Key Findings

Finding #1:

Two-thirds say it's "extremely important" they receive competitive pricing on bonds

 
Importance of "knowing I'm receiving competitive pricing" where I buy/sell bonds
(All respondents) 

                

Q19: How important are each of the following to you for the firm or firms you use when buying or selling individual bonds?
(Base: All respondents = 510)
 

Attitudes regarding the pricing of bonds
(All respondents)

Q15: How much do you agree or disagree with each of the following statements?
(Base: All respondents = 510)

Finding #2:

Bond investors are confused about what investment firms charge to buy or sell individual bonds 

 
Importance of "having a clear understanding of all mark-ups and fees"
(All respondents)

Q19: How important are each of the following to you for the firm or firms you use when buying and selling individual bonds?
(Base: All respondents = 510)

 

Perceptions on how firms are compensated for the sales of bonds
(All respondents)

Q16: Which of the following best describes how the firm(s) you use to buy individual bonds is compensated?
(Base: All respondents = 510)

 

Perceptions on mark-up by investment firms on each $1,000 bond
(All respondents)                                                                               Aware of mark-up: 27%
                                                                                                   Perceived average mark-up: $6.10

Q17: If the firm you use to buy bonds is compensated by "marking up" the base price of a bond, how much is that mark-up on each $1,000 bond?
(Base: All respondents = 510) 

Finding #3:

Two-thirds say it's "extremely important" to know the issues or risks associated with a specific bond

 
Importance of when buying and selling individual bonds
(All respondents)

Q19: How important are each of the following to you for the firm or firms you use when buying and selling individual bonds?
(Base: All respondents = 510)

About The Bond Investor Study by Charles Schwab

The Bond Investor Study by Charles Schwab was an online survey of U.S. investors conducted by Koski Research in September 2011, and has a 4.4 percent margin of error. A total of 510 respondents completed interviews. Survey respondents had a minimum of $250,000 in total investable assets, ranged in age between 25 and 75, had $25,000 invested in bonds directly, and had purchased individual bonds within the past two years. Survey respondents were not asked to indicate whether they had accounts with Charles Schwab. All data is self-reported by study participants and is not verified or validated. Investors participated in the study between September 6 and September 16, 2011.

Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed income investments are subject to various other risks including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications, and other factors.

Schwab reserves the right to act as principal on any Bond transaction. In secondary market principal transactions the price will be subject to our standard mark up in the case of purchases and a mark down in the case of sales, and also may include a profit or loss to Schwab. When trading as principal, Schwab may hold the security in its own account prior to selling it to you, or may resell it after buying from you and, therefore, may make (or lose) money separately from the markup on the transaction.

© 2011 Charles Schwab & Co., Inc. (Member SIPC) All rights reserved.

Investing involves risk, including possible loss of principal.

The Charles Schwab Corporation provides a full range of securities, brokerage, banking, money management, and financial advisory services through its operating subsidiaries. Its broker-dealer subsidiary, Charles Schwab & Co., Inc (“Schwab”), Member SIPC, offers investment services and products, including Schwab brokerage accounts. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides deposit and lending services and products. Schwab Advisor Services™ serves independent investment advisors and includes the custody, trading, and support services of Schwab. Independent investment advisors are not owned, affiliated with, or supervised by Schwab. Schwab Retirement Plan Services, Inc. and Schwab Retirement Plan Services Company provide recordkeeping and related services with respect to retirement plans. Brokerage Products: Not FDIC Insured • No Bank Guarantee • May Lose Value

#1011-6960