Ameritrade

Sep 15, 2023

Justin Sullivan/Getty Images News Charles Schwab (NYSE: SCHW ) core net new assets of $4.9B in August decelerated from $13.7B in July, reflecting the expected attrition related to its acquisition of Ameritrade, the brokerage said Friday. Schwab ( SCHW ) shares fell 3.5% in premarket trading. "As expected, NNA has been temporarily impacted by asset attrition from clients originating at Ameritrade," said Schwab CFO Peter Crawford. "Currently, attrition levels are measurably better than what we communicated at the time we announced the acquisition in November 2019." Most of the deal-related outflows are attributable to Ameritrade RIA (registered investment advisor) clients, including a number of relationships that didn't meet Schwab's ( SCHW ) criteria for an ongoing service relationship, he said. The company has converted $1.3T in client assets from over 7,000 Registered Investment Advisory firms and 3.6M Retail accounts from Ameritrade. Excluding Ameritrade brokerage-originated clients, Schwab's ( SCHW ) core NNA equaled $28.1B in August. The firm has also been affected by clients moving cash from their accounts to higher yielding options, a process known as cash-sorting. Realignment activity in the first half of September "has resulted in essentially neutral flows – or inflows generally equal to outflows," Crawford said. Total client assets slipped to $8.09T in August, down 2% from July but up 14% from August 2022.