The bad news: Charles Schwab officials say this year's third quarter was marked by market volatility, with its retail clients' feelings of financial well-being declining, hitting its lowest level in two years, according to a client survey.
The good news: Schwab officials also reported in its third-quarter survey release Friday that its clients continue to engage in the market and remain focused on their long-term investment plans. Schwab said its quarterly survey also found that investors are optimistic about opportunities in the current market, with an estimated 45% of those surveyed saying now is a good time to invest. An estimated six in ten, or 64%, say they would sooner invest a windfall than save it for a rainy day.
Conducted in September, Schwab's quarterly investor confidence survey queried more than 1,000 retail clients. Online interviews were conducted Sept. 8 to 23 by Synovate Inc.
Schwab's survey shows that financial gray clouds are still clearly overhead, with 26% of its clients queried saying they feel financially "worse off" than this time last year compared with 23% indicating that they feel better off. During the second quarter, 44% felt better off than a year ago.Walt Bettinger, Charles Schwab president and chief executive officer, says Schwab's clients are "concerned and uncomfortable'" with market and economic uncertainties, but aren't overacting in their investment decisions.
Schwab says its clients maintained their cash holdings in the quarter at close to pre-crisis levels and continued to be net purchasers of securities. The survey reveals that only 19% of clients moved assets into cash in the third quarter and only 17% said they moved to the sidelines in response to recent market volatility.
Bettinger says that while there are still a group of investors who'd prefer to go it alone, client interest in receiving guidance is on the rise. At the end of September, enrollments in its advisory solutions stood at a record 2.4 million accounts, up 153,000 from September 2010. For the same period, core net new assets totaled $17.6 billion up 21% from last year, and clients opened 191,000 new brokerage accounts. Client assets totaled $1.58 trillion at month end September.