Following a protracted period of pain in 2023, Charles Schwab encountered yet another setback in January as it saw a steep decline in asset flows.
In its latest monthly activity report, the financial services behemoth said it took in $14.8 billion in net new client assets in January, which marked a 65% decline from the $36.1 billion for the same period last year, and a 59% deceleration from the $42.1 billion it raked in during December.
A look at core net assets reveals a similarly pessimistic picture. While the $17.2 billion in core net new assets might seem encouraging at first blush, it’s still a 60% annual decline from January 2023, and 52% less than in December.
“Transactional sweep cash ended January 2024 at $406.1 billion, representing a decrease of $11.3 billion versus the prior month,” Schwab said in the statement announcing its January results. “This decline was in-line with typical January seasonality as clients reengaged with the markets following a nearly $15 billion build-up in cash during December 2023.”
Over the past 12 months, Schwab has suffered several periods of significant slowdowns in new client assets. From a peak of nearly $73 billion in March last year, new assets trickled down to $8.1 billion in August, then rebounded to $27.2 billion in September before hitting a new low of $5 billion in October.
Those fits of weakening roughly coincided with a number of concerning revelations from the brokerage giant.
Among the first cracks was a 9% year-on-year decline in revenue during the second quarter of 2023, which CFO Peter Crawford chalked up to “significant near-term headwinds” during the rising-rate cycle.
“Net interest revenue declined 10% from the prior year to $2.3 billion as the incorporation of higher cost liabilities brought our net interest margin down by 32 basis points sequentially to 1.87%,” he explained at the time.
In September, Schwab saw its share price drop alongside net new assets. The drop in flows, it said, were due to issues related to the integration of TD Ameritrade, with some Ameritrade clients choosing to depart the platform.
In November, as part of a broader $500 million cost-cutting effort, the company said that it had laid off 2,000 people, representing 5% to 6% of its employees.
Last month, the brokerage giant said net new assets for the fourth quarter declined 48%, with net income also dropping by almost half.
“No one at Schwab is kidding themselves that everything is perfect right now,” CEO Walt Bettinger said during the January earnings call. “Perhaps it was the most challenging in my time at Schwab – certainly the most challenging since the bursting of the internet bubble in 2000.”
Driven by robust transaction activity amid market turbulence and increased focus on billion-dollar plus targets, Echelon Partners expects another all-time high in 2025.
The looming threat of federal funding cuts to state and local governments has lawmakers weighing a levy that was phased out in 1981.
The fintech firms' new tools and integrations address pain points in overseeing investment lineups, account monitoring, and more.
Canadian stocks are on a roll in 2025 as the country prepares to name a new Prime Minister.
Carson is expanding one of its relationships in Florida while Lido Advisors adds an $870 million practice in Silicon Valley.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.