Charles Schwab Corp. executives on Friday offered some details on the company’s blow-out quarter for new asset flows.
Schwab enjoyed $38.9 billion in net new assets from its retail business and its RIA custody unit during the first quarter. As part of that, Schwab’s RIA custody unit, Advisors Services, “had a near-record quarter [for new assets] going back to the inception of the advisor business,” Bettinger said.
RIAs added $24.9 billion in new assets during the quarter.
Net flows are a key metric for brokerage firms and asset managers.
Schwab’s February action to cut most transactions to $4.95 per trade from $8.95 was not the driving force in attracting assets, Bettinger said.
“We had strong growth in the quarter before the pricing moves,” Bettinger said. “We don’t believe pricing is the exclusive factor in our organic growth. It’s the totality of things we’ve been doing the last 40 years.”
The lower pricing is not specifically designed to compete with other online discounters, company executives stressed. In fact, Bettinger said, net transfers into and out of other discount firms are minimal. Most of Schwab’s asset gains continue to come from the major banks and wirehouses.
People who focus on the price war among discounters “are missing the real story of what’s occurring” with Schwab, Bettinger said.
Other hot spots included Schwab’s proprietary ETF business, which grew 60 percent year over year, to nearly $70 billion in assets at the end of the first quarter, and Schwab’s robo platform, Intelligent Portfolios, which ended the quarter at $16 billion in assets, up from an average of $5 billion in assets a year ago.
“In March alone, we captured over $1 billion in net new flows into that [robo] program,” Bettinger said.