Schwab Earnings Hold Up Despite Plunging Trading Revenue, Ambivalent Account Numbers Hot

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While Schwab boosted its overall client assets 22% to a whopping $1.6 trillion in the quarter, its profit growth lagged significantly, up only 17%.

 

The root of the problem: while more investors were parking their money on the Schwab platform, fewer were trading. In terms of account activity, last May was 23% worse for the firm than it was in the previous year, while April and June were flat at best.

 

In all, trading revenue sank 12% on an annualized basis and 14% quarter over quarter.

 

They did manage to capture about 80,000 new brokerage accounts, but lost 28,000 retirement plan participants.

 

And on the advisory side -- the firm's crowning glory, to some analysts -- new assets were hard for affiliated RIAs to come by. Overall advisory AUM surged a healthy 17% year over year, but only edged up 1% from the first quarter.

 

New advisory assets are still up 4% over last year, but down a disturbing 25% over last quarter. 

 

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