Clients Will Pay Only a $1 Mark-up Per Bond for Online Trades
SAN FRANCISCO, June 12 /PRNewswire-FirstCall/ -- Charles Schwab today
announced new low, easy to understand prices for bond trades, as well as
lowered and capped expenses on the Schwab Funds(R) tax-free bond funds. The
new pricing will be available to all account holders, regardless of their
balance.
"Bonds are a key part of a diversified investment strategy, especially
for investors who are nearing or in retirement," said Walt Bettinger,
president and chief operating officer of Charles Schwab. "But for too long,
bonds have been behind other securities in terms of convenience and price
transparency. Over the last few years we've expanded trading hours,
upgraded our BondSource(R) website with better information and more tools,
introduced low and simpler pricing that all together make Schwab a leader
in the fixed income marketplace and a great home for bond investors."
Effective July 1, Schwab will show itemized pricing that includes the
price of the bond and the new mark-up (or mark-down) -- based on the
schedule below -- all prior to the trade confirmation.(1)
Online Trades Broker-Assisted Trades
Treasuries
(secondary market) $0 Online pricing plus $25
-- Treasury Bonds per transaction
-- Treasury Bills
-- Treasury Notes
-- TIPS
Other Secondary Trades $1 per bond Online pricing plus $25
-- CDs ($10 min/$250 max per transaction
-- Corporate Bonds per transaction)
-- Government Agencies
-- Municipal Bonds
-- STRIPS
-- Zero-coupon Treasury bonds
-- Mortgage-Backed Securities
Clients enrolled in Schwab Private Client(TM) or Schwab Advised
Investing Signature(TM) will pay $0 mark-ups with no broker-assisted
charge.
"When clients are seeking a bond, the net yield-to-maturity and net
yield-to-call are the most important factors to consider. Without knowing
all the costs involved, it's difficult to predict these net yields," said
Jim White, senior vice president of Fixed Income Trading. "Schwab helps
clients make smart purchasing decisions by displaying the net
yield-to-maturity right up-front in the search results."
New Low Pricing for Schwab Institutional(R) Clients
Independent investment advisors who custody assets with Schwab will
also benefit from the new pricing, per the mark-up schedule below.
Online Trades Broker-Assisted Trades(2)
Treasuries
(secondary market) $0 Online pricing plus $25
-- Treasury bonds per transaction
-- Treasury bills
-- Treasury notes
-- TIPS
Other Secondary Trades $1.00 per bond $1.20 per bond
-- CDs ($10 min / $250 max ($10 min / $275 max
-- Corporate bonds per transaction) per transaction)
-- Municipal bonds
-- STRIPS
-- Zero-coupon Treasury bonds
-- Mortgage-backed securities
Government Agencies $0.20 per bond $0.24 per bond
($10 min, $250 max ($10 min, $275 max
per transaction) per transaction)
New Operating Expense Ratio Caps for Schwab Funds Tax-Free Bond Funds
Effective May 7, Charles Schwab Investment Management, Inc. lowered the
OER on four of its Schwab Fund tax-free bond funds to between 0.45 and 0.49
percent (previously ranging from 0.60 to 0.65 percent) and capped the
potential future OERs for all six tax-free bond funds at 0.49 percent.
Schwab Funds are available with an initial investment minimum of only $100.
About Fixed Income at Schwab
Schwab offers a suite of fixed income services and products including:
-- Access to a daily inventory of more than 20,000 fixed income securities
and more than 340 bond funds
-- Relationships with more than 200 bond dealers
-- Regional fixed income trading centers that service clients, Schwab
financial consultants and independent investment advisors
-- Bond specialists with an average of 15 years of industry experience who
can assist clients, create investment ladders and provide trade
history, or detailed S&P Rating reports
-- New Issue bond alert service
-- Online articles from proprietary and third party sources
-- Tools such as BondSource and Mutual Fund OneSource to help narrow down
the selection process
-- Educational webcasts
-- Online economic events calendar
-- Briefing.com bond market Analysis
-- Toll-free number for assistance with fixed income investing available
during regular trading hours (In addition to Schwab's main toll-free
assistance hotline available 24 hours a day, seven days a week)
Contact Information for Investors
Individual investors new to Schwab and seeking more information on the
fixed income investing at Schwab can call 1-800-435-4000 or visit
http://www.schwab.com/bonds. Schwab clients who work with independent
advisors may contact the advisor directly or call Schwab Alliance at
800-515-2157.
(1) Pricing for new-issues and Treasuries at Auction will not change. The
$10 minimum and certain broker-assisted fees will be waived through
Aug. 10, 2007.
(2) Trades placed by Schwab Institutional investment advisors through a
Schwab Alliance or Schwab Investor Services representative will be
charged an additional $25 broker assist fee, subject to a $35 minimum
and a $275 maximum. Trades for new issues placed through a broker are
not subject to these premiums.
About Charles Schwab
The Charles Schwab Corporation (Nasdaq: SCHW) is a leading provider of
financial services, with more than 300 offices and 6.8 million client
brokerage accounts, 1,117,000 corporate retirement plan participants,
154,000 banking accounts, and $1.3 trillion in client assets. Through its
operating subsidiaries, the company provides a full range of securities
brokerage, banking, money management and financial advisory services to
individual investors and independent investment advisors. Its broker-dealer
subsidiary, Charles Schwab & Co., Inc. (member SIPC, http://www.sipc.org),
and affiliates offer a complete range of investment services and products
including an extensive selection of mutual funds; financial planning and
investment advice; retirement plan and equity compensation plan services;
referrals to independent fee-based investment advisors; and custodial,
operational and trading support for independent, fee-based investment
advisors through its Schwab Institutional division. The Charles Schwab
Bank, N.A. (member FDIC) provides banking and mortgage services and
products. CyberTrader(R), Inc. (member SIPC, http://www.sipc.org) is an
electronic trading technology and brokerage firm providing services to
highly active, online traders. More information is available at
http://www.schwab.com.
Important Disclosures
INVESTORS SHOULD CONSIDER CAREFULLY INFORMATION CONTAINED IN THE
PROSPECTUS, INCLUDING INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES.
YOU CAN REQUEST A PROSPECTUS BY CALLING 800-435-4000. PLEASE READ THE
PROSPECTUS CAREFULLY BEFORE INVESTING.
FIXED INCOME INVESTMENTS ARE SUBJECT TO VARIOUS RISKS INCLUDING CHANGES
IN INTEREST RATES, CREDIT QUALITY, LIQUIDITY, EARLY REDEMPTION AND OTHER
FACTORS.
ACCESS TO ELECTRONIC SERVICES MAY BE LIMITED OR UNAVAILABLE DURING
PERIODS OF PEAK DEMAND, MARKET VOLATILITY, SYSTEMS UPGRADE, MAINTENANCE, OR
FOR OTHER REASONS.
Charles Schwab & Co., Inc. member SIPC, receives remuneration from fund
companies participating in the Mutual Fund OneSource(TM) service for record
keeping and shareholder services and other administrative services. Schwab
also may receive remuneration from transaction fee fund companies for
certain administrative services. (0607-5662)
SOURCE Charles Schwab
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Related links:
http://www.schwab.com/
CONTACT:
Lara Edge of Charles Schwab, +1-415-636-3386,
Lara.Edge@Schwab.com
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