Transcript for Omar Video (Direct Indexing), Updated August 2024 

Hi, my name is Omar Aguilar, and I am the Chief Executive Officer for Schwab Asset Management. Every day, I'm amazed by the way innovation has helped us all become more efficient, more informed, and able to personalize the products and services we use in our lives.

We have seen this evolution over the last 30 years. First, mutual funds made a range of investment strategies, like index investing, more accessible. Then ETFs were created, giving investors more transparency, more potential tax efficiency, and a new way to invest in an indexing strategy. Now we have taken this to the next step. This new approach is called direct indexing. Through direct indexing, you can adjust an indexing strategy to provide your clients with better tax management, more transparency and control over holdings, and therefore creating a more personalized investment experience.

This powerful investment tool not only supports client needs. It is also a powerful relationship-building opportunity for you, the advisor. Schwab was founded on the commitment to always put clients first, to see through clients' eyes. It is in our DNA to innovate on our clients' behalf, to disrupt investing in ways that put investors and advisors like you in control. 

From the beginning, when Schwab introduced a discount brokerage, the goal was to create innovative and scalable products and solutions. The Schwab 1000 Index is a great example. We think innovations like this make it possible to provide a simple, less costly, and more accessible way for you and your clients to invest. 

Today, Schwab Asset Management is one of the industry's largest and most experienced asset managers. We bring strength and a history of leadership and innovation to direct indexing in Schwab Personalized Indexing. With low minimums and competitive pricing, Schwab Personalized Indexing makes direct indexing more accessible for more investors, and therefore helping them meet a broad array of financial goals. Schwab Personalized Indexing includes large- to small-cap index options that offer tax optimization, enabling you to pursue tax advantages through strategic tax loss harvesting, personalized control that better aligns investments with your clients' preferences and beliefs, and access to Schwab's experienced professional asset management teams for your clients.

And this is just the beginning. At Schwab Asset Management, we will continue to look for ways to expand and enhance Schwab Personalized Indexing to help you meet the needs of your clients, and we will keep pushing for efficiency, transparency, and a great personal experience in everything we do. 

Thank you for your interest in Schwab Personalized Indexing. I'm excited to see how investments like these can help you form deeper relationships with your clients.

Footnotes

1 ETFs at Charles Schwab & Co., Inc. ("Schwab" which are U.S. exchange-listed can be traded without a commission on buy and sell transactions made online in a Schwab account. Unlisted ETFs are subject to a commission. Please see pricing guide for additional information. Schwab does not receive payment to promote any particular ETF to its customers. Schwab's affiliate Charles Schwab Investment Management, Inc. ("CSIM") serves as investment advisor to the Schwab ETFs, which compensate CSIM out of the applicable operating expense ratios. The amount of the fees is disclosed in the prospectus of each ETF.

2 Source: Schwab Asset Management, as of June 30, 2024. The approximate total assets under management includes proprietary mutual funds, ETFs, collective investment trusts and managed accounts (Schwab Managed Portfolios™, Thomas Partners® Strategies, USAA Managed Portfolios - UMP®, Wasmer Schroeder™ Strategies, and Windhaven® Strategies). Excludes affiliated proprietary products from fund-of-fund products and managed investing offers. As of June 30, 2024, Schwab Asset Management managed approximately $1.2 trillion on a discretionary basis and $38.3 billion on a non-discretionary basis. Schwab Asset Management provides non-discretionary advisory services to the Schwab Trust Bank Collective Investment Trusts, including research and recommendations relating to asset allocation, portfolio construction, cash-flow monitoring and advisor selection and retention.

Some trusts include multiple unit classes. All rankings based on assets under management (AUM) as of June 30, 2024, unless noted.

Source for 3rd largest provider of index mutual funds and 5th largest provider of ETFs is Lipper.

Disclosures

Investors in mutual funds and ETFs should consider carefully information contained in the prospectus, or if available, the summary prospectus, including investment objectives, risks, charges and expenses. You can obtain a prospectus, or if available, a summary prospectus by visiting schwabassetmanagement.com/prospectus. Please read it carefully before investing.

This information is not intended to be a substitute for specific individualized tax, legal, or investment planning advice.

Please refer to the Charles Schwab Investment Management, Inc. Disclosure Brochure for additional information.

Schwab Personalized Indexing is available through Schwab's Managed Account Connection® program ("Connection"). Please read Schwab's disclosure brochure for important information and disclosures relating to Connection and Schwab Managed Account Services.

Portfolio Management for Schwab Personalized Indexing is provided by Charles Schwab Investment Management, Inc., dba Schwab AssetManagement®,a registered investment adviser and an affiliate of Charles Schwab & Co., Inc. ("Schwab"). Both Schwab Asset Management and Schwab are separate entities and subsidiaries of The Charles Schwab Corporation.

Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market. Indexes are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly.

There are risks associated with any investment approach, and each Schwab Personalized Indexing strategy and equity market segment has their own set of risks based on client strategy selection and further customization.

Strategies that use screening to exclude certain investments may not be able to take advantage of the same opportunities or market trends as strategies that do not use screens. There can be no assurance that the strategies will achieve their desired outcomes. Each investing strategy brings with it its own set of unique risks and benefits.

There are risks associated with any investment approach, and each Schwab Personalized Indexing strategy and equity market segment has their own set of risks based on client strategy selection and further customization. Please refer to the Charles Schwab Investment Management, Inc. Disclosure Brochure and Schwab's disclosure brochure for additional risk disclosure