Introducing Schwab Stock Slices™ – Designed to Make Investing Easier and More Accessible

With Schwab Stock Slices, investors can own any of America’s leading companies from the S&P 500 for as little as $5, even if their shares cost more

SAN FRANCISCO–(BUSINESS WIRE)–In its latest move to simplify and democratize investing, Charles Schwab today announced plans to introduce Schwab Stock Slices™, a new service that enables investors to own any of America’s leading companies from the S&P 500 for as little as $5 each, even if their shares cost more. Using the new service, which will launch to clients on June 9, investors can purchase a single stock slice or up to 10 different Stock Slices™ at once, commission-free – just like regular online stock trades at Schwab.

“At Schwab we believe stock ownership should be accessible – this is the premise on which Chuck founded our company, and it remains true today,” said Jonathan Craig, senior executive vice president and head of Schwab Investor Services. “But getting started as an investor can be overwhelming, and often those stocks that are most relevant and appealing are also the most expensive, and out of reach for many. With the introduction of Schwab Stock Slices we’re leveling the playing field – across all retail channels that clients can trade stocks, they can now buy slices of stock.”

Schwab Stock Slices will give investors the ability to sort and search companies by ticker, company name and sector. The service will also give investors the opportunity to create and purchase their own bundles of stocks based on their needs and interests. All Schwab clients also have access to a range of educational resources and research including stock screeners and Schwab Equity Ratings®, the firm’s proprietary method for rating stock performance.

“Even with the recent volatility, we’re seeing high levels of engagement from many who see this as an opportunity to get into the market, and fractional shares trading through Schwab Stock Slices will provide an easy platform to do that,” said Neesha Hathi, executive vice president and head of Schwab Digital Services. “Whether it’s a new investor who simply wants to get started or someone more experienced who still finds the stock price of some companies daunting, giving investors the opportunity to buy small slices of stocks is an extremely powerful tool to help people get engaged.”

How Schwab Stock Slices Work

Once someone selects the single stock or collection of stocks they want to purchase, the total dollar amount invested is split evenly across each stock, and slices of shares can round as narrowly as four decimal places. For example, a $50 investment across five stocks would appear as a $10 purchase of each stock, and the order would show the number of shares or fraction of shares that $10 would buy based on stock prices at the time of execution.

Schwab Stock Slices will give investors the power to build a portfolio of stocks for a small fraction of what the total price would be otherwise. For example, for just $25, an investor could own pieces of Apple, Amazon, Facebook, Google, and Netflix when purchasing one full share of each would otherwise cost a total of approximately $4,500.*

Once a trade order is executed via Schwab Stock Slices, each stock fraction will appear in a client’s brokerage account to be held or sold individually going forward. Investors will also be able to choose to automatically reinvest cash dividends into the purchase of additional shares (or fractional shares) of those stocks. Schwab Stock Slices will be available in retail Schwab brokerage, custodial, and individual retirement accounts (IRAs), and clients using the service will be able to trade shares in real-time throughout the trading day using market orders.

Giving the Gift of Stock Ownership

Because Schwab custodial accounts are eligible, investors can use Schwab Stock Slices to get their children or grandchildren engaged with investing in an accessible and educational way. Once a Schwab custodial account is open and funded, the custodian can purchase stocks in small dollar amounts in the same way they would in a traditional brokerage account. A downloadable certificate of stock ownership can be personalized and given to a minor to inform them of the stock purchase.

“We developed Schwab Stock Slices to meet two important needs we heard from clients – newer investors who want the ability to buy multiple stocks in small dollar amounts and older more affluent investors who want to more easily gift stock ownership to younger generations,” said Hathi. “This is our first use of fractional shares, and we’re looking forward to exploring additional ways we can use the functionality to improve how clients invest.”

More information about Schwab Stock Slices is available at schwab.com/stockslices.

About Charles Schwab

At Charles Schwab, we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.

More information is available at www.aboutschwab.com. Follow us on Twitter, Facebook, YouTube and LinkedIn.

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with more than 360 offices and 12.7 million active brokerage accounts, 1.7 million corporate retirement plan participants, 1.4 million banking accounts, and $3.50 trillion in client assets as of March 31, 2020. Through its operating subsidiaries, the company provides a full range of wealth management, securities brokerage, banking, asset management, custody, 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 Schwab Advisor Services. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at www.schwab.com and www.aboutschwab.com.

Disclosures:

*Approximate share prices as of May 4, 2020

All corporate names are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security.

Schwab Stock Slices is not intended to be investment advice or a recommendation of any stock. Investing in stocks can be volatile and involves risk including loss of principal. Consider your individual circumstances prior to investing.

The standard online $0 commission does not apply to trades placed through a broker ($25) or by automated phone ($5). See the Charles Schwab Pricing Guide for Individual Investors for full fee and commission schedules.

Investors and clients should consider Schwab Equity Ratings as only a single factor in making their investment decision while taking into account the current market environment.

(0520-0VBZ)

Contacts

Michael Cianfrocca

Charles Schwab

415-930-3651

michael.cianfrocca@schwab.com