Charles Schwab Brokerage Trust Overview

Overview

The 2008 financial crisis triggered a series of bank failures in the U.S. From 2008 to 2012, the Federal Deposit Insurance Corporation (FDIC) closed 465 failed banks – by comparison, only 10 banks had closed in the five years leading up to the crisis. Brokerage firms were not immune, and we saw the largest brokerage firm failure in history – and the largest bankruptcy proceeding ever – when Lehman Brothers collapsed in the fall of 2008.

Understandably, investors today are concerned about the safety of their investment accounts – and what happens if their brokerage firm goes bankrupt. The good news is that most investors have multiple layers of protection – including the FDIC, the Customer Protection Rule, and the Securities Investor Protection Corporation (SIPC) – if their brokerage firm goes under. Many investors also worry about data breaches and what happens if their account is hacked. Here, we take a quick look at the measures brokerage firm Charles Schwab takes to protect customer assets and personal information. Also included: a brief profile of the company and its activities and awards. Read the full Charles Schwab review.

Industry Recognition

With a reputation for providing excellent customer service and a reliable trading platform, Schwab has earned numerous industry awards. Here are just a few:

  • Ranked highest in the J.D. Power Full Service Investor Satisfaction Study for 2016 and 2017
  • Named #1 in Customer Service, Trade Reliability, Site Performance and ETF Choices in the Investor’s Business Daily Best Online Brokers for 2017
  • Ranked #1 in Customer Service, Trade Reliability, and Mobile Platform/Mobile Trading in the Investor’s Business Daily Best Online Brokers for 2016
  • Selected as one of the FORTUNE Top 50 "World’s Most Admired Companies" for 2016, ranking #1 for Innovation and Social Responsibility and #2 in the Securities and Asset Management category
  • Scored an overall 4 out of 5 stars in the Barron’s survey of the Best Online Brokers of 2015
  • Named #1 in Customer Service and Trade Reliability in the Investor’s Business Daily Best Online Brokers for 2015
  • Ranked one of MONEY magazine’s “Best Banks” in 2015
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Corporate Responsibility

Charles Schwab has long history of corporate social responsibility – including financial education programs, employee volunteerism and community involvement. Its initiatives include:

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  • Money Matters: Make it Count. In partnership with Boys & Girls Clubs of America, the Make it Count program teaches teens basic money management skills so they can save, spend and invest wisely.
  • Schwab MoneyWise. The award-winning MoneyWise website and workshops tackle money management topics with hands-on tools and engaging content.
  • Financial education in classrooms. Schwab provides a dollar-for-dollar match up to $100,000 for every donation to financial literacy-focused projects on DonorsChoose.org.
  • Charles Schwab Foundation. Provides financial support to a variety of charities and community events selected by Schwab employees, with $4+ million given annual to directly support nonprofits.
  • Environmental responsibility. Schwab researches, develops and implements multiple environmentally friendly practices to reduce its carbon footprint.

Company Profile

Charles Schwab is one of the world’s largest brokerage firms, with nearly 10 million active client brokerage accounts and $2.90 trillion in client assets. The company was built around a simple idea: put the clients first, and it works to "keep clients at the heart of everything we do by offering offer a better, more modern way to build and manage wealth." Incorporated as First Commander Corporation in 1971, the company became Charles Schwab & Co., Inc. in 1973. Fourteen years later, the Charles Schwab Corporation (SCHW) completed its initial public offering.

Today, Schwab is headquartered in San Francisco. It has 335 branches and employs about 16,000 people full time. The company operates four primary divisions: investing, wealth management, banking and trading. Its key people include:

Charles Schwab

Charles Schwab

Founder and Chairman of the Board
Walt Bettinger

Walt Bettinger

President and CEO, Director
Joseph Martinetto

Joseph Martinetto

CFO and Senior Executive Vice President
Marie Chandoha

Marie Chandoha

President, Director and CEO, Charles Schwab Investment Management Inc.

The Bottom Line

Charles Schwab customers can feel reasonably confident that their assets and personal information are safe. The Customer Protection Rule, FDIC and SIPC trifecta – combined with Schwab’s excess SIPC coverage from Lloyd’s – make it unlikely that you would sustain significant financial losses if Schwab went bankrupt. In addition, Schwab’s Security Guarantee protects you for 100% of losses in any of your Schwab accounts due to unauthorized activity.

That being said, it’s important to do your part to stay safe: Keep your web browser and operating system updated, install (and use) robust anti-virus and anti-spyware software, keep your security settings strong, download Schwab apps only from the Google Play Store or Apple’s App Store, use caution when you’re on a public network, be strategic with login credentials and passwords, and be alert for phishing scams.