Charles Schwab reported mixed results for the second quarter as net income was up significantly from the year-over-year figures but down slightly from the first quarter.
The Westlake, Texas-headquartered financial services company reported $1.3 billion in net income for the second quarter on revenue of $4.5 billion, helped along by the country’s returning normalcy, the ascent of equity markets and the brokerage firm’s acquisition of TD Ameritrade.
However, the firm also reported a slowdown in daily trade volume, which averaged 6.0 million over the second quarter. This was down 28% from its record first quarter. Schwab also set aside $200 million this quarter related to an SEC probe of its robo advisor platform.
Nevertheless, the firm’s “strong business momentum” was sustained by its ability to attract new clients and “deepen existing relationships” through Schwab’s “contemporary full-service model,” according to CEO Walt Bettinger in a press release.
Against this evolving backdrop, he said Schwab continued to support highly engaged investors even as activity levels moderated from the first-quarter surge.
- By the numbers: Core net new assets totaled $108.8 billion, up 133% from a year ago and the highest second quarter in the firm’s history. Schwab’s first-half core net new assets also reached $257 billion, more than double the first half of 2020. Total client assets reached a record $7.57 trillion, up 7% from the prior record set three months beforehand, and up 84% year-over-year.
- Making moves: The brokerage firm has re-opened nearly all of its 406 branches, including 80 independent branches, during the second quarter. It recently rolled out the newly combined Schwab Advisor Network, consisting of independent advisory firms to serve high and ultra-high-net-worth investors. Lastly, its referral program for USAA members has led to 5,000 new accounts opened per month on average.
- Remarks: For the remainder of the year, Bettinger said Schwab’s focus remains on its clients. “As we help them work towards their financial goals, strive to meet their service expectations and drive forward on all of our integration efforts, we are simultaneously building the future of modern wealth management,” he said.