Charles Schwab reports total client assets $8.24T as of month-end July

The Charles Schwab Corporation released its monthly activity report today. Company highlights for the month of July 2023 include: Core net new assets brought to the company by new and existing clients totaled $13.7B. Net new assets excluding mutual fund clearing totaled $11.9B. Total client assets were $8.24T as of month-end July, up 13% from July 2022 and up 3% compared to June 2023. Average margin balances were $63B in July, down 13% from July 2022 and up 2%compared to June 2023. Chief Financial Officer Peter Crawford commented, “As we continue to progress through the Ameritrade client conversion, we are observing initial evidence of the deal-related attrition we allowed for within the transaction math outlined at the announcement back in November 2019. These temporarily lower net flows reflect our organic asset gathering being offset by expected attrition within certain client cohorts, including recently converted Ameritrade retail clients as well as a modest number of Ameritrade advisor clients ahead of their planned transition to the Schwab platform in September. Additionally, we have elected to proactively resign from certain atypical custodial relationships previously served by Ameritrade’s institutional business that are inconsistent with our approach to serving Registered Investment Advisors. We anticipate these temporary conversion-related dynamics will subside following the completion of the final transition group during the first half of 2024. Based on our experience with the first two conversion groups, as well as our latest projections, we believe that the ultimate attrition will be in-line with or slightly better than our initial estimates – approximately 4% of Ameritrade revenue prior to the deal or around 1% of combined total clientassets as of December 31, 2022. With all of this in mind, Schwab’s competitive position remains strong as July new brokerage accounts increased 9% from the prior year to 303 thousand – marking the 9th consecutive month of new accounts exceeding 300 thousand. In addition to our overall July results demonstrating healthy client engagement and momentum, the average daily pace of client cash realignment outflows during the month remained generally consistent with prior periods, even as strong net equity purchasing persisted throughout the month. The continuation of this trend further underscores our confidence that we will see a resumption of deposit growth later this year.”