Skip navigation
Charles Schwab

Schwab Adds $108.8B in Net Assets During Q2

Net new assets at Charles Schwab have been driven by an 'omni-channel approach' that involves its TD Ameritrade and USAA acquisitions, as well as extensive branch reopenings.

Charles Schwab hit an implied year-to-date organic growth rate of 8% in “core net new assets” as individual advisors and individual clients brought net new assets of $257 billion to the firm in the first half of the year, of which $108.8 billion could be attributed to the second quarter.

The firm also included a nondeductible charge of $200 million for a probe by the SEC into its robo advisor platform, according to its second quarter earnings report.

The firm’s second quarter asset growth can be attributed to a successful reopening of “nearly all of [Schwab’s] 406 branches, including 80 independent branches during the second quarter,” as well as a “newly combined Schwab Advisor Network” targeting high and ultra-high-net-worth individuals, according to CEO Walt Bettinger. Schwab started inviting RIAs to participate in the combined referral program in April. That same month it announced it was reopening its branches in earnest.

Bettinger reaffirmed Schwab’s integration plans for its acquisition of TD Ameritrade, which he expects to conclude no later than October 2023. He also cited USAA referrals as a “steady source of new accounts.” Schwab bought the USAA brokerage and managed portfolios businesses in 2019 for $1.8 billion, transitioning them last year in the midst of the pandemic.

"Entering the second half of 2021, our focus remains firmly on clients," Bettinger said in a statement. "As we help them work towards their financial goals, strive to meet their service expectations, and drive forward on all of our integration efforts, we are simultaneously building the future of modern wealth management."

A spokesperson confirmed that Schwab is still planning to launch its long-awaited digital onboarding by the end of the month, as the firm navigates the addition of technological capabilities in the midst of combining TD Ameritrade’s capabilities into its own. The firm is planning to provide a more-detailed update of its business plans next week.

Overall, Schwab reported total client assets hit a record of $7.57 trillion at the end of June, up 7% from the end of the first quarter and 84% year over year. The firm posted net income of $1.3 billion for the second quarter, compared with $1.5 billion for the first quarter, and $671 million for the second quarter of 2020. Total net revenue at the end of Q2 was $4.5 billion, down 4% from Q1, but up 85% over the second quarter of 2020, partially due to a 21% drop in trading revenue as client activity dipped from a surge in the first quarter of the year, according to Schwab CFO Peter Crawford.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.