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U.S. Branch Representatives

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U.S. Branch Representatives

VP—Financial Consultants

What they do — VP-Financial Consultants work with clients both in person (through our U.S. branch office locations) and by phone. They develop new and existing client relationships, generally using a planning-based approach to understand a client's needs and objectives. They provide guidance to help clients select the appropriate products—including investments, banking, and insurance—that meet client objectives. Each Financial Consultant supports a practice, which includes clients who are assigned to that Financial Consultant as a primary point of contact. Financial Consultants may also assist clients who are not in their practice.

Compensation — Financial Consultants receive a base salary for serving clients. In addition, there are two primary sources of compensation: Service Pay and Solutions Pay. Financial Consultants may also be eligible to participate in a Career Achievement Award Program, which rewards and retains our top talent for being dedicated to Schwab and our clients.

Financial Consultants may give financial planning and investment advice to some of their clients. Although Schwab as a company may earn more or less revenue depending on the investment product or portfolio management service a Financial Consultant recommends, we have designed their compensation based on the time, complexity, and expertise necessary to understand, recommend, and provide ongoing service to a client for different categories of investment products and portfolio management services.

Service Pay

Service Pay compensates a Financial Consultant for maintaining relationships with and providing service to clients in their practice. Compensation is divided into three categories. The first two have different asset multiplier rates which reflect the time, complexity and expertise associated with recommending and servicing accounts in each category (“compensation factors”). Category 1 covers fee-based portfolio management services, Category 2 covers portfolio management referrals, and non-managed accounts.

We aggregate within each of these two categories a range of advisory programs or investment products that are similar in terms of complexity and the time, on average, it is expected to take a Financial Consultant to work with a client. We do this to guard against a Financial Consultant having undue incentives when giving investment advice. Service Pay applies whether a Financial Consultant recommended or sold the product or service to the client or the client made the purchase or enrollment decision on his or her own.

The rates differ based on the compensation factors noted above. So if clients are invested in one category versus another, a Financial Consultant can receive more compensation, as the tables below demonstrate. Financial Consultants are eligible to receive 6%, 7%, 8%, or 9% of the amount resulting from application of the asset multiplier rate depending on a Financial Consultant’s professional experience and past work performance.

The third category of Service Pay is for non-investment advice activities. These include credit products.

Service pay based on account balances

  • Category 1: Portfolio Management Services

    (typically have more involved ongoing service needs):

    Annual Service Pay per $100,000 of client balances (depending on whether the Financial Consultant's payout is 6%, 7%, 8%, or 9%)

    Schwab Private Client™

    The Asset Multiplier Rate for Category 1 is 66.3 basis points, which is multiplied by a Financial Consultant’s particular payout rate.

    This results in a payment of :

    $39.78 ($100,000 x .00663 x .06),

    $46.41 ($100,000 x .00663 x .07),

    $53.04 ($100,000 x .00663 x .08), or

    $59.67 ($100,000 x .00663 x .09)

    Schwab Managed Portfolios™

    Schwab Managed Account Services™ (which includes ThomasPartners® Strategies, Windhaven® Strategies, Charles Schwab Investment Management Separately Managed Accounts, Diversified Portfolios, and Third-Party Managers)

    Variable Annuities and Fixed Indexed Annuities

  • Category 2: Portfolio Management Referrals

    (typically have less involved ongoing service needs):

    Annual Service Pay per $100,000 of client balances (depending on whether the Financial Consultant's payout is 6%, 7%, 8%, or 9%)

    Schwab Advisor Network®

    The Asset Multiplier Rate for Category 2 is 18.9 basis points, which is multiplied by a Financial Consultant’s particular payout rate.

    This results in a payment of:

    $11.34 ($100,000 x .00189 x .06),

    $13.23 ($100,000 x .00189 x .07),

    $15.12 ($100,000 x .00189 x .08), or

    $17.01 ($100,000 x .00189 x .09)

    Schwab Intelligent Portfolios®

    Schwab Intelligent Portfolios Premium™

    Schwab Personal Trust™

    All security holdings and asset categories are treated the same: stocks, bonds, mutual funds, ETFs, cash (including bank deposits), options positions, and 529s.

  • Category 3: Non-Investment Advice Products and Activities

    Annual Service Pay per $100,000 of client balances (depending on whether the Financial Consultant's payout is 6%, 7%, 8%, or 9%)

    Margin loans

    Financial Consultants receive a payment of 4.4 bps per $100,000 of client loan balance. This results in a payment of $44 per $100,000 loan. ($100,00 x .00044)

    Schwab Bank Home Equity Line of Credit (HELOC)

    Schwab Bank Pledged Asset Line® (PAL)

When a client in a Financial Consultant's practice is enrolled in a participating portfolio management service and receives a refund of their program fee under the Schwab Satisfaction Guarantee™, Schwab will debit the amount of Service Pay the Financial Consultant receives by a percentage of the amount of the fee refunded.

Solutions Pay

Solutions Pay compensates a Financial Consultant for attracting new clients and assets to Schwab and matching client needs with appropriate products and portfolio management services. It is a one-time payment and applies whether a Financial Consultant recommends a product or service or the client makes the purchase or enrollment decision on his or her own. The exceptions are for Schwab Intelligent Portfolios® and Schwab Intelligent Portfolios Premium™, which the Financial Consultant must successfully recommend in order to receive Solutions Pay.

Category 1, asset consolidation, pays the same rate no matter what investment product a Financial Consultant might recommend or a client might purchase on his or her own. Category 2, portfolio management services, pays the same rate no matter which service a Financial Consultant might recommend. The different rates paid between Category 1 and Category 2 are based on the additional time, complexity, and expertise necessary to assess a client's needs and recommend one of our portfolio management services. Category 3, other products, includes activities in which a Financial Consultant is not providing investment advice. Generally, if assets leave a Financial Consultant's practice, that loss is netted against asset gains to a Financial Consultant’s practice for purposes of calculating Solutions Pay.

Solutions Pay is paid to the Financial Consultant monthly.

  • Category 1: Asset Consolidation

    Financial Consultant's Compensation¹

    One-Time Solutions Pay

    Net Asset Flows (total inflow of client assets minus the total outflow of client assets)

    0.0008 x Net Asset Flows

    $80 per $100,000 of Client Balances

  • Category 2: Portfolio Management Services

    Financial Consultant's Compensation¹

    One-Time Solutions Pay

    Schwab Private Client™

    0.002 x amount enrolled

    $200 per $100,000 of Client Balances

    Schwab Intelligent Portfolios Premium™

    Schwab Intelligent Portfolios®

    Schwab Personal Trust—Full Corporate Trustee

    Schwab Advisor Network®

    Schwab Managed Portfolios™

    Schwab Managed Account Services™ (which includes ThomasPartners® Strategies, Windhaven® Strategies, Charles Schwab Investment Management Separately Managed Accounts, Diversified Portfolios, and Third-Party Managers)

    Fixed Annuities, Variable Annuities, and Income Annuities by a Licensed Financial Consultant

    0.002 x annuity amount

    $200 per $100,000 of Client Balances

  • Category 3: Other Products

    Financial Consultant's Compensation¹

    One-Time Solutions Pay

    Introductions to Charles Schwab Bank for mortgages by Financial Consultants who are also employees of Charles Schwab Bank

    0.002 x loan amount for new mortgages;

    0.0011 x loan amount for refinanced loans

    $200 per $100,000 of loan amount

    $110 per $100,000 of Client Balances

    Schwab Personal Trust – Successor Trustee

    $175 per household designation

    $175

    Referrals to Life Insurance

    $450 per converted referral

    $450

    Referrals to Long-Term Care Insurance by a Licensed Financial Consultant

    $450 per converted referral

    $450

    Referrals to Schwab Advisor Services™

    $800 for referrals up to

    $30 million;

    $3,500 for referrals of $30+ million

    $800 or $3,500

    Referrals to Schwab Retirement Plan Services or Retirement Business Services

    0.002 x amount of assets referred;

    $250,000 minimum asset level to $10,000,000 maximum asset level

    $500 for a $250,000 referral

1. Schwab may cap the amount of incentive compensation that a Financial Consultant can earn from any one client from the Solutions Pay component.

Bringing Together a Financial Consultant's Pay

As an example, suppose an in-practice client of a Financial Consultant brings a portfolio of $500,000 to Schwab and invests it as follows:

  • $200,000 into Schwab Private Client™
  • $100,000 into mutual funds
  • $100,000 into ETFs
  • $100,000 in cash

The Financial Consultant would earn annual compensation as follows:

  • Payment Type

    Description

    Compensation Amount

    Solutions pay (one-time payments)

    $500,000 transfer into Schwab

    $400

    $200,000 enrollment into Schwab Private Client™

    $400

    Service Pay (annual payments)

    $200,000 balance in Schwab Private Client™

    $79.56–$119.34

    $100,000 balance in mutual funds

    $11.34–$17.01

    $100,000 balance in ETFs

    $11.34–$17.01

    $100,000 balance in cash

    $11.34–$17.01

    Total

    $913.58–$970.37

Please read the Schwab Intelligent Portfolios Solutions™ disclosure brochures for important information, pricing, and disclosures related to the Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium programs.

Schwab Intelligent Portfolios® and Schwab Intelligent Portfolios Premium™ are made available through Charles Schwab & Co. Inc. (“Schwab”), a dually registered investment advisor and broker dealer.

If you have questions about information contained in this section, please call 800-435-4000. For media inquiries, please call the Schwab Corporate Public Relations hotline at 415-667-9500.

Third-party trademarks are the property of their respective owners.

Please note that the information in this section does not apply to Schwab accounts managed by an independent investment advisor. Independent investment advisors are not owned by, affiliated with, or supervised by Charles Schwab & Co., Inc. ("Schwab").

At Schwab, we believe every investor deserves to work with a firm they can count on. Our commitment to your satisfaction is backed by a guarantee. If for any reason you're not completely satisfied with Schwab investment advisory services ("Participating Services"), we'll refund your program fee from the previous quarter and work with you to make things right.* Go to schwab.com/satisfaction to learn what's included and how it works.