Charles Schwab enjoyed a record rate of asset gathering last year, company executives said Tuesday in an update for analysts, and that stemmed from a variety of factors, including its lower transaction costs and the access the company gave customers to advice.
The firm attracted a record $198.6 billion in net new assets last year, up from $126 billion in 2016 and $135 billion in 2015.
About half of that, some $100 billion in net new assets, came through Schwab Advisor Services, the company’s RIA custody business.
“We’ve never eclipsed $70 billion before,” said Bernie Clark, executive vice president of Advisor Services.
The average RIA recruit had $154 million in assets last year, up from $95 million in 2016. And Schwab landed 227 advisor teams in 2017, up from 167 in 2016, the biggest source from independent broker-dealers.
“We did twice as many deals in the over-$300 million space … as any prior year,” Clark said.
With $1.55 trillion in assets, Advisor Services commands about a 30 percent market share, Clark said.
Total assets at Schwab reached a record $3.36 trillion as of the end of the year.
The firm last month reported fourth-quarter revenue of $8.6 billion and net income of $2.4 billion, both records.
Chief executive Walt Bettinger said the move to lower fees and the offer of a satisfaction guarantee a year ago sparked a sharp increase in net account transfers. The firms’ transfer-of-accounts ratio (assets coming in divided by assets going out) went from around 1.6 in 2016 to 2.3 in the fourth quarter of 2017. Flows came from all channels.