Schwab (SCHW) Records a Fall in April Core Net New Assets
Charles Schwab SCHW released its monthly activity report for April 2023. Core net new assets were negative $2.3 billion in the reported month. This compared with core net new assets of $53.9 billion in March 2023 and negative net new assets of $9.2 million.
Total client assets were $7.63 trillion, up 1% from March 2023 and 5% from April 2022. Likewise, client assets receiving ongoing advisory services were $3.92 trillion, rising marginally from the prior month and 6% year over year.
Schwab’s average interest-earning assets of $493.2 billion in the reported month declined 1% from March 2023 and 23% year over year. Average margin balances were $60.3 billion, decreasing 1% from the previous month and 28% on a year-over-year basis. Average bank deposit account balances totaled $104.8 billion, down 4% sequentially and 31% from April 2022.
The company opened 331,000 new brokerage accounts in April 2023, declining 12% sequentially and 14% from the year-earlier month.
Schwab’s active brokerage accounts totaled 34.2 million at the end of April 2023, which remained stable on a sequential basis and rose 1% from the year-ago month. Clients’ banking accounts were 1.76 million, up 1% sequentially and 6% from April 2022. The number of corporate retirement plan participants was up 1% from the prior-month level and 6% year over year to 2.39 million.
The company's inorganic growth efforts have reinforced its position as a leading brokerage player and are expected to be accretive to earnings. By offering commission-free trading, it has witnessed a decent rise in client assets and active brokerage accounts, which is improving its market share.
Over the past six months, shares of Schwab have declined 36.8% compared with 18% fall of the industry.
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Currently, the company carries a Zacks Rank #5 (Strong Sell).
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Competitive Landscape
A couple of other brokerage firms that came out with monthly data are Interactive Brokers Group IBKR and LPL Financial Holdings Inc. LPLA.
Interactive Brokers released the Electronic Brokerage segment’s performance metrics for April 2023. The segment deals with the clearance and settlement of trades for individual and institutional clients globally. It reported a decline in client Daily Average Revenue Trades (DARTs) on a sequential and a year-over-year basis.
IBKR's total client DARTs for the month were 1,765,000, which declined 14% from the March 2023 level and 20% year over year.
LPL Financial is likely to come out with its monthly activity report in the coming days.
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The Charles Schwab Corporation (SCHW) : Free Stock Analysis Report
Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report
LPL Financial Holdings Inc. (LPLA) : Free Stock Analysis Report
