FPA of Georgia Bernie Clark Executive Vice President

FPA of Georgia Bernie Clark Executive Vice President Advisor Services May 24, 2017 Compliance #0517 -5 UY

Advisor Services 1, 800 Schwab team members dedicated to custody, trading and operations… Over 7, 000 advisors Representing $1. 3 trillion in assets* *Data as of Q 4 2016. Advisor Services total assets includes RBS and Corporate Brokerage Retirement Services (CBRS) assets and excludes “retail assets” resulting from Schwab Advisor Network and Advisor Source. 2 Charles Schwab Corporation

Today’s Discussion: The Evolving Role of the Advisor § Economics/Financial Models § The Future of Advisory Relationships § Differentiation § Next Generation Succession Planning § Advocacy 3 Charles Schwab Corporation

Economics & Financial Models Profile of an RIA Firm Schwab & Industry Asset Growth CAGRs Key Metrics of a $250 M+ firm from our 9. 7% Schwab ASI Assets 2016 Benchmarking Study 1: 9. 1% RIA Industry Assets § Average account size: $1. 60 M 4. 7% S&P 500 § Number of clients: 350 § Year-end AUM: $588 M § Standardized operating margin: 27. 2% 2006 2008 2010 2012 2014 2016 § Age of firm: 21 years § 5 -year organic growth CAGR 2: 5. 4% Note: CAGR is the compound annual growth rate from 2006 -2016. Chart indexed to 2006 levels. Source: Charles Schwab; Yahoo Finance. • Schwab Advisor Services Institutional (ASI) assets exclude Retirement Business Services (RBS) assets. Excludes “retail assets” resulting from Schwab Advisor Network® (SAN) and Advisor Source • 2016 is a preliminary Schwab estimate assuming 2016 RIA market growth was in line with ASI asset growth • Excludes dividend yield 2016 RIA Benchmarking Study from Charles Schwab. 1. Median results for all firms with $250 M or more in AUM, unless otherwise noted. 2016 RIA Benchmarking Study from Charles Schwab, fielded January to March, 2016. Study contains self-reported data from 1, 128 firms. Participant firms represent various sizes and business models categorized into 12 peer groups — 7 wealth manager groups and 5 money manager groups, by AUM size. 2. Organic growth from net asset flows is the change in a firm’s assets from new, existing, and lost clients before investment performance is taken into account, and it excludes the growth from acquisition or divestitures, and from advisors joining or leaving. 4 Charles Schwab Corporation

The Future of Advisory Relationships External forces… 5 will drive internal change. Technology Fee structure Specialty Services Millennials Digital Experience Talent Charles Schwab Corporation

Differentiation Personal interaction and assistance to manage aspects of a client’s financial life Relationship management Financial planning, estate planning, charitable giving, tax planning, etc. Value-added services Asset allocation, portfolio construction, ongoing portfolio management More personalized and differentiated. Potential for building trust and loyalty. Investment management More easily automated and replicated. Potential for commoditization. 6 Charles Schwab Corporation

Next Generation Succession Planning Many Advisors are Nearing Retirement 38. 5% of advisors are transitioning within 10 years 39. 4% of assets are transitioning within 10 years Chart Source: U. S. RIA Marketplace 2016, Cerulli Associates 7 Charles Schwab Corporation

Advisor & Industry Advocacy for Advisors RIA industry awareness and talent development § RIA Talent Advantage™ § University Grants § RIA Student Intern Program § Investment in advocacy advertising campaign § Executive Leadership Program Washington DC advocacy § Department of Labor Fiduciary Rule § Anti-money laundering § Ongoing outreach 8 Charles Schwab Corporation

Q&A 9 Charles Schwab Corporation

Appendix & Disclosures Slide 2 Note: Data as of Q 4 2016. Advisor Services total assets includes RBS and Corporate Brokerage Retirement Services (CBRS) assets and excludes “retail assets” resulting from Schwab Advisor Network and Advisor Source. Schwab Retirement Business Services are provided by Charles Schwab Bank and Charles Schwab & Co. , Inc. , separate but affiliated companies and subsidiaries of The Charles Schwab Corporation. Brokerage products and services are offered by Charles Schwab & Co. , Inc. (Member SIPC). Charles Schwab Bank provides trust, custody and deposit products and services with respect to retirement plans. Slide 4 Note: CAGR is the compound annual growth rate from 2006 -2016. Chart indexed to 2006 levels. Source: Charles Schwab; Yahoo Finance. 1. Schwab Advisor Services Institutional (ASI) assets exclude Retirement Business Services (RBS) assets. Excludes “retail assets” resulting from Schwab Advisor Network® (SAN) and Advisor Source. 2. 2016 is a preliminary Schwab estimate assuming 2016 RIA market growth was in line with ASI asset growth. 3. Excludes dividend yield. Metrics Source: 2016 RIA Benchmarking Study from Charles Schwab. 1. Median results for all firms with $250 M or more in AUM, unless otherwise noted. 2016 RIA Benchmarking Study from Charles Schwab, fielded January to March, 2016. Study contains self-reported data from 1, 128 firms. Participant firms represent various sizes and business models categorized into 12 peer groups — 7 wealth manager groups and 5 money manager groups, by AUM size. 2. Organic growth from net asset flows is the change in a firm’s assets from new, existing, and lost clients before investment performance is taken into account, and it excludes the growth from acquisition or divestitures, and from advisors joining or leaving. Slide 6 Source: Automated Investing MKT 2015, Charles Schwab. Slide 7 Chart Source: U. S. RIA Marketplace 2016, Cerulli Associates 10 Charles Schwab Corporation