Schwab Reports Monthly Activity Highlights

Rhea-AI Summary

The Charles Schwab Corporation published its Monthly Activity Report for October 2020, marking the first report post-acquisition of TD Ameritrade. Key points include: Core net new assets reached $25.6 billion, bringing total client assets to $5.88 trillion, a 53% increase from October 2019. Average interest-earning assets rose to $442.1 billion, a 66% year-over-year growth. Notably, before the acquisition closing on October 6, TD Ameritrade reported 3,932 thousand daily average trades and 32 thousand new brokerage accounts.

Positive

• Core net new assets of $25.6 billion for October.
• Total client assets increased to $5.88 trillion, up 53% from October 2019.
• Average interest-earning assets rose to $442.1 billion, up 66% year-over-year.

Negative

• TD Ameritrade's operating metrics are not included in the main report.

SAN FRANCISCO--(BUSINESS WIRE)--The Charles Schwab Corporation released its Monthly Activity Report today, reflecting for the first time its recent acquisition of TD Ameritrade. Company highlights for the month of October 2020 include:

• Core net new assets brought to the company by new and existing clients totaled $25.6 billion. Core net new assets excluding mutual fund clearing totaled $25.7 billion.
• Total client assets were $5.88 trillion as of month-end October, up 53% from October 2019 and up 34% compared to September 2020.
• Average interest-earning assets on the company’s balance sheet were $442.1 billion in October, up 66% from October 2019 and up 13% compared to September 2020.

Prior to the closing of the acquisition on October 6, 2020, TD Ameritrade recorded the following client operating metrics for the period of October 1 through October 5:

• Daily Average Trades (DATs): 3,932 thousand
• Net New Assets: $1.0 billion
• New brokerage accounts: 32 thousand

Please note that while these standalone TD Ameritrade metrics are not included within the October Monthly Activity Report table, all metrics have been calculated using Schwab’s methodologies.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with 29.0 million active brokerage accounts, 2.1 million corporate retirement plan participants, 1.5 million banking accounts, and $5.9 trillion in client assets as of October 31, 2020. Through its operating subsidiaries, the company provides a full range of wealth management, securities brokerage, banking, asset management, custody, and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiaries, Charles Schwab & Co., Inc., TD Ameritrade, Inc., and TD Ameritrade Clearing, Inc., (members SIPC, https://www.sipc.org), and their affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent, fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its primary banking subsidiary, Charles Schwab Bank, SSB (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at https://www.aboutschwab.com.

TD Ameritrade, Inc. and TD Ameritrade Clearing, Inc. are separate but affiliated companies and subsidiaries of TD Ameritrade Holding Corporation. TD Ameritrade Holding Corporation is a wholly owned subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank.

The Charles Schwab Corporation Monthly Activity Report For October 2020
				2019									2020																														Change
				Oct			Nov			Dec			Jan			Feb			Mar			Apr			May			Jun			Jul			Aug			Sep			Oct			Mo.		Yr.
Market Indices (at month end)
Dow Jones Industrial Average				27,046			28,051			28,538			28,256			25,409			21,917			24,346			25,383			25,813			26,428			28,430			27,782			26,502			(5%)		(2%)
Nasdaq Composite				8,292			8,665			8,973			9,151			8,567			7,700			8,890			9,490			10,059			10,745			11,775			11,168			10,912			(2%)		32%
Standard & Poor’s 500				3,038			3,141			3,231			3,226			2,954			2,585			2,912			3,044			3,100			3,271			3,500			3,363			3,270			(3%)		8%
Client Assets (in billions of dollars)
Beginning Client Assets				3,768.4			3,854.6			3,942.2			4,038.8			4,051.6			3,862.8			3,496.9			3,778.3			4,009.0			4,110.1			4,278.0			4,489.7			4,395.3
Net New Assets (1)				35.2			12.0			30.1			20.9			24.4			27.9			15.3			97.5			24.6			11.2			20.0			20.0			1,596.9			N/M		N/M
Net Market Gains (Losses)				51.0			75.6			66.5			(8.1	)		(213.2	)		(393.8	)		266.1			133.2			76.5			156.7			191.7			(114.4	)		(113.7	)
Total Client Assets (at month end)				3,854.6			3,942.2			4,038.8			4,051.6			3,862.8			3,496.9			3,778.3			4,009.0			4,110.1			4,278.0			4,489.7			4,395.3			5,878.5			34%		53%
Core Net New Assets (2)				24.1			12.0			30.1			20.9			24.4			27.9			15.3			17.6			13.7			2.7			20.0			20.0			25.6			28%		6%
Receiving Ongoing Advisory Services (at month end)
Investor Services				324.6			330.8			337.1			336.8			323.2			291.5			309.9			339.8			345.2			355.6			366.8			361.2			378.8			5%		17%
Advisor Services (3)				1,691.6			1,728.2			1,769.7			1,773.2			1,694.0			1,531.3			1,647.9			1,711.7			1,747.5			1,818.5			1,900.5			1,870.1			2,552.0			36%		51%
Client Accounts (at month end, in thousands)
Active Brokerage Accounts				12,189			12,247			12,333			12,431			12,521			12,736			12,866			14,007			14,107			14,220			14,311			14,393			29,013			102%		138%
Banking Accounts				1,374			1,384			1,390			1,403			1,411			1,426			1,439			1,448			1,463			1,480			1,493			1,486			1,496			1%		9%
Corporate Retirement Plan Participants				1,735			1,743			1,748			1,732			1,726			1,721			1,696			1,714			1,716			1,712			1,715			1,722			2,072			20%		19%
Client Activity
New Brokerage Accounts (in thousands) (4)				142			127			164			167			159			283			201			1,250			201			206			202			184			14,718			N/M		N/M
Client Cash as a Percentage of Client Assets (5)				11.3	%		11.3	%		11.3	%		11.3	%		12.0	%		15.1	%		14.3	%		14.0	%		13.6	%		13.0	%		12.5	%		12.8	%		13.4	%		60 bp		210 bp
Derivative Trades as a Percentage of Total Trades				12.0	%		11.7	%		10.7	%		12.0	%		11.5	%		7.0	%		10.2	%		12.2	%		10.6	%		13.1	%		13.8	%		14.5	%		20.5	%		600 bp		850 bp
Mutual Fund and Exchange-Traded Fund
Net Buys (Sells) (6,7) (in millions of dollars)
Large Capitalization Stock				900			1,406			991			845			(178	)		984			(693	)		(768	)		(1,254	)		(2,536	)		(1,422	)		(1,360	)		(935	)
Small / Mid Capitalization Stock				(458	)		73			201			(314	)		(531	)		(954	)		151			(401	)		(1,063	)		(1,476	)		(441	)		(497	)		(753	)
International				340			735			993			1,360			132			(2,116	)		(2,207	)		(1,953	)		(1,580	)		(773	)		230			370			168
Specialized				618			484			455			762			397			333			2,059			1,512			1,020			1,505			906			115			215
Hybrid				(202	)		(290	)		(96	)		615			(257	)		(4,790	)		(860	)		(518	)		(97	)		(769	)		(124	)		(12	)		(553	)
Taxable Bond				2,813			2,274			4,710			5,714			3,830			(23,142	)		1,642			5,469			9,215			7,314			7,680			5,734			5,904
Tax-Free Bond				809			860			1,255			1,481			1,066			(5,229	)		(242	)		805			1,710			1,297			1,648			1,123			861
Net Buy (Sell) Activity (in millions of dollars)
Mutual Funds (6)				(473	)		(761	)		1,097			2,684			(565	)		(34,382	)		(3,863	)		(564	)		1,768			(147	)		2,568			757			(2,260	)
Exchange-Traded Funds (7)				5,293			6,303			7,412			7,779			5,024			(532	)		3,713			4,710			6,183			4,709			5,909			4,716			7,167
Money Market Funds				7,059			4,768			1,515			1,911			1,312			(1,233	)		8,465			4,833			(5,673	)		(9,039	)		(5,614	)		(6,627	)		(4,021	)
Selected Average Assets (in millions of dollars)
Average Interest-Earning Assets (8,9)				266,089			268,254			274,911			279,437			278,966			317,850			353,018			361,814			373,986			379,521			384,690			392,784			442,119			13%		66%
Average Bank Deposit Account Assets (9,10)				-			-			-			-			-			-			-			-			-			-			-			-			132,030			N/M		N/M

(1)		October 2020 includes an inflow of $1.6 trillion related to the acquisition of TD Ameritrade. July 2020 includes an inflow of $8.5 billion related to the acquisition of Wasmer, Schroeder & Company, LLC. June 2020 includes an inflow of $10.9 billion from a mutual fund clearing services client. May 2020 includes an inflow of $79.9 billion related to the acquisition of the assets of USAA’s Investment Management Company. October 2019 includes an inflow of $11.1 billion from a mutual fund clearing services client.
(2)		Net new assets before significant one-time inflows or outflows, such as acquisitions/divestitures or extraordinary flows (generally greater than $10 billion) relating to a specific client. These flows may span multiple reporting periods.
(3)		Excludes Retirement Business Services.
(4)		October 2020 includes 14.5 million new brokerage accounts related to the acquisition of TD Ameritrade. May 2020 includes 1.1 million new brokerage accounts related to the acquisition of the assets of USAA’s Investment Management Company.
(5)		Schwab One®, certain cash equivalents, bank deposits, third-party bank deposit accounts, and money market fund balances as a percentage of total client assets.
(6)		Represents the principal value of client mutual fund transactions handled by Schwab, including transactions in proprietary funds. Includes institutional funds available only to Investment Managers. Excludes money market fund transactions.
(7)		Represents the principal value of client ETF transactions handled by Schwab, including transactions in proprietary ETFs.
(8)		Represents average total interest-earning assets on the company's balance sheet.
(9)		October 2020 averages reflect a full month of Schwab balances and 26 days of TD Ameritrade balances following the acquisition closing on October 6, 2020. Calculating the consolidated daily average from the closing date onwards would result in Average Interest Earning Assets and Average Bank Deposit Account Assets of $450,004 million and $157,414 million, respectively.
(10)		Represents average TD Ameritrade clients’ uninvested cash sweep account balances held in deposit accounts at third-party financial institutions.
		N/M - Not meaningful