Charles Schwab reported earnings that beat expectations but fell from year-ago results for the quarter ending Sept. 30, just one week before it wrapped up its $22 billion purchase of former rival TD Ameritrade.
But this quarter saw a sizable drop in a key industry metric for Schwab — net new assets — and continued revenue fallout from low interest rates.
Schwab earned adjusted profits of $749 million, or $0.51 per share, down 22% and 27%, respectively, from the third quarter of 2019. Revenue fell 10% to $2.45 billion. (Future quarters will include TD Ameritrade results.)
CEO Walt Bettinger said that the Schwab Advisor Network referral program “reached a new milestone by crossing the $100 billion mark during the quarter.” The program includes 175 RIA firms nationwide and about 50,000 clients.
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Total client assets jumped year over year by 17% to nearly $4.4 trillion — with RIA-related assets at $2.02 billion and retail investor assets at $2.38 billion.
Net new assets — viewed as a key growth metric in the business — fell 10% overall from a year ago and 63% from the prior quarter to $51.2 billion.
RIAs, though, grew net new assets by 4% from last year and 32% from the earlier quarter to hit $32.8 billion. These results included $8.5 billion of inflows from Schwab’s acquisition of Wasmer, Schroeder & Co.