Charles Schwab (SCHW Quick QuoteSCHW - Free Report) is expanding beyond traditional brokerage services into wealth management, banking, lending, active trading and digital assets. Given the company’s large client base, this strategy could support growth through deeper client relationships and cross-selling without requiring proportionate increases in customer acquisition costs.

At the end of July 2026, Schwab had $13.04 trillion in total client assets, 39.9 million active brokerage accounts, 5.9 million workplace plan participant accounts and 2.4 million banking accounts. Core net new assets of $58.1 billion in July increased 24% year over year, highlighting continued organic asset-gathering strength.

1H26 Select Highlights
 

Image Source: The Charles Schwab Corporation

SCHW’s Broader Investment Offerings to Boost Engagement

Schwab continues to strengthen its investment and active-trading platform, offering equities, ETFs, mutual funds, fixed income, options and futures, along with advanced capabilities through thinkorswim.

In May 2026, Schwab expanded into digital assets by launching Schwab Crypto, providing retail clients direct access to Bitcoin and Ethereum trading. In the coming months, the company plans to add three more tokens – Solana, Avalanche and Chainlink – to the Schwab Crypto platform. It has also introduced Portfolio Insights, a generative AI-powered tool designed to help investors better understand portfolio performance.

Trading engagement remains strong. Daily average trades reached 10.9 million in the first half, up 46% year over year, while trading revenues increased 24% to $2.3 billion. Continued product innovation could help Schwab capture more client activity and strengthen its appeal among active and younger investors.

Schwab’s Wealth Management Offers Recurring Revenue Potential

Schwab is also deepening its wealth management capabilities. First-half net flows into Managed Investing Solutions increased almost 50% year over year. 

Asset management and administration fees rose 16% to $3.6 billion, supported by organic asset growth and greater adoption of managed solutions. Higher advisory penetration is expected to generate more recurring, asset-based revenues and reduce Schwab’s dependence on trading activity.

Banking and Lending to Increase SCHW’s Wallet Share

Schwab’s banking and lending expansion provides another avenue for growth. Bank loan balances reached $67 billion as of June 30, 2026, up 33% year over year, while Pledged Asset Line balances surged 59% to $33.4 billion.

Bank Lending Balances (EOP)
 

Image Source: The Charles Schwab Corporation

As such, bank deposit account fee revenues grew 28% year over year to $628 million in the first six months of 2026. By combining investing, advisory, liquidity and borrowing solutions, Schwab can potentially capture a larger share of clients’ financial activity while improving retention and increasing switching costs.

Diversification Strengthens Schwab’s Revenue Mix

The benefits are already visible. First-half revenues rose 18% year over year to a record $13.6 billion, driven by higher net interest revenue, asset management and administration fees, and trading revenue. Hence, adjusted earnings climbed 41% to $3.05 per share.

A broader revenue base is expected to help offset Schwab’s sensitivity to interest rates, client cash allocation and trading volumes. Its scale also provides an advantage, as new products can be distributed across tens of millions of existing accounts. Driven by these factors, the Zacks Consensus Estimate for sales for 2026 and 2027 implies year-over-year growth of 18.3% and 12.1%, respectively.

Sales Estimates
 

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Still, competition, technology and compliance costs, market volatility and uncertain monetization of newer offerings such as crypto remain major risks.

How to Approach Schwab Stock Now?

So far this year, shares of Schwab have gained 8.4%, trailing the industry’s 10.9% rally. Over the same period, Interactive Brokers (IBKR Quick QuoteIBKR - Free Report) has surged 40.5%, while Robinhood Markets (HOOD Quick QuoteHOOD - Free Report) has declined 8.5%.

YTD Price Performance
 

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From a valuation standpoint, Schwab appears relatively expensive compared with the industry. The stock is currently trading at a price-to-tangible book (P/TB) multiple of 7.73X, well above the industry average of 3.32X.

P/TB TTM
 

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Among its peers, Interactive Brokers trades at a P/TB multiple of 1.83X, while Robinhood trades at 10.75X. Thus, SCHW commands a substantial premium to Interactive Brokers but remains less expensive than Robinhood. Its elevated valuation relative to the broader industry suggests that investors are already pricing in a meaningful portion of Schwab’s growth prospects.

Nevertheless, the earnings outlook remains encouraging. Analysts have raised their earnings estimates for 2026 and 2027 over the past two months. The Zacks Consensus Estimate implies year-over-year earnings growth of 32.7% in 2026 and 21.2% in 2027. 

Earnings Estimates
 

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Schwab’s expanding product ecosystem, strong organic asset gathering, rising adoption of advisory solutions and growing lending activity provide multiple avenues for long-term growth. Its ability to deepen relationships with its massive client base and capture a greater share of clients’ financial activity are expected to support a more diversified revenue mix and sustained earnings expansion.

While the stock’s premium valuation warrants some caution, improving earnings prospects and continued momentum across its businesses support a favorable investment case. Therefore, investors seeking exposure to a large-scale brokerage and wealth management franchise can consider adding Schwab shares to their portfolios.

At present, SCHW carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.