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New Assets to Benefit Schwab’s Investor Services in 2Q16



Investor Services

Charles Schwab’s (SCHW) Investor Services segment reported total client assets of $1.4 trillion in 1Q16, a rise of 1% from 4Q15. Clients in this division added $15.7 billion in assets. The Investor Services segment’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. In April and May, Charles Schwab’s total assets rose from $2.56 trillion to $2.61 trillion with net new assets of $17.3 billion across the categories.

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Here’s how a few of SCHW’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 Holding (AMTD) posted revenue of $3.1 billion.
  • E*TRADE Financial (ETFC) posted revenue of $1.8 billion.

Together, these companies form 1.4% of the Vanguard Financials ETF (VFH).

Customized solutions

Charles Schwab aims to provide customized solutions to meet its individual customers’ financial needs. Its prime focus is handling wealth management rather than simply providing a platform for trading activity. Brokers, dealers, and clients utilize the company’s banking services to maximize the value of clients’ deposits.

Charles Schwab’s Investor Services segment added 163,000 retail brokerage accounts in 1Q16, down 8% from 4Q15. Total accounts for the division rose by 3% to 6.9 million as of March 31, 2016. The company is focused on financial planning for retail customers and held 34,000 conversations about financial planning in 1Q16, up 36% compared to 4Q15. In April and May 2016, assets receiving advisory services increased to $202.7 billion as compared to $197.9 billion as of March 31, 2016.

In 1Q16 Charles Schwab also hosted an interactive online trading event for 3,600 clients and prospects. The event featured a conversation with Alan Greenspan, a panel hosted by Charles Schwab traders, and a presentation on profit-taking techniques. The company also launched voice ID services that enhance both the safety and convenience of interacting with the company’s products. The biometric technology allows clients to quickly and securely authenticate over the phone simply by saying a passphrase.


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