.95, is effective February 8. "We've said we will be relentless about creating the best value for individual investors," said Chairman and Chief Executive Officer Charles R. Schwab. "This change is especially important for the center and heart of the investing population -- those investors with assets between $50,000 and $1 million. Our intention is to ensure that price isn't a barrier to the superior research, tools, service, and advice that are available to them only at Schwab." The new pricing also applies to clients who trade 9-29 times a quarter (36-119 times a year). The new pricing increases the affordability of Schwab's extensive offering of brokerage services and industry-leading research: -- Equity research -- at-a-glance snapshots and in-depth analyses that incorporate multiple third-party opinions as well as Schwab's own point of view (through Schwab Equity Ratings(R)) -- Mutual fund research -- analysis of over 10,000 mutual funds as well as a quarterly-updated selection of Schwab's view of the leading no-load no-transaction-fee funds available through Schwab -- State-of-the-art portfolio monitoring and performance tracking -- Personalized portfolio advice and in-person access to Schwab financial consultants -- 280 branch offices throughout the U.S. -- Specialized trading consultants and access to StreetSmart Pro, Schwab's premiere trading platform for active traders -- Access to a complete range of investment and Schwab Bank products -- 24x7 telephone service Active traders at Schwab who make at least 30 equity or option trades per quarter, or 120 trades over the prior 12 months, will continue to pay only $9.95 per online equity trade for unlimited shares. Clients with more than $1 million in household assets at Schwab will also continue to pay the same low flat rate. Clients with less than $50,000 in household assets or fewer than 9 trades per quarter will continue to pay $19.95 per online equity trade for the first 1,000 shares (plus $0.15 per share for each additional share). Schwab Institutional, which provides custodial, operational and trading support for approximately 5,000 independent fee-based investment advisors with $348 billion in client assets at Schwab, expects to roll out a comparable pricing model in the second quarter for advisors' clients who enroll in electronic delivery of client reports. Enhanced Delivery of the Industry-Recognized Schwab Equity Ratings Schwab also announced that Schwab Independent Investing Signature(TM) clients are now eligible to receive a comprehensive Quarterly Portfolio Profile that highlights sector and equity concentration, current vs. target asset allocation, as well as performance ratings on each security in their portfolio, including the Schwab Equity Rating on each stock they hold. A re-designed account page on schwab.com, which will soon be available to all clients, will also show the Schwab Equity Rating on the stocks held in each client account. "Our objective is to help our clients achieve the best investment outcomes possible, and that means great tools and services that cover the entire investing process, from setting objectives to selecting investments to monitoring performance and making adjustments over time," said William Atwell, executive vice president of Schwab's Individual Investor enterprise. "We want to make sure our clients have a clear picture of how their investments are doing -- as well as the right advice to help them at every step along the way." Schwab Equity Ratings are available exclusively to Schwab clients. In January, Schwab's model equity portfolio, based on Schwab Equity Ratings, took first place for the second consecutive year in a ranking by Zack's Investment Services of the three-year stock-picking performance of a number of well-known brokerage firms. Schwab's portfolio took first place for the three-year period 2002-2004, producing substantially greater returns than any of the 13 competing brokerages. For the three-year period ended December 31, 2004, Schwab's picks returned 53%, compared to the S&P's 11% and the second place winner's 31%. Schwab took first place in the same category last year, returning 18.3% for the 2001-2003 period compared to a 12% drop in the S&P 500. Schwab Equity Ratings also drive the selection of the 30 stocks on Schwab's Composite List, available on schwab.com, which as a model portfolio has outperformed the broad market in 59 out of the past 60 rolling 52-week periods as of January 3, 2005.(3) For more information on Schwab Equity Ratings, including performance details, how performance was calculated, comparison of performance to benchmarks and limitations of model performance, visit http://www.schwab.com/serperformance. "In addition to Schwab Equity Ratings, we also offer a full menu of independent third-party research," noted Atwell. "But the truth is that investors are interested in Schwab's opinion, and they want an actionable point of view that's relevant to them, more than sheer volume of research opinions." Financial Considerations The Charles Schwab Corporation believes that the pricing changes described above will enhance its value proposition and competitive position, and result in the consolidation of client assets and trades at Schwab. While the actual timing and extent of any such consolidation is uncertain, management estimates that these pricing changes could reduce consolidated revenues by approximately 1 percent from current levels during the 12-month period following implementation. Schwab Chief Financial Officer Christopher Dodds commented, "We are continuing to focus on delivering better value for our clients by improving productivity and reducing costs, and we remain committed to our 2005 objectives of a 25 percent pre-tax operating profit margin and a return on stockholders' equity of at least 15 percent." Forward Looking Statements This press release contains forward-looking statements relating to client assets, trading and revenues, as well as pre-tax operating profit margin and return on stockholders' equity. These statements reflect management's current expectations and objectives, the achievement of which is subject to certain risks and uncertainties that could cause actual results to differ from the expressed expectations and objectives. These risks include, but are not limited to, the Company's ability to accurately assess the elasticity of client demand for trading services and the effect of pricing changes on client acquisition, retention and asset levels; a sustained decline in securities prices, trading volumes and investor confidence from recent levels; the company's ability to meet its expense plans; and other risks set forth in the Company's most recent 10-Q. New Pricing Schedule (Effective February 8, 2005) Commissions for Executed Online Equity Trades Number of less than $50,000 to $1 million or household $50,000 in $999,999 in more in trades per household assets household assets household assets quarter 8 or fewer $19.95 for the $12.95 for the $9.95 unlimited first 1,000 first 1,000 shares, plus shares, plus $.015 cents per $.015 cents per share thereafter share thereafter 9 to 29 $12.95 for the $12.95 for the $9.95 unlimited first 1,000 first 1,000 shares, plus $.015 shares, plus $.015 cents per cents per share thereafter share thereafter 30 or more $9.95 unlimited $9.95 unlimited $9.95 unlimited Previous Pricing Schedule Commissions for Executed Online Equity Trades Number of less than $100,000 to $1 million or household $100,000 in $999,999 in more in trades per household assets household assets household assets quarter 8 or fewer $19.95 for the $19.95 for the $9.95 unlimited first 1,000 first 1,000 shares, plus shares, plus $.015 cents per $.015 cents per share thereafter share thereafter 9 to 29 $19.95 for the $19.95 for the $9.95 unlimited first 1,000 first 1,000 shares, plus shares, plus $.015 cents per $.015 cents per share thereafter share thereafter 30 or more $9.95 unlimited $9.95 unlimited $9.95 unlimited About Charles Schwab The Charles Schwab Corporation (NYSE / Nasdaq: SCH), through its operating subsidiaries, provides securities brokerage and financial services to individual investors and the independent investment advisors who work with them. With over 7 million individual investor accounts and more than $1 trillion in client assets, The Charles Schwab Corporation is one of the nation's largest financial services firms. Its subsidiary Charles Schwab & Co., Inc. (member SIPC) provides a complete range of investment services and products, including an extensive selection of mutual funds; financial planning and investment advice; retirement plans; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent fee-based investment advisors through its Schwab Institutional division. Its subsidiary Charles Schwab Bank (member FDIC) provides banking and mortgage services and products. The corporation's other operating subsidiaries include U.S. Trust Corporation (member FDIC) and CyberTrader(R), Inc. (member SIPC). These companies' Web sites can be reached at http://www.schwab.com/, http://www.schwabbank.com/, http://www.ustrust.com/, and http://www.cybertrader.com/. Brokerage products: Not FDIC insured. No Bank Guarantee. May Lose Value. Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges, and expenses. You can request a prospectus by calling Schwab at 1-800-435-4000. Please read the prospectus carefully before investing. Investment value will fluctuate, and shares, when redeemed, may be worth more or less than original cost. (1) "Household assets" are the aggregate balance of accounts of a household that meet Schwab's householding guidelines (generally, accounts of clients with the same last name, or who are related, who reside at the same home address). (2) The $12.95 rate applies to the first 1,000 shares (plus $.015 for each additional share). (3) Limitations of Model Performance For all 3 model performance results (Barron's, Composite List, and SER Cohort), there are inherent limitations which investors should understand. Simulated results do not represent actual investment performance or trading and do not indicate what returns would actually have been realized by relying on Schwab Equity Ratings or any stock list or model mentioned. The results may have under- or over-compensated for the impact, if any, of certain market factors, such as limited trading liquidity. The results presented reflect past performance and should not and cannot be viewed as an indicator of future performance or an indicator of results which any investor will realize. Schwab Equity Ratings and the lists or models mentioned are not personal recommendations for any particular investor and do not take into account the financial, investment or other objectives and may not be suitable for any particular investor. Before buying, investors should consider whether the investment is suitable for themselves and their portfolio. Additionally, investors should consider any recent market or company news. Stocks can be volatile and entail risk and individual stocks may not be suitable for you. The Schwab Composite Stock list is updated weekly. The performance assumes a hypothetical investor purchased all stocks appearing on the Composite Stock list for that week. The 52 week performance for each Composite Stock List is calculated as the equal weighted average of all the simple total returns associated with each stock in that Composite Stock List. The Broad Market is represented by the S&P 500 index, a capitalization weighted index of the largest 500 companies from leading industries. For additional information about the Zack's competition, as reported by Barron's, visit http://www.schwab.com/. For additional information about SER cohorts, visit http://www.schwab.com/public/schwab/advice_research/schwab_equity_ratings?cmsi d=P-362160&lvl1=advice_research&lvl2=schwab_equity_ratings DATASOURCE: Charles Schwab CONTACT: media, Sarah Bulgatz, +1-415-636-5940, or Glen Mathison, +1-415-636-5448, or investors, Rich Fowler, +1-415-636-9869, all for Charles Schwab & Co., Inc. Web site: http://www.schwab.com/

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