Managed Accounts

Managed accounts are portfolios of individual securities managed on a discretionary basis by professional money managers. Clients own the underlying securities in a managed account; therefore, they may enjoy tax management benefits along with the ability to customize their managed account. Typically, the money manager will specialize in specific investment strategies, such as large-cap growth, small-cap value or short- and intermediate-term fixed income.

Facts

Headquarters	San Francisco
History	Founded in 1997
Management	Randall W. Merk, executive vice president of Investment Management
Clients	Financial advisors and independent investors
Client assets	Assets under management as of Sept. 30, 2008: $39.7 billion

Products and Services

Managed Account Marketplace® is offered exclusively through Schwab Institutional, and is Schwab's most flexible managed account service. The open architecture gives investment advisors the freedom to work with virtually any money manager they choose. Investment advisors can:

Conduct their own due diligence
Negotiate fees and contractual agreements directly with money managers
Choose from transaction- or asset-based pricing for Schwab's brokerage and custody services

Managed Account Access™, available through Schwab Institutional, offers a robust selection of money managers and strategies along with simplified administration, making it easy and efficient for investment advisors to take their managed account business to the next level. Benefits include:

Broad array of money managers and strategies available through a single account agreement and streamlined administration
Ability for advisors conduct their own due diligence to evaluate and select from top money managers spanning multiple investment styles
Low account minimums of $100,000 for most equity investment strategies and $250,000 for most fixed-income strategies
Competitive, pre-negotiated fees

Managed Account Select®, available through Schwab Institutional and Schwab Investor Services, is Schwab's most comprehensive managed-account solution, offering world-class research and simplified administration for one competitive, asset-based fee. Features include:

Research and analysis by Schwab Center for Financial Research
Option to hire multiple managers with one Schwab agreement
Low minimums of $100,000 for most equity investment strategies and $250,000 for most fixed-income strategies
One fee includes money manager services and Schwab brokerage and custody services
Low cost (fees differ for Schwab Institutional and Schwab Investor Services)

Managed Account Affiliates™, offered through Schwab Investor Services, features Charles Schwab Investment Management , Inc. (CSIM) as an affiliated money manager. Clients can leverage the power of Schwab Equity Ratings® through CSIM’s four equity strategies: CSIM Large-Cap Core Portfolio, CSIM Dividend Equity Portfolio, CSIM Large-Cap Growth Portfolio and CSIM Small-Cap Equity Portfolio. Affiliates offer:

Low minimums of $100,000 for most equity investment strategies and $250,000 for most fixed-income strategies
Comprehensive, asset-based fee

The Managed Account Research Center is a group of analysts dedicated to
providing tools and resources to help investment advisors and Schwab consultants make informed decisions about money managers.

Managed Account Fast Facts (Sept. 30, 2008)

Managed accounts are a $1.85 trillion business (Cerulli Associates, Managed Account Research, 2Q 2008 Summary) (Cerulli figures are as of June 30, 2008)
Schwab has one of the largest separately managed account platforms serving independent advisors and is the sixth largest third-party separate account platform in the industry overall (Cerulli Associates, Managed Account Research, 2Q 2008 Summary)