uploads///Investor services

Charles Schwab Investor Services Expanded on Planning Services


Jan. 20 2016, Published 2:11 p.m. ET

Investor Services

Charles Schwab’s (SCHW) Investor Services division reported total client assets of $1.4 trillion in the fourth quarter of 2015, a rise of 4% from 3Q15. Clients in this division added $21.6 billion in new assets.

The Investor Services division’s assets make up 54% of Charles Schwab’s total client assets. The company provides retail brokerage and banking services to individual investors, retirement plan services, and corporate brokerage services under its Investor Services division.

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Financial planning

Charles Schwab focuses on its individual customers’ financial needs. It aims to provide customized solutions to these needs. Its prime focus is handling wealth management rather than simply providing a platform for trading activity. The company’s banking services are utilized by brokers, dealers, and clients to maximize the value of its clients’ deposits.

Charles Schwab’s Investor Services added 151,000 retail brokerage accounts in 4Q15, up 3% from 4Q14. Total accounts for the division rose by 3% to 6.9 million as of December 31, 2015. The company focuses on financial planning for retail customers, holding 29,000 conversations about financial planning in 4Q15, up 21% compared to 4Q14.

Charles Schwab’s retirement plan services segment has introduced advisor-managed accounts, under which retirement plan consultants can build and manage customized portfolios for the plans they support, helping more 401(k) participants receive retirement plan advice and achieve better outcomes.

Charles Schwab has also launched electronic agreements and disclosures, enabling it to send new account documents electronically, simplifying the paperless enrollment process.

Here is how a few of the company’s peers in the brokerage industry have fared in terms of revenue in the last 12 months:

  • Interactive Brokers Group (IBKR) posted revenue of $1.1 billion.
  • TD Ameritrade (AMTD) posted revenue of $3.1 billion.
  • E*TRADE (ETFC) posted revenue of $1.8 billion.

Together, these companies form 10.8% of the iShares US Broker-Dealers ETF (IAI).


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