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Charles Schwab Makes Investor Education A Priority

By: Investor's Business Daily
Posted: 11/29/2013 5:38:00 PM
Referenced Stocks: SCHW

Special Report: 2013 Best Online Brokers

It's hard to generalize about the relationship between individual investors and their online brokers. Some do-it-yourselfers simply want to place low-cost, hassle-free trades.

Others prefer more handholding, along with access to market research and other resources.

At Charles Schwab ( SCHW ), the nature of the relationship varies by customer. The 40-year-old eponymous brokerage firm prefers to let its clients choose the level of engagement they want.

"Our employees interact with our clients on their terms," said Kelli Keough, Schwab's senior vice president of client experience. "Some may want an ongoing investment partner in a managed account. Those who are self-directed may want an occasional broker. Others may be active traders."

In IBD's 2013 Best Online Brokers survey, Schwab For a second straight year ranked among the top five brokers in Overall Customer Experience. It also made the top five in 11 of the 12 specific performance areas studied: equity trading tools, research tools, trade reliability, investment research, customer service, portfolio analysis/reports, educational resources, ETF choices, tax preparation tools, options trading platform and mobile platform/trading.

San Francisco-based Charles Schwab launched online trading in 1996 with discounted commissions. Today, its online brokerage has more than $2 trillion in assets.

Schwab's speedy account holders trade on average a third of their assets. They keep the remaining two-thirds in passive investments or other accounts, Keough says.

Just as founder Charles Schwab has positioned himself as an expert who seeks to level the playing field for investors, the firm's online brokerage provides extensive educational resources to customers. The company delivers an impressive range of Web-based learning tools.

"In times of uncertainty, we see more clients flock to education," Keough said. "In August, we saw a 77% increase (in usage) year over year in our online learning center. We also offer more risk management classes in times of more volatility."

Schwab offers more than 1,000 live online educational events per year that cater to all levels of investors. These sessions are also recorded and archived for future use.

With over 300 retail branches in America, Schwab hosts about 3,000 in-branch workshops specifically for traders on a range of topics. In addition, the firm has held nearly 5,000 workshops for retail investors this year. Subjects included introductory investing and generating income in retirement. New traders can participate in a live introductory tutorial. Investors can even schedule house calls for a Schwab representative to explain its tech platform and software tools.

Many Schwab customers express interest in learning more about stock options. They're among the firm's most popular training topics.

"Options trading is an enormous focus for us," Keough said. Schwab often holds educational programs featuring Randy Frederick, whom Keough calls "our guru in options."

Schwab strives to personalize its educational outreach. Experts such as Frederick and Liz Ann Sonders -- the firm's chief investment strategist -- play a prominent role in teaching clients.

"Our clients want to know the people behind the advice, commentary and trading," Keough said. "It helps clients make a stronger connection with the ideas when they're able to make a personal connection with our experts."

Schwab's team also addresses other subjects such as the mechanics of ETFs, sector ratings and maximizing the firm's technology tools. Their goal is to help clients think through various investment strategies and take full advantage of the company's offerings.

After educational events, Schwab distributes customer surveys. "We're always refining our live events. We've learned how to better queue up the Q&A in real time through live chat," Keough said.

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