Charles Schwab Corp. said it’s experiencing temporarily lower net flows of client money as the brokerage sees attrition of some retail and advisory clients’ assets while it integrates TD Ameritrade into its business.
The company has stepped back from certain custodial relationships that Ameritrade had offered to institutional clients, Peter Crawford, chief financial officer at Charles Schwab, said in a statement Monday. The client attrition is in line with Schwab’s expectations for the deal when it was announced in 2019 and will subside in the first half of next year, Crawford said.
Schwab’s attrition amounts to about 4% of Ameritrade revenue prior to the deal, or around 1% of combined total client assets as of the end of last year, Crawford said.
The Westlake, Texas-based company repeated its expectation that client deposits will begin growing again later this year.
Schwab has faced pressure from investors in recent months, particularly after the March collapse of several midsize U.S. lenders focused attention on unrealized losses from securities held on bank balance sheets.
The Federal Reserve’s interest rate hikes over the past year have pressured the bank’s banking arm, a pivotal source of revenue, as some clients moved their money from the bank to other investment products, including money-market funds, in a process known as “cash sorting.”
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.
"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
Chair also praised the passage of stablecoin legislation this week.
Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
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.
