In the firm’s first quarter of 2024, Charles Schwab saw $14 billion in net flows into its advisory solutions businesses, including managed portfolios and customized investment advice. This was a 60% boost year over year, according to company earnings.
Schwab reported $4.74 billion in net revenue for 2024’s first three months, a 7.3% dip from 2023’s first quarter. However, the firm cleared analyst estimates.
In particular, Schwab Wealth Advisory (formerly Schwab Private Bank and the moniker for the firm’s in-house advisor cadre) had a record $4.4 billion in net flows this quarter, with Charles Schwab Corp. President Rick Wurster attributing it partly to “legacy Ameritrade households,” which made up about 30% of enrollments.
The $14 billion of net flows into the firm’s “advisory solutions” included Schwab Wealth Advisory, Schwab Managed Portfolios and Schwab Advisor Network, among other tracts, and some legacy non-fee advice solutions, according to a Schwab spokesperson.
Schwab acquired TD Ameritrade in 2019, with the deal finally closing in October of the following year. Though the Schwab/TD integration was initially expected to be completed by 2023, 10% of TD clients and their accounts will be converted to Schwab in May, Schwab CEO Walt Bettinger said on the company’s earnings call.
According to Wurster, most TD Ameritrade clients enrolling in some wealth solution at Schwab opted for full-service segments, like the in-house Schwab Wealth Advisory group or Schwab Advisor Network, which works with RIAs. Some also sought personalized indexing and Wasmer Schroeder, which offers clients fixed-income strategies.
“So those would be the four, but the majority of flows are going to full-service wealth,” Wurster said. “And that’s exactly the power of the combination that we thought we’d see, and we’re seeing it.”
In all, net new assets at the firm totaled $88.2 billion in the first quarter, a stark drop from 2023’s first quarter, though up from last quarter’s $66.3 billion in new assets. According to Bettinger, some of this dropoff stemmed from the ongoing TD integration, though he expected client attrition to moderate as time went on.
Active brokerage accounts increased 3% year-over-year, according to the first quarter’s earnings report, and a 20% jump in new brokerage accounts from the fourth quarter of 2023 (and 5% year over year, according to the earnings).
Information from Bloomberg News contributed to this report.