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Schwab's financial and other relationships with ETFs and mutual funds

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At Charles Schwab & Co., Inc. ("Schwab"), we believe it's important for you to understand the compensation Schwab receives from mutual fund and exchange-traded fund (ETF) sponsors or their affiliated firms. This information may help you identify and evaluate any potential conflicts of interest that Schwab may have when you purchase a mutual fund or ETF through your Schwab account. This resource provides information about the relationships Schwab has with the mutual funds and ETFs made available through Schwab's Mutual Fund Marketplace® ("MFMP") and Schwab ETF OneSource™ programs, including mutual funds and ETFs managed by Schwab’s affiliate, Charles Schwab Investment Management, Inc. ("CSIM").

Mutual Fund Compensation. Schwab receives fees and other remuneration from mutual fund companies or their affiliates for the recordkeeping, shareholder services, and other administrative services that Schwab provides to shareholders of such funds (shareholder services). These services include, among other things, transaction processing, settlement of trades, dividend distribution, record maintenance, and distribution of statements, confirmations, prospectuses and other regulatory shareholder documents.   These fees are discussed more fully in the mutual fund compensation disclosures that follow.

ETF Compensation.  Schwab receives payments from the third-party ETF sponsors or their affiliates participating in Schwab ETF OneSource for recordkeeping, shareholder services and other administrative services that Schwab provides to participating ETFs. In addition, Schwab promotes Schwab ETF OneSource to its customers, and a portion of the fees paid to Schwab offsets some or all of Schwab's costs of promoting and administering Schwab ETF OneSource.  These fees are discussed more fully in the ETF compensation disclosures that follow.

Schwab affiliated-fund and Schwab ETF Compensation.  Schwab receives various forms of compensation from mutual funds and ETFs that are affiliated with Schwab (Schwab-affiliated funds): the Schwab Funds®, the Laudus™ Funds, and Schwab ETFs™. This may create a potential conflict of interest.  CSIM, a subsidiary of the Charles Schwab Corporation and Schwab affiliate, serves as investment advisor to the schwab-affiliated funds.  CSIM receives compensation for serving in such capacity. CSIM and Schwab are affiliated and compensation received by CSIM may also create potential conflicts of interest.  This website discusses the compensation received by CSIM and Schwab from the Schwab-affiliated funds.

In addition, Schwab compensates its financial consultants for recommending or selling mutual funds and ETFs, which could create potential conflicts of interest. If you are interested in learning more about the manner in which Schwab compensates its financial consultants for sales of mutual funds and ETFs, please review Schwab's Representatives' Compensation policy.