NU Online News Service, Oct. 21, 2003, 4:54 p.m. EDT – The stock market rebound and growth in sales of advisory services helped The Charles Schwab Corp., San Francisco, turn in stronger third quarter results.
Schwab is reporting $127 million in net income for the latest quarter on $1.1 billion in revenue, up from a net loss of $4 million on $1 billion in revenue for the third quarter of 2002.
Clients handed $11 billion more new assets to Schwab during the quarter than they took away. Volume was about the same as it was during the comparable quarter in 2002.
But Schwab clients enjoyed $21 billion in net market gains on their assets during the latest quarter. A year ago, client statements showed $81 billion in net market losses.
Although Schwab made its name as a no-frills discount broker, it now sells advisory services through its own advisors and also sells support services to outside advisors.
Thanks to healthy sales and improved investment results, assets in Schwab advisory programs totaled $388 billion Sept. 30, up 21% from the total reported a year earlier.
Client assets in Schwab 401(k) plans and other Schwab retirement plans increased 24%, to $105 billion.
The company is trying to expand its 401(k) plan program even more by starting a service that will give 401(k) plan participants specific recommendations about savings rates and investment fund choices.
“Participants will also have the option of automatic account rebalancing,” says Schwab Chief Executive David Pottruck.