And we're live. Good morning and good afternoon, everyone, and welcome to the Charles Schwab Corporation's 2021 Annual Meeting of Stockholders. This is Rich Fowler, Head of Investor Relations for Schwab, and we want to thank you for joining us as we once again gather via the Internet so that we can conduct today's business while maintaining still appropriate social distancing. Even Schwab executives are participating from different locations this year with our Chairman and CEO, for example, joining from our new company headquarters in Westlake, Texas. We certainly hope you're all safe and well wherever you may be as the country continues to work its way out of the pandemic's grip.
Just a quick word on our agenda and then we'll get started. Today's meeting follows our traditional course. Chuck Schwab will start us off and guide us into the rest of the day, and we will have time for questions later on. There's a box on your webcast console for submitting them. And with that, it is my honor to introduce our Founder and Chairman, Chuck Schwab.
Thank you very much, Rich. It's a real pleasure to address our shareholders, our 34th meeting since going public. I remember all those days early on and certainly nice to be a wonderful successful company as we have over the last really almost 50 years now. So anyway, last year, we were holding our annual meeting remotely. And guess what, we're handling again remotely now.
But more special is that I'm participating across the country and I know many others are across the country. But Walt and I happen to be right now in our wonderful headquarters here in beautiful Westlake, Texas, in our beautiful campus, where eventually we'll have probably 6,000 to 7000 employees over time. It's just about half hour away from the Dallas Fort Worth Airport. I would suggest any of our shareholders have every other chance out in this territory come by and visit is pretty to me it's a one of a kind campus. So anyway, our agenda today will include of course Walt Boettinger who will bring us up to date on some plans for the future and a little comments about where we are as of today.
So we'll start off the agenda. First part will be Peter Morgan, our General Counsel will cover the business agenda today, which usually is pretty short and covers some of the things that we all voted on earlier, and I hope everyone has voted. Then following Peter's presentation on the business agenda, we'll hear from Peter Crawford. We have quite a few people with Peters in our organization here. Peters are been with us a long time and he's now our Chief Financial Officer and he'll be talking about the spectacular results we had in 2020.
It's hard to contemplate that we had this epidemic and what we were able to accomplish through last year is pretty remarkable. And so we're really happy to describe how we did it and some of the results that came from that. It was a momentous year under any circumstances, the COVID pandemic. And so I think we're all looking forward with great excitement to what will be our future post epidemic. After Peter's presentation, Walt will provide the CEO report as he always does, and he'll share his perspectives on the company's future and certainly our strategy to get there.
And then Walt and I, following all that, we'll take questions. And please take a few moments to write a few down, and Rich Fowler will let you know how to submit them to us. But first, I would like to before we move on, I'd like to recognize our Board of Directors. They are joining us remotely, of course, which we have encouraged everyone to do that. We're thinking about maybe our first real in person board meeting might be sometime in October.
We're making sure everyone's got COVID vaccines and I recommend that for everybody. I've had mine too and I know everyone in this room has had their 2 also. So our directors have been an unbelievably important contributor this year, right on through from the acquisition and the merger we had with TD Ameritrade. It's been fantastic. But I want to thank all of our Board for participating.
I would like to recognize each one of them. I'm going to call them out by name. Normally, I would have them stand up, but if you can please remain seated wherever they are. John Adams. John, thank you for being with us.
Walt Benninger, right in front of me. Mary Anne Brown. Mary Anne just joined us recently and last year. She has many accomplishments to point to, but she's now or she is the former Co Chief Operating Officer at Fidelity National Information Services. We really appreciate her wisdom and business experience as a part of our Board.
Joan Day is on our Board, has been for a number of years now. Chris Dobbs, Steve Ellis, Mark Goldfarb, Bill Herra, Frank Harringer. Brian Levitt is new to our Board. Brian is presently the Board Chair of Toronto Dominion Bank, joined our Board last year following our acquisition of TD Ameritrade. Another new member of our Board is Mary Martin Flickinger.
Jerry joined the board in 2020 also, and she presently is the Executive Vice President Chief Technology Officer at Starbucks. Very important job and obviously lots of background and wisdom that she can provide to us, particularly in this demand we have for all our new technology. Also new to our Board is Bharat Masrani. Bharat is the well, has joined our Board last year with the acquisition of the TD Ameritrade. And Barrett is Group Vice President and Chief Executive Officer of the Toronto Dominion Bank, one of Canada's great leading banks for sure.
And then another new member of our Board is actually Todd Rickus. He's son of Joe Rickus, who's a great old friend of mine who started Ameritrade years ago. And he and I are pretty much of the same ilk, I guess, founding entrepreneurs and it's a real pleasure to have Todd join us and representing the Ricketts family on our Board following our acquisition. And Todd also happens to be the Director of the Chicago Cubs. Go Cubs, go Cubs.
And then finally, I have 2 other or 3 other members of our Board, Charlie Ruffle, Arun Sarin and finally Paula Snee. Certainly, I want to thank all of you for your service to the company and but before I move on from our directors, I just have to make mention of Roger Walder. Walder is stepping down from our Board, has stepped down officially as of the end of the year. But Roger served on our Board, it's hard to believe, ever since we went public back near we went public in 'eighty seven, but he started on the Board in 1989, 31 years ago. And I know he was thinking about getting off the board, but he wanted to wait, he said, Chuck, I'm going to wait until we get this merger done.
We've worked so hard on so many things to get there. So I will retire after. So he did so at the end of this year. But thank you, Roger. You played an important part of role as a Director and all our transformations to get us to this point.
So thank you very much. Then I have to move on. We have up for election. Currently, 6 of our Board members are up for election this year. That would be Walt Bettinger, Joan Day, Chris Dodds, Mark Goldfarb, Bharat Mejrani and Charlie Ruffle.
So if you haven't voted yet, you have a chance, I think, in the next few minutes to do so. We want to make sure every vote is counted and we'll have the tabulation of that to report to you all just in a few moments. I want to take just one further moment here to really express my gratitude to not only our management team, they've been fantastic and usually I have them step up and be recognized at our annual meetings, but of course, virtual, we can't do that. But I wanted to really point to our employees, some 20,000 employees plus the new employees who came over from Ameritrade, 12,000 of them. And I just want to recognize them as what I would consider rather than a merger, more of a marriage between 2 companies of similar customs, similar ways of treating clients, our integrity, the way our founding based upon great value.
I think we all have in this game to serve our clients with the same similar attitude. And I just can't thank them enough to come over and become a part of one company and we're all in this together for sure. But thanks to all of those employees this year, obviously had to work for the most part from their home, which is not too bad, but they've done an incredible job, long hours of supporting these high bar now 32,000 employees. We are very pleased with the integrations going on and the attitudes are upbeat and I think our culture is alive and well here. So Walt will make some further comments, I think, in his remarks a little bit later on.
So on behalf of our the Board, thank you so much for your professionalism, all employees and the grit in such grueling challenging environment as it has been this last 12, 14 months or so. It's been a real test of our stamina for sure. So now on with the business portion of our meeting, I'm going to turn on to Peter. Morgan, I think you're going to take that on. Peter?
Yes. Thank you, Chuck. As the first item of business, I would like to introduce and our independent auditors. The Board of Directors appointed the Inspector of Election to conduct a voting for this meeting. This year, our Inspector of Election is a Quinity Trust Company.
A representative of the Quinity, Kiley Roth is with us today. Ms. Roth has filed an oath of Inspector with me. She has also informed me that based on the preliminary count, we have a quorum for this meeting because 90% of company's approximately 1,800,000,000 shares that are entitled to vote are represented by proxy at this meeting. Our independent auditors are Deloitte and Touche LLP.
Ms. Diane Wallace of Deloitte and Touche is here at the meeting and will be happy to respond to your questions during the question and answer period. Polls are now open for voting on the proposals. If you were a stockholder as of March 15 this year and have not returned your proxy card, voted by telephone or voted on the Internet or would like to change the instructions in your proxy card or your telephone or Internet vote, you may vote at this time. For those of you attending our virtual meeting, you may click on the Vote Now button the webcast console to cast your ballot.
Now I would like to present the 3 proposals we are asking stockholders to vote on this year. The first proposal is to elect 6 directors. This year, Walter Bettinger, Joan Day, Christopher Dodds, Mark Goldfarb, Barrett Masrani and Charles Ruffle have been nominated for election to the Board of Directors. The second proposal is to ratify the selection of Deloitte and Touche as the company's independent auditors. And the 3rd proposal is for advisory approval of named executive officer compensation.
The Board of Directors has recommended that you vote in favor of each of the proposals to elect directors, ratify the independent auditors and provide advisory approval of named executive compensation. Each of these proposals is described in the company's 2021 proxy statement. If you would like to review our 2021 proxy statement, you can review it online at www.boutschwab.com. We also have been notified that stockholders intend to present 2 proposals for your consideration at this meeting. Amy Carr, representing Friends Fiduciary Corporation, will present the 1st stockholder proposal, requesting disclosure of lobbying policy, procedures and oversight, lobbying expenditures and participation in organizations engaged in lobbying.
Ms. Carr, will you please present the proposal?
Good afternoon, fellow shareholders and members of the Board. My name is Amy Carr. I am a shareholder advocate at Friends Fiduciary Corporation. We are long term shareholders of Charles Schwab. I hereby move Item 4, asking our company to prepare a report on direct and indirect lobbying activities and expenditures to assess whether its lobbying is consistent with its expressed goals and in the best interest of stockholders.
Company transparency and accountability are in the best interest of Charles Schwab shareholders. This proposal would allow shareholders to evaluate the company's direct and indirect lobbying through 3rd party lobbying spending and ensure that sufficient internal accountability structures are in place to manage and minimize risk. Our proposal asked the company to disclose membership in and payments to trade associations and 501(4) social welfare groups. Corporate payments to these groups have no restrictions. This means that companies can give unlimited amounts to 3rd party groups that spend 1,000,000 on lobbying and often undisclosed grassroots activity.
For example, Schwab serves on the Board of the Securities Industry and Financial Markets Association, which spent over 50 $8,000,000 on lobbying from 2010 to 2018. Ann Schrob previously served on the Board of the Chamber of Commerce, which has spent over $1,500,000,000 on lobbying since 1995. Shareholders do not know our company's process for evaluating any misalignments of the company's policy positions with the positions of the trade associations and 501(4) social welfare nonprofits it contributes to. Such misalignments can pose significant reputational risk. Without sufficient disclosure of contributions to trade associations and 501(4) social welfare groups, shareholders have no way of knowing whether and to what extent Schwab is exposing itself to reputational risk.
Proxy advisor ISS supports this proposal, noting that Schwab's overall lobbying disclosure is not sufficiently transparent. In their assessment, they also note that additional information on the company's trade association memberships, payments and oversight would enable shareholders to better assess the company's comprehensive lobbying related activities and management of related risks and opportunities. Shareowners need complete disclosures to be able to evaluate the use of corporate assets for lobbying and any risk that spending can pose. The company could easily and inexpensively provide this information. We urge shareowners to vote for Item 4.
I am finished presenting the stockholder proposal.
Thank you, Ms. Carr. James McRitchie representing himself will present the 2nd stockholder proposal requesting
Yes. Thank you very much. Proposal number 5, once again, asked our company to declassify the Board. So each director stands for election every year. 90% of the S and P 500 have declassified Boards.
Shareholder resolutions on the topic won 14 out of 15 votes at companies in the last couple of years according to data compiled by Proxy Insight, most by a wide margin. Our largest shareholder Vanguard votes to declassify Board. Our 2nd largest shareholder BlackRock writes, directors should be elected annually to discourage entrenchment and allow shareholders sufficient opportunity to exercise their oversight of the Board. According to governance experts, Equilar, a classified Board creates concern among shareholders because poorly performing directors may benefit from an electoral reprieve. Moreover, a fraternal atmosphere may form in a staggered Board that favors the interest of management above those of shareholders.
Since directors and declassified Board are elected and evaluated each year, declassification promotes responsiveness to shareholder demand and pressures directors to perform to retain their seat. Proxy advisory firms ISS and Glass Lewis both support declassified structures. Consider also that shareholders at Schwab cannot call special meetings. They cannot act by written consent and you don't even know where our lobbying funds where all our lobbying funds are spent. The combined effect is to lock our Board into an outdated corporate governance structure and reduce accountability to shareholders.
I just got a response to a question that I submitted regarding how long the Board will leave the polls open. And they have assured me that they will leave the polls open for a moment or 2 after the presentation to allow time to vote. And I thank you very much for that. So I had a whole thing here in order to ramble on so that you could vote, but I'm happy for that reassurance. So I'll close by once again asking you to vote for proposal number 5, requesting a declassified Board and also please vote for number 4 as well.
Thanks for your consideration.
Thank you, Mr. McRitchie. The Board of Directors has recommended that you vote against these stockholder proposals. The statements against these proposals are contained in the 2021 proxy statement. If you are participating in the virtual annual meeting, please click on the Vote Now button to cast your ballot electronically through the Internet at this time.
If you have completed a ballot during the meeting, your vote will be counted at the end of the meeting and reflected in the final report of the Inspector of Election and in the minutes of the Annual Meeting. Polls are now closed. Inspector of Election has completed a preliminary count of the proxies that were voted during the weeks leading up to this meeting. The preliminary count shows that more than 78% of the shares voting on a proposal and present at the meeting by proxy have been voted in favor each of Walter Bettinger, Joan Day, Christopher Dodds, Mark Goldfarb, Barrett Masrani and Charles Ruffle. So they have been elected to the Board of Directors.
More than 95% of the shares voting on the proposal and present at the meeting by proxy have been voted in favor of the ratification of the selection of Deloitte and Touche as the company's independent auditors and that proposal has been approved. More than 94% of the shares voting on the proposal and present at the meeting by proxy have been voted in favor of the advisory approval of named executive officer compensation, and that proposal has been approved. Less than 44% of the shares voting on the proposal and present at the meeting by proxy have been voted in favor of the in organizations engaged in lobbying and that proposal has been defeated. More than 67% of the shares voting on the proposal and present the meeting by proxy have been voted in favor of the approval of the stockholder proposal requesting declassification of the Board of Directors to elect each director annually and that proposal has been approved. This adjourns the business portion of the meeting.
Thank you very much for your attention. We will now hear from our Chief Financial Officer, Peter Crawford.
All right. Well, thank you very much, Peter. It's always a privilege for me to be able to speak to our stockholders, though still a little different as we meet once again virtually rather than in person. I want to see what our format looks like next year. Speaking of next year, that brings us to our ever important forward looking statements page, the intent of which is to remind you all that Walt and I will be communicating our thoughts on the future.
And of course, the future is inherently uncertain. So please check-in with us and review our periodic updates, including our quarterly webcast to make sure you have the latest information and perspective on the company. Now before we talk about the future, let's talk about the past and specifically 2020, an extraordinary, unprecedented, volatile and certainly challenging year. It was also a year during which we met those challenges head on, pressed ahead on our strategic agenda, supported our clients and employees and emerged in an even stronger position than at the outset of the crisis. We did all this as we delivered solid financial results in spite of an environment that was generally challenging for our business model.
The biggest environmental headwind, of course, was from dramatically lower interest rates across the curve, an outcome of the onset of the pandemic and the Fed's response. The equity markets moved around a lot, dropping dramatically in the early part of the year, then recovering quickly and finishing the year sharply higher. As we always try to do when the world around us is unpredictable, we focus on what we can control, producing strong organic growth as measured both by net new assets and new accounts and closing on the TD Ameritrade acquisition, which contributed to 66 percent growth in total client assets and 140% growth in active brokerage accounts. And finally, trading activity increased over roughly 2 50% year over year, a function of very strong client engagement throughout the year and in the Q4, the inclusion of TD Ameritrade's active trader community in our consolidated metrics. Our financial performance reflected those environmental dynamics as well as the inclusion of TD Ameritrade for most of the Q4.
Revenue grew 9% to nearly $11,700,000,000 Now before I talk about expenses, I want to provide a quick reminder that we introduced some selective non GAAP measures last year to supplement our GAAP measures and shed light on our core operating financials, which can be hard to glean given the 4 acquisitions we closed in 2020. These non GAAP measures fall into 2 categories. 1st is adjusting expenses to remove acquisition and integration costs that tend to fluctuate from one period to the next as we close acquisitions and move through the integration process. And adjusted expenses, we also remove amortization of acquired intangibles that is created via purchase accounting and of course is a non cash expense. These adjustments flow through into other downstream measures including adjusted pre tax margin and adjusted earnings per share or EPS.
And the 2nd non GAAP measure is return on tangible common equity. The return part of the equation includes the same adjustment to expense that I just described. The denominator is also adjusted to exclude goodwill and acquired intangibles from the equity base, two items which as I mentioned are created via purchase accounting. So that is context, you can see that adjusted expenses grew 16% year over year, a function of absorbing TD Ameritrade and 3 other entities, as well as a sharp increase in volume related costs. And we produced a 42% adjusted pre tax margin, which I hope you'll agree is quite respectable given the extremely challenging environment we faced and a 15% return on tangible common equity.
Not only does the combination of Schwab and TD Ameritrade create a better position firm with greater scale and a broader set of capabilities, but it also creates a firm with a more diversified revenue model. The combined firm is less reliant than TD Ameritrade was on trading revenue, which tends to be quite volatile and is less reliant on net interest revenue than Schwab was historically. Even when you include that slice called BDA revenue, which you can see at the bottom of the column, which is the revenue we now earn from TD Bank and other third party banks to whom we direct client sweep deposits on the TD Ameritrade platform. Now looking at the combined firm's 4th quarter revenue, you can see that a little more than a third of our revenue comes from trading, margin lending and securities lending, which are components of net interest revenue, but tend to correlate somewhat with investor engagement. A little more than a third comes from other net interest revenue and the BDA fees, essentially spread based revenue aligned with our client cash strategy.
And a quarter of revenue comes from asset management and admin fees, which tend to correlate with the equity markets. And so this combination creates a very nice diversification and more and greater resilience in our business model. The strong momentum we enjoyed throughout 2020 and especially towards the end of the year continued throughout the Q1. We also benefited from an improving macroeconomic environment highlighted by higher equity markets and interest rates starting to move higher, as well as continued positive investor sentiment as reflected in higher margin balances and trading. This combination produced very strong financial performance.
Given that our reported financials didn't include TD Ameritrade in the Q1 of 2020, we are comparing our results instead to the Q4 of last year. Revenue increased 13% sequentially, driven mostly by a 42% increase in trading revenue. Our expenses increased 9% sequentially, reflecting seasonal items such as payroll taxes and compensation and higher volume related expenses. With 400 basis points of operating leverage sequentially, our adjusted pre tax margin increased 2 points to over 47%, while our return on tangible common equity climbed to 24%. And all of this in the midst of an environment where interest rates are still at extraordinarily low levels.
Now as we look ahead towards the rest of the year, our financial outlook depends as always on some external and often unpredictable dynamics, including market performance, interest rates, client engagement and cash allocations. And as I mentioned a moment ago, the acquisition of TD Ameritrade has changed our revenue model and made us more reliant on trading, margin lending and securities lending. The underlying drivers of these sources of revenue, daily average trades, margin balances, etcetera, have reached record levels. And given that we're in uncharted waters with the both the nature of that activity and the nature of the recovery, there is a wider range of possibilities for what the future might look like. At Schwab, we try not to put an undue focus on the stock price, recognizing that is influenced by a number and adjusted earnings per share up 87% over the same time period, representing a 17% annual growth rate.
And this translated into a 14% compound annual growth rate in our stock price from the beginning of 2016 through the end of the Q1 of 2021. Our number one priority for capital management is enabling the continued growth of our business, supporting our clients who choose to entrust us with our cash allocation. Our March preferred issuances boosted our Tier 1 leverage ratio to 6.4%, still below our operating objective of 6.75% to 7%, our highest level in a year and well above the regulatory minimum. Going forward, we expect of course to maintain our $0.18 quarterly dividend and starting at the end of the second quarter begin migrating some of the balances currently sitting in the BDA with TD Bank over to our balance sheet. With all the moving pieces this year, we thought it would be helpful to remind everyone about our long term financial formula.
By long term, I mean, the formula works through the cycle rather than something that is going to happen each and every single year. Assuming a continuation of 5% to 7% organic growth and average market appreciation, we expect client asset growth of high single digits. Through our diversified revenue model and ongoing win win monetization efforts, we should be able to convert that high single digit growth in client assets into a comparable level of revenue growth or even a bit better. By maintaining long term expense growth in the mid single digit range, we should be able to expand margins and through ongoing capital return deliver even stronger growth in earnings per share. Now as we proceed through the integration, the individual elements may play out stockholders and doesn't rely on increases in interest rates.
Let me close with a few thoughts. Despite all that is changing around us, our through clients eye strategy has not changed. And that's because it's working and it's as relevant as ever, producing robust organic growth, significant competitive advantages and a very compelling value proposition for clients. We're quite gratified by the success we're enjoying and the impact we're having on our clients. At the same time, we're neither complacent nor satisfied, but instead focus 100% on continuing to get better.
And you should see that our priorities moving forward are also quite consistent with what we have been focused on traditionally and what has made us successful for over 40 years, focusing on clients and winning in the marketplace, producing strong top line revenue growth and being disciplined in how we manage capital and expenses, we deliver for stockholders even as we deliver for clients. That's what you've come to expect from us and that's what you can expect from us in the years ahead. With that, it's my pleasure to turn the mic over to Walt.
Thank you, Peter, and thank you to all of our valued clients and stockholders who are participating with us today. I believe this is the 15th time that I've had the honor of speaking with all of you at our Annual Meeting. 2020 was an extraordinary year. But before I discuss how your company performed during 2020, I want to take a moment to acknowledge the pain, the mental and emotional challenges and the tragic loss of life from the pandemic. My personal thoughts and prayers go out to everyone impacted by this awful virus.
I also want to share my gratitude to the tens of thousands of Schwab employees who worked so hard and in such a dedicated manner to serve our clients, while working from home and protecting themselves and their families. And then I also want to thank our tens of millions of loyal clients for their trust and understanding during 2020 and into early 2021. There were multiple times that our service levels were not at the standard that we expect of ourselves and that you have grown to expect from us. I'm often asked what we did differently to enjoy such success in 2020. And my response is always the same.
We stayed committed to our strategy, evaluating everything we do through client's eyes operating our company under the guidance of the Golden Rule. This strategy combined with a commitment to a no trade offs approach to serving clients led us to record results almost across the board. And we believe our strong positioning means we are just getting started in terms of our future potential for growth. The environment last year was extremely choppy. The variation between bear and bull sentiment was one of the most dramatic shifts in the course of a single calendar year that I've seen in my almost 4 decades in this business.
Nevertheless, as you can see from the chart in the upper right, long term investors were rewarded for their patience and commitment to disciplined investing as the market reached new highs by year end. These same investors entrusted us with a record $282,000,000,000 of core net new assets in 2020. In addition, they opened just over 3,000,000 new accounts during the year, another record. And as impressive as those figures are for 2020, the beginning of 2021 has been even more remarkable. Core net new assets in the Q1 of this year were almost $150,000,000,000 more than double the Q1 of 2020.
And remarkably, clients opened more new accounts in the Q1 of 2021 than in the entire year 2020, which keep in mind again was a record. We are incredibly honored and grateful to our clients for the trust that they placed in us throughout 2020 and into early 2021. And I just want to again offer my gratitude to our clients. Now in addition to entrusting us with almost $150,000,000,000 in core net new assets in the Q1 of this year, clients engaged with us at record levels across a broad array of our service offerings, whether it was trading as illustrated in the upper left, a margin borrowing or importantly meetings with certified financial planners at Schwab, our clients are deeply engaged in their financial relationship with us. From a stockholder standpoint, our strategic focus revolves around 3 critical initiatives for long term growth: scale and efficiency, win win monetization and client segmentation.
Now without going into excessive detail, I want to briefly mention what is behind each of these three efforts. Scale and efficiency allows us to serve clients in a world class manner, efficiently and at an industry leading low cost. As clients entrust us with more assets and we grow and become more efficient, we're able to lower our overall operating expenses and then share a portion of those savings with our clients as well as with our stockholders. Win win monetization means we strive to find ways that grow our revenue, but only in manners that are also good for our clients. I received plenty of proposals that involve ways to grow our revenue.
But my first question is always, how are these proposals good for our clients? Growing revenue in ways that don't also benefit our clients is a short term thinkers approach and one that Chuck, our Board and the entire leadership team do not support. However, when there are ways to better serve our clients, offer them improved solutions and grow our revenue, that is win win monetization. Client segmentation revolves around our efforts to better serve the unique needs of different clients. With over 30,000,000 client accounts, a one size fits all approach would not best serve each client.
As a result, we continue to enhance capabilities designed to provide the optimal level of service to each and every unique client of Schwab. So as we look forward to a post pandemic world, we remain incredibly confident in our ability to continue growing, serving clients in a world class manner and rewarding our stockholders for their long term commitment to ownership. Our market share is measured by client assets is just above 10% in the U. S, meaning that significant domestic growth opportunities still exist. That said, I want to reinforce my commitment to all our clients and stockholders.
We are a long term thinking company. We will continue to make decisions that balance the needs of all of our constituencies, our clients, our stockholders, our employees and the communities where we live and work. In a world where some commentators like to say that everything is new and that the appropriate role of companies in the world is actually changing, we believe that we have always been ahead of the curve. Chuck founded our firm 50 years ago based on the golden rule of treating others as we would like to be treated. And the golden rule remains the way we operate your company today and the way we will continue to operate it out into the future.
So Rich, I believe that wraps up the formal presentation portion of our meeting today, and I'm going to turn it over to you for our Q and A session with Chuck and I.
Yes. Thanks, Walt. So we have now indeed reached today's final segment, the Q and A session with Chuck and Walt. As I mentioned earlier, questions can be submitted via the webcast console. A number of questions have been pre submitted during the registration process.
Some of these and potentially others sent in during the session will be addressed individually due to length, technical nature or other factors. We do have some ready to go. So let's start with Chuck. We've spent a lot of time with stockholders recently discussing the overall environment and we're thinking maybe we could ask you to share your perspectives on that current market environment as it impacts investors. On the one hand, never been easier to participate, 0 commission, simple to access online platforms, even the ability to acquire fractional shares via something like our own stock slices.
On the other hand, there's a heck of a lot going on, economy, society in general working to recover from the effects of the pandemic, interest rate, policy once again at historic lows and even stock valuation suddenly being driven by social media postings of all things. Is this a good time to be encouraging young people and beginners to learn about and become involved in investing or not so much? What would you say?
Well, Rich, thanks for the question. I always like to take on what's the opportunity, the possibilities for our younger part of our segment of the population. It was really reassuring to me actually went into the pandemic, how many people spent their time, their extra time in front of their screen and many of them adopted the idea of maybe I should start thinking about investing. And so we had a record number of new clients come in who were of the younger set and we're so pleased with that because we also had our slices capability was available to them. And so people could modest sums of money.
That is really an encouraging thing. And I think looking to the future, it's not just today. Obviously, our investors beginning early in their youth I'll have to look at it in a 20, 30 year kind of engagement and something a commitment to it because Innovation America will not stop. It will I think everyone who is a solid America is all for the growth of this country. And I tell you the things I know whether it's medical science or whether it's energy development or any factor, any component of the country is devoted to growth for the future.
And the only way to really participate that is in a genuine way and earn share some of the growth is through stocks. And I think we're very pleased to be able to offer those services. I think there's also another component, right, concerned about Rich that our younger I mean, our older folks, me included, I'm a little bit older than the baby boomers, but the baby boomers are now retiring at a rate of 10,000 individuals a day. And so with 0 interest rates right now and concerns about where we're going as economy in the short term, people need to be thinking about how am I going to afford to retire and all those kinds of things. So that's a really important focus for this firm is to help our retirees are about to retire and doing the best job they can and getting the maximum income they can their accounts, combined with Social Security and other kinds of long term savings that they put together.
But that's going to be a big focus of our the young people as well as some of the older people. So anyway, Rich, I look with optimism for both those segments of our clientele.
All right. Thanks, Chuck. Walt, maybe we can ask you to take this next one. There appears to be limited ESG, SRI, socially responsible investing information available on Schwab.com. Where does the company believe that investing approach or thematic investing in general belongs in the individual investor landscape?
Well, thanks, Rich. Actually, we do have a fair amount of information available to clients on ESG investing, whether it is education or articles or actual screening tools available online to help people make decisions around ESG investing. We know that it is a rapidly growing area of the market. Also watch it carefully because it's an area where fees often are quite high relative to other investment opportunities. And we would like to see those costs go down for investors who are ESG oriented.
I think the greatest challenge around ESG investing today is that too often that form of investing is the details of it are determined by the individual who is running an ESG oriented fund or funds. And the challenge is that to each individual as they make decisions based on their personal values or their view of social issues, they may not always be in alignment with generic funds, whether they be mutual funds or ETFs. And so much of the emphasis that we are putting is on the development of personalized investing that would allow each individual to assemble a portfolio that is consistent with their own values and their own views around the societal impact of the investments that they make. And you'll see that manifest itself in the coming quarters as we introduce capabilities like thematic investing as well as personalized indexing, which will allow investors to really design a strategy around their personal objectives and the values that they would like to see in the companies that they put their dollars to more personalize their approach, in alignment with to more personalize their approach in alignment with their own values and their own views.
Okay. Okay. This next question comes from one of our younger stockholders, Masai Alansabi Davis. And he actually wants both of you involved in this. So I'm going to phrase this as best I can.
Mr. Chuck, if you were in my place, what is one question you would ask your CEO about owning Schwab stock? And therefore, Mr. Walt, what is going to be your answer to that question? And Masai tells us he just turned 13 for the record, just so you guys know.
I know Mr. Masai. He comes Master Masai, I should call him. He comes to every board meeting, every shareholder meeting that is over the last 4 or 5 years. I've gotten to know his mom and dad and so forth.
And there's an example of a young man is on a mission. He wants to be a great long term investor. And I was just so pleased that he started as a young age, about the age I started thinking about investing. And so thanks for commitment. You'll be a great leader as you move into your teenage years and hopefully through your other education, you'll be a great contributor to our society.
My question to Walt is, Walt, how are you going to keep this company growing? How are we going to keep our shareholders happy by virtue of the growth and hopefully earnings and dividends and new services? I think you did a little of that already, but
why don't you reemphasize that? Thanks, Chuck. And Masai, thank you for your question. I'm counting on you being a Schwabie someday, not just a client, but one of us. So we look forward to that.
Our philosophy is one rooted in the long term and I don't envision that changing. We believe that by operating the business through client size, by challenging ourselves at every turn as to whether is the decision we're making the right thing for our clients, We think that is the only path to long term success. I see many companies in many industries who take a short term approach and there are paths to increase earnings in the short run that are simply not ones that we'll follow. We're always going to look long term. We measure our success not in quarters.
Many times we don't even measure our success in years, but in decades. And that is a philosophy that Chuck has lived by, our Board has supported and I certainly advocate. So we're going to continue to say what's the right thing for our clients. We're going to let the short term be what the short term will be and focus on the long run. And I believe the stockholders who believe in that philosophy have been richly rewarded and I anticipate they'll be richly rewarded in the future.
Okay.
All right. Let's, I think take one more question given the timing here, and then we'll wrap up. This one I think is for Walt. We recently commented on the President's working group report on potential reforms to money market funds. Would you please share our thinking in now advocating for a variable net asset value on all prime and muni money funds?
I will. Thank you, Rich. I know this is a controversial topic with a lot of deep seated viewpoints around it. In fact, a decade ago when confronted with this issue post financial crisis, I actually wrote a op ed in the Wall Street Journal advocating for what I viewed at the time as a middle ground position that money market funds for institutions should go to a variable net asset value, but those targeted exclusively to retail investors could stay at a $1 stable, again, NAV or net asset value. I think as we look at it today, we arrive at a different conclusion.
And that is that, the underlying investments that a money market fund makes fluctuate in value. We all know that. It's no different than a variable net asset value mutual fund that has to be priced every day and regulators ensure that accurate pricing is performed or for that matter an exchange traded fund that actually has to be priced continuously throughout the day and regulators expect those prices to accurately reflect the underlying securities. A money market fund is really no different. You invest in securities whose value fluctuates.
Now often it does not fluctuate to an extreme extent, but it does move. And so it is less than fully transparent to say that a money market fund should have a perfectly stable net asset value when the underlying securities fluctuate in value. So in the context of transparency and being forthright with consumers, our view has moved to the place where we think that money market funds, prime money market funds and muni funds of all type should reflect that fluctuation so the consumer understands and therefore reflect a variable net asset value.
Okay. All right. With that, it is time for us to wrap up. So that concludes our 2021 Annual Meeting of Stockholders. I'd like to thank Chuck, Walt, Peter Crawford and Peter Morgan, the members of our Board and all of our attendees for joining us today.
Please take care and stay well, everyone. Thank you.