Schwab 2Q profit fell 31% on lower revenue, special charges

The Charles Schwab Corp. today reported a 31% decline in second-quarter earnings from the year-earlier period, citing low interest rates, restructuring charges and still-weak equities markets.
JUL 16, 2009
The Charles Schwab Corp. today reported a 31% decline in second-quarter earnings from the year-earlier period, citing low interest rates, restructuring charges and still-weak equities markets. The San Francisco-based company said active retail engagement during the quarter, generated by the first market-driven improvement in the Standard & Poor's 500 stock index since the third quarter of 2007, helped offset some of the problems. Schwab added $17 billion in net new assets and 197,000 new brokerage accounts during the quarter, although total client assets were down 12% from June 30, 2008. “As we enter the second half of 2009, the economic and market outlook remains challenging,” chief executive Walt Bettinger said in a statement. He noted that while broad equity indexes rose, they still ended the quarter 20% to 30% below their year-earlier levels. Meanwhile, government monetary policy continues to keep short-term interest rates at unprecedented, near-zero levels that eroded fees for margin accounts and money market funds. “Since both of these factors have a significant influence on the company's revenues, we remain focused on disciplined financial management,” Mr. Bettinger said. Schwab reported net income of $205 million, or 18 cents a share, down from $295 million, 26 cents a share, in the year-earlier quarter. Client assets in businesses for registered investment advisers fell 12%, to $505.4 billion, but were up 11% from the end of this year's first quarter. Net growth in assets in RIA accounts fell 47%, to $7.7 billion, a steeper drop than in Schwab's retail business. The results were in line with the forecasts of analysts.

Latest News

Judge OKs more than $90 million in settlement money for GWG investors
Judge OKs more than $90 million in settlement money for GWG investors

Mayer Brown, GWG's law firm, agreed to pay $30 million to resolve conflict of interest claims.

Fintech bytes: Orion and eMoney add new planning, investment tools for RIAs
Fintech bytes: Orion and eMoney add new planning, investment tools for RIAs

Orion adds new model portfolios and SMAs under expanded JPMorgan tie-up, while eMoney boosts its planning software capabilities.

Retirement uncertainty cuts across generations: Transamerica
Retirement uncertainty cuts across generations: Transamerica

National survey of workers exposes widespread retirement planning challenges for Gen Z, Millennials, Gen X, and Boomers.

Does a merger or acquisition make sense for your firm? Why now is the perfect time to secure your firm’s future
Does a merger or acquisition make sense for your firm? Why now is the perfect time to secure your firm’s future

While the choice for advisors to "die at their desks" might been wise once upon a time, higher acquisition multiples and innovations in deal structures have created more immediate M&A opportunities.

Raymond James continues recruitment run with UBS, Morgan Stanley teams
Raymond James continues recruitment run with UBS, Morgan Stanley teams

A father-son pair has joined the firm's independent arm in Utah, while a quartet of planning advisors strengthen its employee channel in Louisiana.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave