Charles Schwab Reports Strong Q2 Results

Tom Burroughes

20 July 2015

San Francisco-headquartered , the brokerage and financial services firm working in sectors including wealth management, has reported a 9 per cent year-on-year rise in net income for the second quarter of this year, reaching $353 million, also up 17 per cent from the first three months of this year.

Financial results for the second quarter and first six months of 2015 include litigation proceeds of about $17 million (included in “other” revenue) relating to the company’s non-agency residential mortgage-backed securities portfolio; this increased earnings per share by $0.01, it said in a statement last week.

The firm gathered $37.0 billion of core net new assets, the highest second quarter in the firm’s history, and maintained a 6 per cent annualised organic growth rate despite seasonal tax outflows in April, Walt Bettinger, chief executive, said.

Clients opened 280,000 new brokerage accounts, up 16 per cent year-over-year and another second-quarter record. Total client assets were $2.54 trillion at quarter-end, up 6 per cent from a year ago. Client assets under the guidance of a registered independent advisor or enrolled in one of its retail or other advisory solutions also rose 6 per cent year-over-year, to $1.26 trillion.

At the end of June, the firm served 9.6 million brokerage accounts, 1.0 million banking accounts, and 1.5 million retirement plan participants, up 4 per cent, 6 per cent and 10 per cent respectively from the second quarter of 2014.

New retail brokerage accounts for the quarter totaled approximately 176,000, up 19 per cent year-over-year; total accounts were 6.7 million as of 30 June, up 2 per cent year-over-year, it said. The firm said it held financial planning conversations with approximately 29,000 clients. Approximately 54,000 planning conversations have been held year-to-date.

On the advisor services side of the business, Charles Schwab launched Institutional Intelligent Portfolios, an automated investment management platform for RIAs; firms can create their own set of portfolios choosing from over 450 ETFs across 28 asset classes and all major fund families.