Schwab’s August Net New Assets Decline Amid TDA Integration 

Charles Schwab Stock

Charles Schwab (NYSE:SCHW) has released its monthly activity report for August 2023. Due to the temporary attrition of TD Ameritrade (TDA) clients and advisors, the company’s core net new assets (NNA) for the reported month amounted to $4.9 billion. This represents a 64% decline from the previous month and an 89% drop from the prior year.

SCHW’s CFO, Peter Crawford, explained, As anticipated, the company’s overall net new assets (NNA) have experienced a temporary impact due to the reduction in assets from clients who came from Ameritrade. At present, the attrition levels are significantly improved compared to what was initially communicated when we announced the acquisition back in November 2019. The majority of these outflows related to the deal can be attributed to Ameritrade RIA clients, including a limited number of relationships that did not align with our criteria for an ongoing service partnership

In August 2023, total client assets reached $8.09 trillion, a 2% decrease from July 2023 but a 14% increase from August 2022. Client assets under ongoing advisory services stood at $4.11 trillion, down 2% from the previous month but up 13% year over year.

Schwab reported average interest-earning assets of $449.5 billion in August 2023, marking a 4% decline from July 2023 and a 23% decrease year over year. Average margin balances were $64.2 billion, up 2% from the previous month but down 12% compared to the previous year. 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, reflecting a 3% increase sequentially but a 6% decrease from the same month in the previous year.

Schwab concluded August 2023 with 34.4 million active brokerage accounts, remaining relatively stable on a sequential basis and rising 1% from the prior year. Clients’ banking accounts numbered 1.80 million, showing stability sequentially and a 6% increase from August 2022. The number of corporate retirement plan participants remained unchanged from the previous month and increased 8% year over year to 2.46 million.

Over the past six months, Schwab’s shares have gained 3.8%, compared to the industry’s rise of 7.7%.

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