Schwab Reports Monthly Activity Highlights

Rhea-AI Summary

The Charles Schwab released its Monthly Activity Report for April 2024, highlighting several key metrics.

Total net new assets brought by new and existing clients amounted to $10.0 billion, with core net new assets at $1.0 billion, reflecting client cash disbursements during tax season. Total client assets were reported at $8.85 trillion, representing a 16% increase from April 2023 but a 3% decrease compared to March 2024. Transactional sweep cash fell by 3% to $387.7 billion due to anticipated factors like tax disbursements and seasonal advisory fee payments.

The company also completed the final Ameritrade client conversion, marking the successful end of a historic integration, with further details to be shared during the Institutional Investor Day on May 22.

Positive

• Total client assets increased by 16% compared to April 2023, reaching $8.85 trillion.
• Successful completion of the final Ameritrade client conversion, marking the end of a significant integration.
• Total net new assets amounted to $10.0 billion for April 2024, indicating strong client acquisition.

Negative

• Total client assets decreased by 3% compared to March 2024.
• Transactional sweep cash declined by 3% to $387.7 billion, influenced by tax disbursements and seasonal advisory fee payments.

Insights

Financial Analyst

Charles Schwab's latest activity report offers several key insights for investors. Firstly, total net new assets of $10.0 billion in April are significant, considering the seasonal outflow due to tax disbursements. The core net new assets of $1.0 billion suggest that, even after adjusting for seasonal factors, Schwab continues to grow its asset base, albeit at a moderated pace. This could be an indicator of strong client retention and acquisition strategies.

On the downside, total client assets declined by 3% month-over-month to $8.85 trillion, which can be partly attributed to tax season. However, the year-over-year increase of 16% is quite impressive and demonstrates long-term growth. The decline in transactional sweep cash by 3% to $387.7 billion is another seasonal effect, but it’s essential for investors to monitor if this trend reverses in the coming months.

Short-term, these numbers reflect typical seasonal variances, while long-term, they showcase Schwab's resilience and growth potential. The successful completion of the Ameritrade client conversion is a significant milestone and removes integration risks, which could have been a concern for investors. The upcoming investor day may provide more details on how Schwab plans to leverage this integration for future growth.

Market Research Analyst

From a market research perspective, Schwab's ability to attract $10.0 billion in new assets during a tax-heavy month is commendable. It speaks to the firm's strong brand and client trust. The Ameritrade client conversion is particularly noteworthy. Successfully transitioning such a sizable client base without major hiccups is a testament to Schwab's operational capabilities and could enhance client satisfaction and loyalty.

The fluctuation in transactional sweep cash and total assets is expected around tax season, but investors should be keen on the strategic moves Schwab will discuss during their Institutional Investor Day. Key areas of interest would include the firm's plans for integrating Ameritrade clients into their broader ecosystem and any new services or products aimed at retaining and growing their client base further.

Understanding these points can help investors gauge Schwab's near-term and long-term growth potential in a competitive market.

WESTLAKE, Texas--(BUSINESS WIRE)-- The Charles Schwab Corporation released its Monthly Activity Report today. Company highlights for the month of April 2024 include:

• Total net new assets brought to the company by new and existing clients in April 2024 totaled $10.0 billion, while core net new assets equaled $1.0 billion. These flows reflect client cash disbursements during tax season.
• Total client assets were $8.85 trillion as of month-end April, up 16% from April 2023 and down 3% versus March 2024.
• Transactional sweep cash declined by 3% to end April 2024 at $387.7 billion. This month-over-month drawdown was driven by several anticipated factors, including client tax disbursements and seasonal advisory fee payments.
• Last weekend, Schwab successfully completed the final Ameritrade client conversion, marking the completion of a historic integration. We are pleased to report that the client account and asset conversion went smoothly. The company will share additional perspectives on this tremendous milestone during its Institutional Investor Day scheduled for Wednesday, May 22.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with 35.4 million active brokerage accounts, 5.3 million workplace plan participant accounts, 1.9 million banking accounts, and $8.85 trillion in client assets as of April 30, 2024. 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 Ameritrade Holding LLC. Ameritrade Holding LLC is a wholly owned subsidiary of The Charles Schwab Corporation.

The Charles Schwab Corporation Monthly Activity Report For April 2024
			2023																											2024												Change
			Apr			May			Jun			Jul			Aug			Sep			Oct			Nov			Dec			Jan			Feb			Mar			Apr			Mo.		Yr.
Market Indices (at month end)
Dow Jones Industrial Average®			34,098			32,908			34,408			35,560			34,722			33,508			33,053			35,951			37,690			38,150			38,996			39,807			37,816			(5	%)	11	%
Nasdaq Composite®			12,227			12,935			13,788			14,346			14,035			13,219			12,851			14,226			15,011			15,164			16,092			16,379			15,658			(4	%)	28	%
Standard & Poor’s® 500			4,169			4,180			4,450			4,589			4,508			4,288			4,194			4,568			4,770			4,846			5,096			5,254			5,036			(4	%)	21	%
Client Assets (in billions of dollars)
Beginning Client Assets			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			8,516.6			8,558.1			8,879.5			9,118.4
Net New Assets (1)			13.6			24.6			33.8			12.9			8.1			27.2			5.0			19.2			42.1			14.8			31.7			41.7			10.0			(76	%)	(26	%)
Net Market Gains (Losses)			37.9			(5.9	)		331.8			212.3			(154.4	)		(297.4	)		(176.1	)		508.0			293.9			26.7			289.7			197.2			(280.9	)
Total Client Assets (at month end)			7,631.5			7,650.2			8,015.8			8,241.0			8,094.7			7,824.5			7,653.4			8,180.6			8,516.6			8,558.1			8,879.5			9,118.4			8,847.5			(3	%)	16	%
Core Net New Assets (1,2)			(2.3	)		20.7			33.8			13.7			4.9			27.1			11.3			21.7			43.1			17.2			33.4			45.0			1.0			(98	%)	143	%
Receiving Ongoing Advisory Services (at month end)
Investor Services			530.7			526.3			547.5			560.6			552.2			533.0			522.2			557.0			581.4			584.1			601.8			618.5			602.2			(3	%)	13	%
Advisor Services (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			3,757.4			3,780.4			3,902.5			4,009.5			3,893.9			(3	%)	15	%
Client Accounts (at month end, in thousands)
Active Brokerage Accounts			34,248			34,311			34,382			34,434			34,440			34,540			34,571			34,672			34,838			35,017			35,127			35,301			35,426			-		3	%
Banking Accounts			1,757			1,768			1,781			1,792			1,798			1,799			1,812			1,825			1,838			1,856			1,871			1,885			1,901			1	%	8	%
Workplace Plan Participant Accounts (4)			4,869			4,962			5,003			5,030			5,037			5,141			5,212			5,212			5,221			5,226			5,268			5,277			5,282			-		8	%
Client Activity
New Brokerage Accounts (in thousands)			331			314			315			303			311			280			284			286			340			366			345			383			361			(6	%)	9	%
Client Cash as a Percentage of Client Assets (5,6)			10.8	%		10.9	%		10.5	%		10.2	%		10.4	%		10.8	%		11.2	%		10.7	%		10.5	%		10.5	%		10.2	%		10.0	%		10.2	%		20 bp		(60) bp
Derivative Trades as a Percentage of Total Trades			23.4	%		23.5	%		23.9	%		23.0	%		24.4	%		24.2	%		23.2	%		23.1	%		21.8	%		21.8	%		22.2	%		21.9	%		22.1	%		20 bp		(130) bp
Selected Average Balances (in millions of dollars)
Average Interest-Earning Assets (7)			493,215			483,438			479,752			466,659			449,483			444,864			438,522			439,118			446,305			443,694			434,822			431,456			423,532			(2	%)	(14	%)
Average Margin Balances			60,338			60,250			61,543			63,040			64,226			64,014			63,946			61,502			62,309			61,368			63,600			66,425			68,827			4	%	14	%
Average Bank Deposit Account Balances (8)			104,775			103,149			102,917			102,566			101,928			100,404			97,893			94,991			95,518			95,553			92,075			90,774			88,819			(2	%)	(15	%)
Mutual Fund and Exchange-Traded Fund
Net Buys (Sells) (9,10) (in millions of dollars)
Equities			1,126			(1,366	)		9,190			7,423			(278	)		675			(3,039	)		6,099			7,903			8,182			7,624			10,379			3,472
Hybrid			(462	)		(889	)		(903	)		(407	)		(1,037	)		(828	)		(1,457	)		(1,466	)		(1,596	)		(501	)		(1,330	)		(439	)		(703	)
Bonds			2,575			2,029			3,302			2,515			4,696			2,723			1,094			255			6,104			7,510			9,883			7,561			5,949
Net Buy (Sell) Activity (in millions of dollars)
Mutual Funds (9)			(4,904	)		(7,157	)		(4,485	)		(3,333	)		(6,476	)		(5,853	)		(12,245	)		(9,267	)		(7,406	)		(966	)		(1,348	)		(1,607	)		(4,818	)
Exchange-Traded Funds (10)			8,143			6,931			16,074			12,864			9,857			8,423			8,843			14,155			19,817			16,157			17,525			19,108			13,536
Money Market Funds			6,291			15,256			9,112			7,911			16,869			13,388			16,976			11,670			7,745			11,717			10,129			9,085			(2,357	)

	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. Additionally, 2024 includes an inflow of $10.3 billion from a mutual fund clearing services client in April, and 2023 includes outflows from a large international relationship of $0.8 billion in September, $6.2 billion in October, $5.4 billion in November, and $0.6 billion in December, and an inflow of $12.0 billion from a mutual fund clearing services client in April.
(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)	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.
(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)	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.
(7)	Represents average total interest-earning assets on the Company's balance sheet.
(8)	Represents average clients’ uninvested cash sweep account balances held in deposit accounts at third-party financial institutions.
(9)	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.
(10)	Represents the principal value of client ETF transactions handled by Schwab, including transactions in proprietary ETFs.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240514723050/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 was the total net new assets reported by Schwab in April 2024?

Schwab reported total net new assets of $10.0 billion in April 2024.

How did Schwab's total client assets for April 2024 compare to the previous year?

Total client assets for April 2024 were up 16% compared to April 2023.

What was the core net new assets figure for Schwab in April 2024?

The core net new assets for Schwab in April 2024 amounted to $1.0 billion.

How did Schwab's total client assets change from March 2024 to April 2024?

Total client assets decreased by 3% from March 2024 to April 2024.

What factors contributed to the decline in Schwab's transactional sweep cash in April 2024?

The decline in transactional sweep cash was driven by client tax disbursements and seasonal advisory fee payments.

What milestone did Schwab achieve with Ameritrade in April 2024?

Schwab successfully completed the final Ameritrade client conversion in April 2024.