Schwab Study Finds One in Four Chicagoans Ready to Make the Move to a New Financial Services Firm

Business Wire, June 17, 2009

Market Turmoil and Portfolio Losses Are Causing Chicago Investors to Rethink Relationships With Their Financial Service Providers

CHICAGO -- According to a new Charles Schwab survey, 25 percent of Chicago investors are considering changing financial services firms/brokers in the next year based on their overall frustrations with their current situation. With 92 percent saying they are frustrated about the money they lost in the past year and 65 percent admitting they are only somewhat confident in the guidance they receive from professionals, investors are taking stock of their own actions and accountability, while considering what they want and expect from their brokers.

The survey uncovered investors’ top reasons for why they would leave their current firm. Nearly half (49 percent) cited “the financial stability of my firm being in question” and 43 percent listed the cost of doing business with the firm. In addition, policy changes and investment performance were cited by many as reasons they would consider leaving their firm (35 and 34 percent, respectively). Only slightly more than half (56 percent) of respondents said they trust their current firm, and just a third (38 percent) think their firm is more stable than other firms.

At the same time, many investors were wary of change, and when asked for reasons why they would stay with their current firm, responses included:

• ‘I might lose money if I make a switch’ (20 percent)
• ‘I don’t know of any better options’ (20 percent)
• ‘It’s time consuming to make a switch’ (16 percent)

When asked what they would like to be different about their financial firm or broker in the next year, the top responses related to the cost of working with them (29 percent), the frequency of proactive contact (26 percent) and the quality of advice (25 percent).

“With one in four Chicagoans ready to make the move, investors are seeking a genuine partner they can trust to help them plan for the long-term,” said Jim Stoops, financial consultant at Charles Schwab’s Chicago branch. “They are understandably frustrated by the last year and have responded by expecting more from the experts they turn to for guidance.”

Proactive Stance

However, investors admit the responsibility is a shared one. Forty-two percent of those surveyed now review their finances at least once a day, compared to 19 percent prior to fall 2008. When asked what they are likely to do differently in the next year, the top responses were:

• ‘Set stricter budgets for myself or my household’ (40 percent)
• ‘Pay closer attention to how much money I have invested or saved’ (39 percent)
• ‘Pay closer attention to the state of the market’ (32 percent)
• ‘Reevaluate my financial firms or providers more often’ (20 percent)

“Our perspective is now is the time to act – make a move if you are unhappy with your current financial services relationship,” added Stoops. “Make sure you are matched with a provider who understands your goals, provides value based on your needs and is focused on helping you achieve your financial goals.”

For More Information

Schwab clients are encouraged to reach out to their financial consultant to get more specific advice around their situations, or take advantage of our complimentary consultation. For those who are not yet a Schwab client but would like to learn more, one of our consultants can help. Please call 800-435-4000 to get started.

About the Survey

The Charles Schwab “Make the Move” Survey was conducted by Kelton Research between June 4 and June 8, 2009 using an email invitation and an online survey. Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. In this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 4.4 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.

About Charles Schwab

The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 7.5 million client brokerage accounts, 1.5 million corporate retirement plan participants, 567,000 banking accounts, and $1.2 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, 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 Advisor Services division. The Charles Schwab Bank (member FDIC) provides banking and mortgage services and products. More information is available at www.schwab.com. (0609-9518)