Charles Schwab and TD Ameritrade benefited from the influx of investors into the rising stock market in the final months of 2016.
Schwab’s fourth-quarter profits were $522 million, or $0.36 per share, up 25% from $416 million, or $0.28 per share, a year earlier — meeting analysts’ estimates. Sales grew 17% to $1.97 billion but missed estimates.
In terms of asset flows in Q4’16, Advisor Services saw its flows grow 9% year over year and 47% from last quarter to $23.2 billion; this segment now has total assets of $1.3 trillion. Investor Services had new flows of $13.7 billion in Q4’16 and ended the year at $1.5 trillion.
“New and existing clients brought $125.5 billion in core net new assets to Schwab during 2016, marking a 5% annual organic growth rate and the fifth consecutive year over $100 billion. Net new assets in our Retail and Advisor Services businesses rose by 10% and 21%” respectively for the full year vs. 2015, explained CEO Walt Bettinger in a statement.
The number of new retail brokerage accounts at Schwab increased 21% to 182,000, and the number of financial planning conversations rose 10% to 32,000 clients. Total client assets at year-end were up 11% to $2.78 trillion.
The total level of assets in Advice Solutions, including managed portfolios, was $212.3 billion — up from $192.6 billion a year ago. Assets in Intelligent Portfolios more than doubled to $11.1 billion from $4.9 billion in Q4’15. Fee-based portfolios ended the period at $184 billion vs. $172 billion last year.