Schwab Expands Variable Annuity Offering With Low-Cost Schwab Signature Annuity for Affluent Clients

Business Wire, June 19, 2001

Business Editors

SAN FRANCISCO--(BUSINESS WIRE)--June 19, 2001

New annuity product intended as retirement supplement for clients

who have already maximized contributions to IRAs or 401 (k)s;

web-based annuity platform expands online services.

Seeking to broaden the range of products and services it offers clients, Charles Schwab & Co., Inc., today announced the introduction of the Schwab Signature(TM) Annuity, a low-cost variable annuity designed especially for Schwab's affluent Signature Services clients and clients of independent investment advisors.(1)

Schwab also introduced a new Web-based annuity platform that expands annuity services for individual investors and advisors. Schwab's new system, powered by AnnuityNet, Inc., is the first end-to-end solution, enabling clients to purchase and manage their annuity online. It significantly improves the firm's online annuity offering and supplements services offered through its telephone service centers.

"As a firm, Schwab has warned investors that high-fee, annuity products sold by brokers or insurance agents create a conflict of interest because of the large commissions they generate," said Rob Klapper, Senior Vice President and General Manager of Charles Schwab Insurance Services. "With the Schwab Signature(TM) Annuity and Schwab Select Annuity(TM), we are bringing our client-focused approach to investing to the variable annuity product. Our new products will expand services to annuity investors and lower costs."

Schwab Signature(TM) Annuity

The Schwab Signature(TM) Annuity, issued by Great West Life and Annuity Company of Denver, Colo., is an addition to Schwab's annuity line-up, which includes the Schwab Select Annuity(TM). The Schwab Signature(TM) Annuity gives clients a powerful tool to plan and invest for retirement.

Among its features:

-- One of the lowest-cost annuities available, with no surrender charges, no contract fee, unlimited transfers at no cost, and annuity fees that are nearly 50 percent below the variable annuity industry average.

-- Access to 30 annuity portfolios from 18 mutual fund families that also participate in Schwab's Mutual Fund OneSource(R) service. The portfolios offer a broad mix of investment strategies across asset classes and investment styles, providing flexibility and control for investors to make changes as individual goals or market conditions change.

-- Several annuity withdrawal choices, including either lump-sum or periodic payments which can be guaranteed for life or over a set period of time.

"As people live longer and enjoy retirement more, Social Security and retirement savings may not provide enough income for them to maintain their retirement lifestyle," said Klapper. "The Schwab Signature(TM) Annuity is a smart, low-cost way for individuals to supplement their long-range retirement plans with tax-deferred savings and a source of lifetime income when an income stream is needed."

Expanded Online Functionality

While Schwab has for several years offered clients online tools to manage their annuities, the new Web-based platform makes significant improvements, including allowing clients and advisors to buy and manage low-cost variable annuities online, and simplifying the process of buying a new annuity, or consolidating annuity assets at Schwab.

-- Signature Services clients can apply for an annuity online in a matter of minutes. Once an annuity account has been established, clients may access it around the clock to make trades and payments, change beneficiary designations or modify other information. Clients can transfer funds from their Schwab account, or pay by electronic or paper check. They also have a choice of electronic or paper confirmations and statements.

-- Financial advisors working with Schwab can set up and view their clients' Schwab annuity accounts seamlessly on the Schwab Institutional Website. Timesaving functions enable Schwab advisors to organize accounts, analyze data, and execute trades for multiple clients with a single order.

About Charles Schwab

The Charles Schwab Corporation, through Charles Schwab & Co., Inc. (member SIPC/NYSE), U.S. Trust Corporation, CyberTrader, Inc. and its other operating subsidiaries, is one of the nation's largest financial services firms serving 7.7 million active accounts with $864.9 billion in client assets. As of the first quarter of 2001, Schwab served 4.3 million online investor accounts with $327.9 billion in assets. Schwab provides a full-service investing experience to clients through 429 domestic offices, five regional client telephone service centers, the Internet, automated touch-tone telephone, automated voice recognition, e-mail, wireless technologies and multi-lingual and international offices. About 25% of Schwab's client assets and 10% of its client accounts are managed by the 6,000 third-party, fee-based investment advisors served through Schwab Institutional. The Charles Schwab, U.S. Trust and CyberTrader Web sites can be reached at http://www.schwab.com, http://www.ustrust.com and http://www.cybertrader.com respectively. (Access to Electronic Services may be limited or unavailable during periods of peak demand, market volatility, systems upgrade, maintenance, or other reasons.) (0001-16369)