Charles Schwab Encourages Investors to Make a Fresh Start.

Business Editors

SAN FRANCISCO--(BUSINESS WIRE)--Jan. 27, 2003

Unprecedented $95 offer gives investors confidence to take action

on their portfolios with customized investment plan and recommended

equity rebalancing trades included

In an effort to rebuild investor confidence and help people take needed action, Charles Schwab & Co., Inc., today announced Fresh Start, a portfolio analysis and rebalancing plan that provides investors with a roadmap to get their portfolios back on track in 2003.

For $95 -- less than the cost of an equity trade commission at many traditional brokerage firms -- a Schwab investment consultant will provide a comprehensive review of an investor's holdings and give buy and sell recommendations that are based on individual goals and circumstances. All recommended equity trades needed to rebalance the investor's portfolio are included in the fee. Clients of advisors working with Schwab Institutional have access to a similar service.

"I have talked to many investors who are caught on the horns of a dilemma -- take action and incur the significant cost of rebalancing their portfolios, or do nothing and miss the opportunity to put their portfolio in fighting shape," said Charles R. Schwab, Founder, Chairman and Co-CEO of The Charles Schwab Corporation. "Clearly, now is the time for them to regain control -- they simply can't wait for the portfolio to fix itself. They must take action. With Fresh Start, we want to eliminate the barriers to investing success and help investors build a plan for long-term financial success."

Investors Still Paralyzed 

Despite some signs that the U.S. stock market may be emerging from a protracted bear market, many investors have not taken action to right their portfolios. According to a recent survey by Harris Interactive(R), just slightly more than a third of investors (37 percent) actually plan to re-evaluate their investments in 2003. The survey also found that more than one in five investors (22 percent) have not reviewed their portfolio for two or more years -- and more than one in ten (12 percent) have never reviewed their investment portfolio. At the same time, many other investors already realize that they do need professional investment help to get their portfolio back on track. Almost half of investors surveyed (44 percent) said they were "very likely" or "somewhat likely" to consult a financial advisor this year.

"It's always important for investors to get periodic financial checkups, especially when year-end results are fresh in hand and tax filings are still a few months away," said Mr. Schwab. "Especially today, it's crucial for them to get their financial houses in order and move forward with confidence. The good news is that it doesn't have to take a lot of money or time to do it."

Schwab Research: Rebalance for Long-Term Growth

Analysis by the Schwab Center for Investment Research underscores the importance of investors taking positive action. Re-assessing a portfolio, for example, allows an investor to allocate the appropriate amount of stocks, bonds and cash to help control risks and position an investment portfolio for long-term growth. "With the historic decline in the market, asset allocations may have changed radically, and investor portfolios may not have the appropriate mix of stocks for long-term growth," said Bryan Olson, vice president of the Schwab Center for Investment Research. "By taking a close look at their investments, investors can reset their portfolios in a way that's appropriate for their goals and risk tolerance."

At the same time, it's crucial to stay invested in preparation for possible market improvements in 2003 and beyond. Schwab's experts recently analyzed bear markets and subsequent market performance from January 1926 to October 2002. Researchers found that stocks historically have produced substantially higher average annualized returns in the 12 months immediately following a bear market than in subsequent months. For example, an investor who was fully invested would have realized a 47% average annualized return in the 12 months immediately following a bear market. By comparison, an investor who was in cash and waited just one month after the end of the bear market to invest saw his return fall to 33%. The average annualized return dropped to 11% for the investor who waited six months to invest.(1)

"This illustrates why it makes sense for investors to rebalance their portfolios and remain invested rather than retreating to cash," said Olson.

Encouraging a Fresh Start

The Fresh Start service is being promoted with a national advertising and marketing campaign that debuted Super Bowl Sunday with new television commercials and print ads in major daily newspapers. The television spots, featuring an investor who runs away from a postman delivering brokerage statements, will air on national television and cable networks including NBC Meet the Press, ABC This Week, CBS Pebble Beach Golf, as well as CNBC, FOX News, CNN, Discovery, and Bravo. Television ads will also run in local markets on prime, late news and cable. Print ads promoting the offer will run in major daily newspapers such as the Wall Street Journal, USA Today, and the New York Times, as well as some local newspapers; and national business and general interest publications including the New Yorker, Newsweek, Business Week, Time, and The Economist.

To take advantage of Fresh Start, investors must contact Schwab for an appointment by February 28, 2003, complete the consultation by May 30, 2003, and deposit $25,000 into a new or existing Schwab account. Fresh Start appointments are available at more than 370 Schwab investor centers nationwide. For more information or to make an appointment, investors can call 800-790-7715 or visit www.schwab.com/freshstart.

Advisors working with Schwab Institutional, including those in the Schwab Advisor Network, have access to a similar service. With a minimum net new deposit of $25,000, commissions on equity trades may be waived if determined appropriate by the advisor for the investor's portfolio. The $95 fee does not apply due to the fee-based structure of an advisor relationship, which includes ongoing portfolio review.

Schwab provides a clear alternative to traditional Wall Street investment advice with an expanding array of independent, conflict-free financial advice. These services include Schwab Private Client, which provides a one-on-one relationship giving investors the attention they need while allowing them to stay involved and in control; Schwab Advisor Network, which provides referrals to help investors choose an independent, financial advisor from an elite, hand-selected group of professionals; and Schwab Equity Ratings, an objective system for rating more than 3,000 U.S. stocks that is free from investment banking and commissioned-based sales conflicts.

About Charles Schwab

The Charles Schwab Corporation (NYSE:SCH), through Charles Schwab & Co., Inc. (member SIPC/NYSE), U.S. Trust Corporation, CyberTrader, Inc. (member SIPC/NASD) and its other operating subsidiaries, is one of the nation's largest financial services firms serving 8.0 million active accounts with $765 billion in client assets, as of Jan. 21, 2003. The Charles Schwab, U.S. Trust and CyberTrader Web sites can be reached at www.schwab.com, www.ustrust.com and www.cybertrader.com, respectively.

The Fresh Start offer is a Schwab brokerage service, and all accounts are non-discretionary brokerage accounts. Individual investors must respond by February 28, 2003, and be available to complete the consultation by May 30, 2003. Schwab will waive commissions and fees only for trade orders that Schwab recommends for equity positions held at Schwab and that individual investors place in conjunction with the consultation. Net new assets excludes margin loans and transfers between Schwab accounts. For new customers, offer subject to account application acceptance by Schwab. Offer not transferable or valid in conjunction with any other Schwab offer. Open to U.S. residents only. One offer per household. See Fresh Start Terms and Conditions for other limitations and conditions. Household balances of less than $50,000 may trigger quarterly or annual account service fees in your account(s). For household balance definition and other details, see the Charles Schwab Pricing Guide.

Schwab Private Client is a service of Charles Schwab & Co., Inc. Accounts are non-discretionary and advice about your securities portfolio is part of our brokerage service. Additional fees and charges may apply.

Advisors pay Schwab fees to be members of the Schwab Advisor Network(tm). Network member advisors are independent and not employees or agents of Charles Schwab & Co., Inc. ("Schwab"). Schwab prescreens advisors and checks their experience and credentials against criteria we set. Investors must decide whether to hire an advisor and what authority to give them. Investors must also evaluate their advisor's service and performance. Schwab does not supervise advisors and takes no responsibility to monitor advisor's performance or transactions in investors' accounts.

The Schwab Center for Investment Research is a division of Charles Schwab & Co., Inc.

(0103-7116)

(1) Source: Schwab Center for Investment Research with data from Ibbotson Associates. The market is represented by total monthly returns of the S&P 500 Index, January 1926-October 2002. Cash is represented by total returns of the 30-day T-bill. The 14 bear markets analyzed are defined as period with cumulative declines of at least 10% and duration of at least 6 months, and do not include the current market. Indices are unmanaged, do not incur fees or expenses, and cannot be invested in directly. Past performance is no indication of future results.