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Schwab Closing In on $6T in Assets

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Stock images of Schwab and TD Ameritrade signs (Photos: Bloomberg/Shutterstock; Image by Chris Nicholls/ALM)

Charles Schwab said Friday its total level of assets — including those acquired from TD Ameritrade — were $5.88 trillion as of Oct. 31, up 53% from a year ago and 34% from Sept. 30.

This includes $1.6 trillion in assets added by its $22 billion purchase of the former rival, which closed on Oct. 6. When Schwab announced plans to buy TD Ameritrade a year ago, the estimated combined assets were $5.1 trillion.

As it moves toward the $6 trillion asset level, Schwab is catching up to Vanguard with $6.6 trillion, BlackRock with $7.3 trillion and Fidelity with $9 trillion ($3.5 trillion of which are discretionary assets).

Schwab’s core net new assets for October were $25.6 billion. This figure excludes $1 billion in net new assets at TD Ameritrade from Oct. 1 to Oct. 5. 

RIA Update

Assets at Schwab Advisor Services — the firm’s RIA channel — totaled $2.55 trillion as of Oct. 31, up 51% from a year ago and 36% from Sept. 30. 

At the end of September, Schwab had $1.87 trillion of assets tied to RIA clients; thus, it appears to have gained roughly $680 billion from TD Ameritrade RIAs. (It does not state the actual figure in its latest monthly report.) 

The numbers of total active brokerage accounts, 29 million, was up 138% from a year ago and 102% from September. Schwab, which had 14.4 million accounts on Sept. 30, says it added 14.5 million new brokerage accounts from TD Ameritrade and some 200,000 from other sources.  

Average interest-earning assets on the company’s balance sheet were $442.1 billion in October, up 66% from October 2019 and up 13% compared to September 2020.

Client cash as a percentage of total client assets rose to 13.4% in October from 12.8% in September and 11.3% a year ago. 

For more details on the the deal’s history and insights into what it means for the future of the RIA industry: