Schwab Reports Monthly Activity Highlights

Rhea-AI Summary

The Charles Schwab Corporation (SCHW) reported a strong month in November 2023, with core net new assets totaling $21.7 billion. Total client assets reached $8.18 trillion, marking a 12% increase from November 2022 and a 7% increase from October 2023. Transactional sweep cash saw a significant increase of $5.0 billion, the largest monthly build since March 2022. However, the company anticipates a 9.5% to 10.0% decline in full-year 2023 revenue due to lower transactional cash levels, subdued securities lending activity, and softer client trading volumes.

Positive

• Core net new assets brought to the company by new and existing clients totaled $21.7 billion.
• Total client assets were $8.18 trillion, up 12% from November 2022 and up 7% compared to October 2023.
• Transactional sweep cash increased by $5.0 billion in November 2023, the largest monthly build since March 2022.
• Clients added over $7 billion across balance sheet cash solutions during the month.

Negative

• Anticipated 9.5% to 10.0% decline in full-year 2023 revenue due to lower transactional cash levels, subdued securities lending activity, and softer client trading volumes.

WESTLAKE, Texas--(BUSINESS WIRE)-- The Charles Schwab Corporation released its Monthly Activity Report today. Company highlights for the month of November 2023 include:

• Core net new assets brought to the company by new and existing clients totaled $21.7 billion.
• Total client assets were $8.18 trillion as of month-end November, up 12% from November 2022 and up 7% compared to October 2023.
• Transactional sweep cash ended November 2023 at $402.9 billion, representing an increase of $5.0 billion versus the prior month – the largest monthly build in transactional sweep cash since March 2022. Excluding bank deposit account balance activity, clients added over $7 billion across our balance sheet cash solutions during the month.
• While the company’s ‘through the cycle’ financial model continues to deliver against an evolving backdrop, lower transactional cash levels, along with softer client trading volumes and subdued securities lending activity, is expected to result in full-year 2023 revenue declining by 9.5% to 10.0% versus the previous year.

Forward-Looking Statements

This press release contains a forward-looking statement relating to full-year revenue. This forward-looking statement reflects management’s expectations as of the date hereof. Achievement of these expectations is subject to risks and uncertainties that could cause actual results to differ materially from the expressed expectations.

Important factors that may cause such differences include, but are not limited to, client use of the company’s advisory solutions and other products and services; general market conditions, including the level of interest rates and equity valuations; client cash allocation decisions; client sensitivity to rates; level of client assets, including cash balances; competitive pressures on pricing; balance sheet positioning relative to changes in interest rates; interest earning asset mix and growth; the level and mix of client trading activity; market volatility; securities lending; and margin loan balances. Other important factors include the company’s ability to support client activity levels; monetize client assets; and other factors set forth in the company’s most recent reports on Form 10-K and Form 10-Q.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with 34.7 million active brokerage accounts, 5.2 million workplace plan participant accounts, 1.8 million banking accounts, and $8.18 trillion in client assets as of November 30, 2023. 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 November 2023
			2022						2023																																	Change
			Nov			Dec			Jan			Feb			Mar			Apr			May			Jun			Jul			Aug			Sep			Oct			Nov			Mo.		Yr.
Market Indices (at month end)
Dow Jones Industrial Average®			34,590			33,147			34,086			32,657			33,274			34,098			32,908			34,408			35,560			34,722			33,508			33,053			35,951			9	%	4	%
Nasdaq Composite®			11,468			10,466			11,585			11,456			12,222			12,227			12,935			13,788			14,346			14,035			13,219			12,851			14,226			11	%	24	%
Standard & Poor’s® 500			4,080			3,840			4,077			3,970			4,109			4,169			4,180			4,450			4,589			4,508			4,288			4,194			4,568			9	%	12	%
Client Assets (in billions of dollars)
Beginning Client Assets			7,004.6			7,320.6			7,049.8			7,480.6			7,380.2			7,580.0			7,631.5			7,650.2			8,015.8			8,241.0			8,094.7			7,824.5			7,653.4
Net New Assets (1)			33.1			53.3			36.1			41.7			72.9			13.6			24.6			33.8			12.9			8.1			27.2			5.0			19.2			N/M		(42	%)
Net Market Gains (Losses)			282.9			(324.1	)		394.7			(142.1	)		126.9			37.9			(5.9	)		331.8			212.3			(154.4	)		(297.4	)		(176.1	)		508.0
Total Client Assets (at month end)			7,320.6			7,049.8			7,480.6			7,380.2			7,580.0			7,631.5			7,650.2			8,015.8			8,241.0			8,094.7			7,824.5			7,653.4			8,180.6			7	%	12	%
Core Net New Assets (2)			33.1			53.3			36.1			41.7			53.9			(2.3	)		20.7			33.8			13.7			4.9			27.1			11.3			21.7			92	%	(34	%)
Receiving Ongoing Advisory Services (at month end)
Investor Services			514.0			499.8			524.6			515.5			526.2			530.7			526.3			547.5			560.6			552.2			533.0			522.2			557.0			7	%	8	%
Advisor Services (3)			3,270.5			3,173.4			3,345.4			3,289.6			3,369.3			3,394.9			3,377.8			3,527.8			3,619.8			3,554.2			3,448.0			3,380.3			3,604.4			7	%	10	%
Client Accounts (at month end, in thousands)
Active Brokerage Accounts (4)			33,636			33,758			33,878			34,010			34,120			34,248			34,311			34,382			34,434			34,440			34,540			34,571			34,672			-		3	%
Banking Accounts			1,705			1,716			1,729			1,733			1,746			1,757			1,768			1,781			1,792			1,798			1,799			1,812			1,825			1	%	7	%
Workplace Plan Participant Accounts (5)			4,810			4,807			4,817			4,839			4,845			4,869			4,962			5,003			5,030			5,037			5,141			5,212			5,212			-		8	%
Client Activity
New Brokerage Accounts (in thousands)			303			330			344			320			378			331			314			315			303			311			280			284			286			1	%	(6	%)
Client Cash as a Percentage of Client Assets (6,7)			11.5	%		12.2	%		11.5	%		11.6	%		11.2	%		10.8	%		10.9	%		10.5	%		10.2	%		10.4	%		10.8	%		11.2	%		10.7	%		(50) bp		(80) bp
Derivative Trades as a Percentage of Total Trades			24.6	%		23.2	%		23.0	%		23.5	%		22.8	%		23.4	%		23.5	%		23.9	%		23.0	%		24.4	%		24.2	%		23.2	%		23.1	%		(10) bp		(150) bp
Selected Average Balances (in millions of dollars)
Average Interest-Earning Assets (8)			527,019			520,100			512,893			503,122			497,627			493,215			483,438			479,752			466,659			449,483			444,864			438,522			439,118			-		(17	%)
Average Margin Balances			66,011			64,759			60,211			60,575			60,848			60,338			60,250			61,543			63,040			64,226			64,014			63,946			61,502			(4	%)	(7	%)
Average Bank Deposit Account Balances (9)			130,479			126,953			122,387			115,816			109,392			104,775			103,149			102,917			102,566			101,928			100,404			97,893			94,991			(3	%)	(27	%)
Mutual Fund and Exchange-Traded Fund
Net Buys (Sells) (10,11) (in millions of dollars)
Equities			3,777			(1,837	)		7,236			5,850			(3,234	)		1,126			(1,366	)		9,190			7,423			(278	)		675			(3,039	)		6,099
Hybrid			(2,052	)		(1,595	)		(433	)		47			(1,641	)		(462	)		(889	)		(903	)		(407	)		(1,037	)		(828	)		(1,457	)		(1,466	)
Bonds			(3,721	)		(3,260	)		5,646			4,281			6,158			2,575			2,029			3,302			2,515			4,696			2,723			1,094			255
Net Buy (Sell) Activity (in millions of dollars)
Mutual Funds (10)			(17,143	)		(21,851	)		552			(2,338	)		(7,423	)		(4,904	)		(7,157	)		(4,485	)		(3,333	)		(6,476	)		(5,853	)		(12,245	)		(9,267	)
Exchange-Traded Funds (11)			15,147			15,159			11,897			12,516			8,706			8,143			6,931			16,074			12,864			9,857			8,423			8,843			14,155
Money Market Funds			16,929			27,778			24,285			23,347			27,106			6,291			15,256			9,112			7,911			16,869			13,388			16,976			11,670

	Note: Certain supplemental details related to the information above can be found at: https://www.aboutschwab.com/financial-reports.
(1)	Unless otherwise noted, differences between net new assets and core net new assets are net flows from off-platform Schwab Bank Retail CDs - including March 2023 which reflects inflows of $19.0 billion from off-platform Schwab Bank Retail CDs issued year-to-date through March 31, 2023. November 2023 also includes an outflow of $5.4 billion from an international relationship. October 2023 also includes an outflow of $6.2 billion from an international relationship. September 2023 also includes an outflow of $0.8 billion from an international relationship. April 2023 also includes an inflow of $12.0 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, and activity from off-platform Schwab Bank Retail CDs. These flows may span multiple reporting periods.
(3)	Excludes Retirement Business Services.
(4)	November 2022 includes the Company-initiated closure of approximately 350 thousand low-balance accounts.
(5)	Beginning October 2023, Retirement Plan Participants was expanded to include accounts in Stock Plan Services, Designated Brokerage Services, and Retirement Business Services. Participants may be enrolled in services in more than one Workplace business. Prior periods have been recast to reflect this change.
(6)	Schwab One®, certain cash equivalents, bank deposits, third-party bank deposit accounts, and money market fund balances as a percentage of total client assets.
(7)	Beginning July 2023, client cash as a percentage of client assets excludes brokered CDs issued by Charles Schwab Bank. Prior periods have been recast to reflect this change.
(8)	Represents average total interest-earning assets on the Company's balance sheet. November 2022 includes the impact of transferring certain investment securities from the available for sale category to the held-to-maturity category.
(9)	Represents average clients’ uninvested cash sweep account balances held in deposit accounts at third-party financial institutions.
(10)	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.
(11)	Represents the principal value of client ETF transactions handled by Schwab, including transactions in proprietary ETFs.
	N/M - Not meaningful. Percentage changes greater than 200% are presented as not meaningful.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20231214573591/en/

MEDIA:

Mayura Hooper

Charles Schwab

Phone: 415-667-1525

INVESTORS/ANALYSTS:

Jeff Edwards

Charles Schwab

Phone: 415-667-1524

Source: The Charles Schwab Corporation

FAQ

What were the core net new assets brought to The Charles Schwab Corporation in November 2023?

The core net new assets totaled $21.7 billion.

What were the total client assets as of November 2023?

Total client assets were $8.18 trillion, marking a 12% increase from November 2022 and a 7% increase from October 2023.

What was the increase in transactional sweep cash in November 2023?

Transactional sweep cash saw a significant increase of $5.0 billion, the largest monthly build since March 2022.

What is the anticipated revenue trend for full-year 2023?

The company anticipates a 9.5% to 10.0% decline in full-year 2023 revenue due to lower transactional cash levels, subdued securities lending activity, and softer client trading volumes.