Segment Information

12 Months Ended

Dec. 31, 2016

Segment Information [Abstract]

Segment Information

23.Segment Information

The Company’s two reportable segments are Investor Services and Advisor Services. The Company structures its operating segments according to its clients and the services provided to those clients. The Investor Services segment provides retail brokerage and banking services, retirement plan services, and other corporate brokerage services. The Advisor Services segment provides custodial, trading, banking, and support services as well as retirement business services. Revenues and expenses are allocated to the Company’s two segments based on which segment services the client.

The accounting policies of the segments are the same as those described in Note 2. For the computation of its segment information, the Company utilizes an activity-based costing model to allocate traditional income statement line item expenses (e.g., compensation and benefits, depreciation and amortization, and professional services) to the business activities driving segment expenses (e.g., client service, opening new accounts, or business development) and a funds transfer pricing methodology to allocate certain revenues.

The Company evaluates the performance of its segments on a pre-tax basis. Segment assets and liabilities are not used for evaluating segment performance or in deciding how to allocate resources to segments. There are no revenues from transactions between the segments.

Financial information for the Company’s reportable segments is presented in the following table:

	Investor Services (1)						Advisor Services (1)						Unallocated						Total
Year Ended December 31,	2016		2015		2014		2016		2015		2014		2016		2015		2014		2016		2015		2014
Net Revenues:
Asset management and
administration fees	$	2,093	$	1,837	$	1,742	$	962	$	813	$	791	$	-	$	-	$	-	$	3,055	$	2,650	$	2,533
Net interest revenue		2,591		2,133		2,028		731		392		244		-		-		-		3,322		2,525		2,272
Trading revenue		524		556		606		301		310		301		-		-		-		825		866		907
Other (2)		199		234		218		72		94		74		-		-		51		271		328		343
Provision for loan losses		4		11		4		1		-		-		-		-		-		5		11		4
Net impairment losses
on securities		-		-		(1)		-		-		-		-		-		-		-		-		(1)
Total net revenues		5,411		4,771		4,597		2,067		1,609		1,410		-		-		51		7,478		6,380		6,058
Expenses Excluding Interest (3)		3,380		3,090		2,937		1,105		1,011		938		-		-		68		4,485		4,101		3,943
Income before taxes on income	$	2,031	$	1,681	$	1,660	$	962	$	598	$	472	$	-	$	-	$	(17)	$	2,993	$	2,279	$	2,115
Capital expenditures	$	234	$	195	$	271	$	119	$	90	$	134	$	-	$	-	$	-	$	353	$	285	$	405
Depreciation and amortization	$	180	$	171	$	154	$	54	$	53	$	45	$	-	$	-	$	-	$	234	$	224	$	199

(1)	The Corporate Brokerage Retirement Services business was transferred from the Investor Services segment to the Advisor Services segment in the fourth quarter of 2015. Prior period information has been recast to reflect these changes.
(2)	Unallocated amount includes a net insurance settlement of $45 million in 2014.
(3)	Unallocated amount includes a charge of $68 million for estimated future severance benefits resulting from changes in the Company’s geographic footprint in 2014.