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Schwab's (SCHW) August Net New Assets Fall Amid TDA Integration
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Charles Schwab (SCHW - Free Report) released its monthly activity report for August 2023. Because of the temporary attrition of TD Ameritrade (“TDA") clients and advisors, the company’s core net new assets of $4.9 billion in the reported month declined 64% from the previous month and 89% from the prior-year month.
SCHW’s CFO, Peter Crawford, stated, “As expected, firmwide NNA has been temporarily impacted by asset attrition from clients originating at Ameritrade. Currently, attrition levels are measurably better than what we communicated at the time we announced the acquisition in November 2019. The majority of these deal-related outflows have been attributable to Ameritrade RIA clients, including a select number of relationships that did not meet our criteria for an ongoing service relationship.”
The company’s total client assets in August 2023 were $8.09 trillion, down 2% from July 2023 but up 14% from August 2022. Client assets receiving ongoing advisory services were $4.11 trillion, down 2% from the prior month and up 13% year over year.
Schwab’s average interest-earning assets of $449.5 billion in the reported month declined 4% from July 2023 and 23% year over year. Average margin balances were $64.2 billion, up 2% from the previous month but down 12% on a year-over-year basis. Average bank deposit account balances totaled $101.9 billion, down 1% from the previous month and 31% from August 2022.
The company opened 311,000 new brokerage accounts in August 2023, up 3% sequentially but down 6% from the year-earlier month.
Schwab’s active brokerage accounts totaled 34.4 million at the end of August 2023, which were relatively stable on a sequential basis and rose 1% from the year-ago month. Clients’ banking accounts were 1.80 million, stable sequentially and up 6% from August 2022. The number of corporate retirement plan participants was unchanged from the prior-month level and up 8% year over year to 2.46 million.
Over the past six months, shares of Schwab have gained 3.8% compared with a rise of 7.7% of the industry.
Let’s look at how other brokerage firms like Interactive Brokers Group (IBKR - Free Report) and LPL Financial Holdings Inc. (LPLA - Free Report) have performed in August 2023.
Interactive Brokers released the Electronic Brokerage segment’s performance metrics for August 2023. The segment deals with the clearance and settlement of trades for individual and institutional clients globally. It reported a decline in client Daily Average Revenue Trades (DARTs) on a sequential and year-over-year basis.
For IBKR, total client DARTs were 1,931,000, declining 3% from July 2023 and 2% year over year.
LPL Financial is likely to come out with its monthly activity report in the coming days.
Currently, IBKR and LPLA carry a Zacks Rank #3.
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Schwab's (SCHW) August Net New Assets Fall Amid TDA Integration
Charles Schwab (SCHW - Free Report) released its monthly activity report for August 2023. Because of the temporary attrition of TD Ameritrade (“TDA") clients and advisors, the company’s core net new assets of $4.9 billion in the reported month declined 64% from the previous month and 89% from the prior-year month.
SCHW’s CFO, Peter Crawford, stated, “As expected, firmwide NNA has been temporarily impacted by asset attrition from clients originating at Ameritrade. Currently, attrition levels are measurably better than what we communicated at the time we announced the acquisition in November 2019. The majority of these deal-related outflows have been attributable to Ameritrade RIA clients, including a select number of relationships that did not meet our criteria for an ongoing service relationship.”
The company’s total client assets in August 2023 were $8.09 trillion, down 2% from July 2023 but up 14% from August 2022. Client assets receiving ongoing advisory services were $4.11 trillion, down 2% from the prior month and up 13% year over year.
Schwab’s average interest-earning assets of $449.5 billion in the reported month declined 4% from July 2023 and 23% year over year. Average margin balances were $64.2 billion, up 2% from the previous month but down 12% on a year-over-year basis. Average bank deposit account balances totaled $101.9 billion, down 1% from the previous month and 31% from August 2022.
The company opened 311,000 new brokerage accounts in August 2023, up 3% sequentially but down 6% from the year-earlier month.
Schwab’s active brokerage accounts totaled 34.4 million at the end of August 2023, which were relatively stable on a sequential basis and rose 1% from the year-ago month. Clients’ banking accounts were 1.80 million, stable sequentially and up 6% from August 2022. The number of corporate retirement plan participants was unchanged from the prior-month level and up 8% year over year to 2.46 million.
Over the past six months, shares of Schwab have gained 3.8% compared with a rise of 7.7% of the industry.
Image Source: Zacks Investment Research
Currently, SCHW carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Competitive Landscape
Let’s look at how other brokerage firms like Interactive Brokers Group (IBKR - Free Report) and LPL Financial Holdings Inc. (LPLA - Free Report) have performed in August 2023.
Interactive Brokers released the Electronic Brokerage segment’s performance metrics for August 2023. The segment deals with the clearance and settlement of trades for individual and institutional clients globally. It reported a decline in client Daily Average Revenue Trades (DARTs) on a sequential and year-over-year basis.
For IBKR, total client DARTs were 1,931,000, declining 3% from July 2023 and 2% year over year.
LPL Financial is likely to come out with its monthly activity report in the coming days.
Currently, IBKR and LPLA carry a Zacks Rank #3.