Charles Schwab Is Still Losing TD Ameritrade Clients

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Charles Schwab Corporation (SCHW) continues to lose retail customers following its merger with TD Ameritrade that was announced in late 2019, the brokerage said today.

Key Takeaways

  • Charles Schwab is seeing “temporarily lower net flows” as retail clients take their business elsewhere.
  • Chief Financial Officer Peter Crawford said the losses were “in-line or slightly better than [the company’s] initial estimates.”
  • SCHW stock is down 3% in trading today and down nearly 25% year-to-date.

The company’s stock fell almost 4% today as Schwab said “temporarily lower net flows reflect… expected attrition” among Ameritrade’s retail and advisory clients. Charles Schwab is also exiting some of Ameritrade’s “atypical custodial relationships” that don’t align with the company’s approach.

While the brokerage declined to offer specific details on the current state of client loss, Chief Financial Officer Peter Crawford said, “ultimate attrition will be in-line with or slightly better than our initial estimates—approximately 4% of Ameritrade revenue prior to the deal or around 1% of combined total client assets as of December 31, 2022.”

Despite the customer outflows, Charles Schwab saw growth in total assets: $8.24 trillion under management at the end of July. That is up 3% compared to the month prior and 13% compared to a year ago.

Charles Schwab stock is down nearly 25% this year, thanks to a high interest rate environment and increased balance sheet scrutiny following the regional bank crisis triggered by the collapse of Silicon Valley Bank.

Despite slowing deposits, Schwab has performed well in quarterly earnings this year, with SCHW stock popping higher in April and again in July as deposit losses shrank.

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