Client assets hit the heights at Schwab

With investors moving out of cash, assets reach record levels

The Charles Schwab Corp. today reported increases in net revenue and profits for the first quarter, driven by a return of the individual investor to the market.
Net revenues were up 23% for the quarter, to $1.2 billion, compared to a year ago. Net income hit $243 million, up from $6 million from the first quarter of 2010 when the company took a write-off from the YieldPlus fund settlement.
Schwab clients “have now reduced the percentage of their assets … in cash to pre-crisis levels,” said chairman Charles Schwab in a statement.
Client assets continued to hit record levels. Total assets at the firm as of March 31 were $1.65 billion.
Assets at Schwab’s adviser custody unit, called Advisor Services, hit a record $688.6 billion. Its RIA firms raked in $14.2 billion in net new assets during the quarter.
Schwab’s discount brokerage business held $714.8 billion in assets, and brought in $5.7 billion in net new funds.
Total assets at the firm first recovered to pre-crisis levels a year ago.
Schwab officials said the company was well positioned for rising interest rates.
Low rates have hurt securities firms, since interest earnings are a key revenue component.
“We believe [Schwab] has the most leverage to rising rates of any name we cover,” said Ticonderoga Securities analyst Douglas Sipkin in a report today.