Schwab Reports Monthly Activity Highlights

Rhea-AI Summary

The Charles Schwab Corporation reported strong performance in its January 2023 Monthly Activity Report. The firm attracted $36.1 billion in core net new assets, showing an annualized growth rate of 6%. Total client assets reached $7.48 trillion, a 4% decrease year-over-year but a 6% increase from December 2022. Cash as a percentage of assets was 11.6%, slightly up from 11.3% in January 2022. CFO Peter Crawford highlighted improved investor sentiment and increased allocations to equity and fixed-income securities, which positions Schwab for earnings growth in 2023.

Positive

• Core net new assets totaled $36.1 billion in January 2023.
• Annualized growth rate of net new assets was 6%.
• Total client assets reached $7.48 trillion, up 6% from December 2022.

Negative

• Total client assets decreased by 4% compared to January 2022.
• Client cash percentage slightly higher than the previous month, indicating cautious investor behavior.

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

• Core net new assets brought to the company by new and existing clients totaled $36.1 billion. Net new assets excluding mutual fund clearing totaled $34.8 billion.
• Total client assets were $7.48 trillion as of month-end January, down 4% from January 2022 and up 6% compared to December 2022.
• Client cash as a percentage of assets was 11.6% as of month-end January, compared with 11.3% in January 2022 and 12.3% in December 2022.

Commentary from the CFO

CFO Peter Crawford commented, “Our strong business momentum carried over into the new year as we gathered a record $36.1 billion in core net new assets during January, an annualized growth rate of 6%. Investor engagement and sentiment improved from year-end levels as equity markets rebounded – with the S&P 500^® index notching its best start in four years. Given the strong performance of the markets during the month, in conjunction with normal seasonal patterns, clients increased allocations to equity and fixed income securities to start the year. Over the remainder of 2023, Schwab’s diversified financial model keeps us well-positioned to convert our continued success with clients into earnings growth and meaningful capital return.”

Forward-Looking Statements

This press release contains forward-looking statements relating to Schwab’s business momentum and client success; positioning; earnings growth; and returning capital to stockholders. These forward-looking statements reflect management’s expectations as of the date hereof. Achievement of these expectations and objectives 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, the company’s ability to attract and retain clients and independent investment advisors and grow those relationships and client assets; develop and launch new and enhanced products, services, and capabilities, as well as enhance its infrastructure and capacity, in a timely and successful manner; hire and retain talent; support client activity levels; successfully implement integration strategies and plans; monetize client assets; and manage expenses. Other important factors include client use of the company’s advisory solutions and other products and services; general market conditions, including equity valuations and the level of interest rates; the level and mix of client trading activity; market volatility; margin loan balances; securities lending; competitive pressures on pricing; client cash sorting; client sensitivity to rates; level of client assets, including cash balances; capital and liquidity needs and management; balance sheet positioning relative to changes in interest rates; interest earning asset mix and growth; the migration of bank deposit account balances; 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 33.9 million active brokerage accounts, 2.4 million corporate retirement plan participants, 1.7 million banking accounts, and $7.48 trillion in client assets as of January 31, 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 January 2023
	2022																																				2023			Change
	Jan			Feb			Mar			Apr			May			Jun			Jul			Aug			Sep			Oct			Nov			Dec			Jan			Mo.	Yr.
Market Indices (at month end)
Dow Jones Industrial Average®	35,132			33,893			34,678			32,977			32,990			30,775			32,845			31,510			28,726			32,733			34,590			33,147			34,086			3%	(3%)
Nasdaq Composite®	14,240			13,751			14,221			12,335			12,081			11,029			12,391			11,816			10,576			10,988			11,468			10,466			11,585			11%	(19%)
Standard & Poor’s® 500	4,516			4,374			4,530			4,132			4,132			3,785			4,130			3,955			3,586			3,872			4,080			3,840			4,077			6%	(10%)
Client Assets (in billions of dollars)
Beginning Client Assets	8,138.0			7,803.8			7,686.6			7,862.1			7,284.4			7,301.7			6,832.5			7,304.8			7,127.6			6,644.2			7,004.6			7,320.6			7,049.8
Net New Assets (1)	33.6			40.6			46.3			(9.2	)		32.8			19.8			31.5			43.3			39.8			42.0			33.1			53.3			36.1			(32%)	7%
Net Market (Losses) Gains	(367.8	)		(157.8	)		129.2			(568.5	)		(15.5	)		(489.0	)		440.8			(220.5	)		(523.2	)		318.4			282.9			(324.1	)		394.7
Total Client Assets (at month end)	7,803.8			7,686.6			7,862.1			7,284.4			7,301.7			6,832.5			7,304.8			7,127.6			6,644.2			7,004.6			7,320.6			7,049.8			7,480.6			6%	(4%)
Core Net New Assets (2)	33.6			40.6			46.3			(9.2	)		32.8			40.6			31.5			43.3			39.8			42.0			33.1			53.3			36.1			(32%)	7%
Receiving Ongoing Advisory Services (at month end)
Investor Services	541.9			533.7			538.9			509.3			513.0			483.8			514.8			499.2			466.6			487.3			514.0			499.8			524.6			5%	(3%)
Advisor Services (3)	3,382.4			3,342.5			3,404.6			3,190.5			3,213.8			3,040.4			3,222.5			3,150.5			2,950.9			3,106.0			3,270.5			3,173.4			3,345.4			5%	(1%)
Client Accounts (at month end, in thousands)
Active Brokerage Accounts (4)	33,308			33,421			33,577			33,759			33,822			33,896			33,934			33,984			33,875			33,896			33,636			33,758			33,878			-	2%
Banking Accounts	1,628			1,641			1,641			1,652			1,658			1,669			1,680			1,690			1,696			1,706			1,705			1,716			1,729			1%	6%
Corporate Retirement Plan Participants	2,216			2,235			2,246			2,261			2,275			2,275			2,267			2,285			2,305			2,322			2,336			2,351			2,369			1%	7%
Client Activity
New Brokerage Accounts (in thousands)	426			356			420			386			323			305			278			332			287			298			303			330			344			4%	(19%)
Client Cash as a Percentage of Client Assets (5)	11.3	%		11.5	%		11.4	%		11.9	%		12.0	%		12.8	%		12.0	%		12.1	%		12.9	%		12.2	%		11.5	%		12.3	%		11.6	%		(70) bp	30 bp
Derivative Trades as a Percentage of Total Trades	22.4	%		24.0	%		22.4	%		21.9	%		22.6	%		22.3	%		24.2	%		23.3	%		23.6	%		24.1	%		24.6	%		23.2	%		23.0	%		(20) bp	60 bp
Selected Average Balances (in millions of dollars)
Average Interest-Earning Assets (6)	622,997			629,042			644,768			636,668			620,157			614,100			605,751			586,154			568,351			552,631			527,019			520,100			512,893			(1%)	(18%)
Average Margin Balances	86,737			84,354			81,526			83,762			78,841			74,577			72,177			72,855			73,224			69,188			66,011			64,759			60,211			(7%)	(31%)
Average Bank Deposit Account Balances (7)	157,706			153,824			155,657			152,653			154,669			155,306			154,542			148,427			141,198			136,036			130,479			126,953			122,387			(4%)	(22%)
Mutual Fund and Exchange-Traded Fund
Net Buys (Sells) (8,9) (in millions of dollars)
Equities	7,384			9,371			14,177			(786	)		1,889			(1,586	)		5,589			10,465			(2,662	)		3,984			3,777			(1,837	)		7,236
Hybrid	(367	)		(478	)		(497	)		(529	)		(1,718	)		(1,054	)		(2,041	)		(783	)		(938	)		(1,380	)		(2,052	)		(1,595	)		(433	)
Bonds	1,804			(1,973	)		(7,851	)		(6,933	)		(6,121	)		(5,631	)		729			(141	)		(5,801	)		(7,218	)		(3,721	)		(3,260	)		5,646
Net Buy (Sell) Activity (in millions of dollars)
Mutual Funds (8)	(4,961	)		(6,318	)		(11,888	)		(16,657	)		(20,761	)		(16,258	)		(8,674	)		(7,117	)		(15,200	)		(18,473	)		(17,143	)		(21,851	)		552
Exchange-Traded Funds (9)	13,782			13,238			17,717			8,409			14,811			7,987			12,951			16,658			5,799			13,859			15,147			15,159			11,897
Money Market Funds	(1,984	)		(1,086	)		(1,344	)		(3,430	)		7,106			11,544			13,711			19,702			17,018			21,542			16,929			27,778			24,285

	Note: Certain supplemental details related to the information above can be found at: https://www.aboutschwab.com/financial-reports.
(1)	June 2022 includes an outflow of $20.8 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)	November 2022 includes the company-initiated closure of approximately 350 thousand low-balance accounts. September 2022 includes the company-initiated closure of approximately 152 thousand low-balance accounts.
(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 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.
(7)	Represents average TD Ameritrade clients’ uninvested cash sweep account balances held in deposit accounts at third-party financial institutions.
(8)	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.
(9)	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/20230214005340/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 Charles Schwab's net new assets in January 2023?

Charles Schwab reported core net new assets of $36.1 billion in January 2023.

How did Schwab's client assets change year-over-year in January 2023?

Total client assets decreased by 4% year-over-year, totaling $7.48 trillion.

What percentage of client assets was cash as of January 2023?

Client cash represented 11.6% of total assets at month-end January 2023.

What is the annualized growth rate of net new assets for Schwab in January 2023?

The annualized growth rate of net new assets was 6% for January 2023.