Charles Schwab Corp.’s plan to eliminate trading fees pushed client assets to a record, surpassing $4 trillion, while the firm faced a decline in trading revenue.
Trading revenue plunged 58% to $86 million in the fourth quarter after the company introduced zero-commission trades. Customers opened 433,000 new brokerage accounts in the period, according to a statement issued Thursday.
The results are the first view of how the largest discount broker’s fee change, which was followed by rivals, is impacting Schwab’s bottom line. And it comes after the company’s $26 billion agreement to buy rival TD Ameritrade Holding Corp.
Schwab incurred $17 million in pretax acquisition-related expenses in the quarter, which weighed on profit. Schwab reported earnings of 62 cents per share, compared with the average estimate of 64 cents.
Other highlights included fourth-quarter net interest revenue – the money Schwab makes from client cash and the largest source of profits – falling about 2%, and total quarterly revenue declining to $2.6 billion.
Elsewhere, Wells Fargo Advisors adds a $400 million Morgan Stanley veteran in Naples as an ex-Cetera advisor goes independent with LPL
According to a federal charges Bradley Heppner, 60, received more than $150 million in payments through funneling money from GWG Holdings to a shell company.
A $1B fund allegedly skimmed 30% off the top, then swapped cash for locked-up stock.
Insiders allegedly rewrote projections three times in four days.
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