The Charles Schwab Corp. has quietly overtaken Bank of America’s wealth management units to become the biggest U.S. retail investment firm as ranked by client assets.
The San Francisco-based discount firm and RIA custodian earlier this year told analysts that it had claimed the top spot after surpassing Bank of America in the first quarter.
With second-quarter results released last week, Schwab continued to build on its lead.
Schwab had $2.543 trillion in client assets at the end of June, up $19 billion from the first quarter. Bank of America’s retail units, which include Merrill Lynch and U.S. Trust, reported $2.522 trillion, up $12 billion.
Assets under management are an important metric for financial firms, as client assets generate fee and commission revenue.
“We use the [asset] comparison to help people who follow our company get a clear sense of the scale we have and growth we’ve experienced,” said Schwab spokesman Greg Gable.
Bank of America spokesman Matt Card declined to comment.
Schwab has been a market leader in the do-it-yourself discount segment, and has added a number of advised offerings in recent years for investors who need more help and direction.
With its top spot in the RIA custody business, Schwab has also benefitted from the trend toward independence by financial advisors.
Schwab had $1.137 trillion in RIA assets as of June, and $1.407 trillion in its discount unit.
Among the advice channels, wirehouses held 47 percent of industry assets in 2007, according to Cerulli Associates, but by the end of 2014 that share had dropped to 41 percent. Over the same period, the RIA channel’s market shared jumped from nine percent to 13 percent.
From 2007 to 2014, Schwab saw overall asset growth of 55.5 percent, while Merrill Lynch’s assets, not including U.S. Trust, grew 16.2 percent.
Bank of America bought U.S. Trust from Schwab in late 2006. Two years later during the financial crisis, it bought Merrill.