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Continued growth in client trading and fees helped drive profits at Charles Schwab Corp. to higher-than-expected levels for the first quarter, the company said today. Meanwhile, assets in its RIA unit, Schwab Advisor Services, reached a record $688.6 billion, up 10 percent year over year. Total assets at the nation’s largest discount broker rose to $1.65 trillion, also a record.

The financials painted a picture of stronger investor confidence. Chairman Charles Schwab said investors with the company have reduced their share of assets held there in cash to levels not seen since before the 2008 financial crisis. “Although still choppy, the environment is improving and investors are actively engaged with us across all our businesses,” Schwab said in a statement.

Analyst Michael Wong at Morningstar said the company posted a smaller increase in margin loans than he had expected. “Volatility was definitely reflected in the quarter. We saw pretty high trading volumes on a per-brokerage account basis. We started seeing that among almost all the wealth managers” starting last quarter, he said. But he also noted continued movement of investors back into the market, a movement that started in December. “That was a very positive sign for us, retail investors going up the risk curve, getting more confident in the stock market,” he said.

He also sees higher assets under management and “pretty strong inflows” into Schwab Advisor Services. Although net new assets last quarter dropped 3 percent year over year, to $14.2 billion, that level ranks at the high end over the last three years, Wong said, and it was “fantastic” compared to the $8 billion in net new assets in the summer doldrums of last year’s third quarter. One possible reason for the dip was investors pulling money out to pay taxes, he said; “Definitely they could have more capital gains to pay.”

Clients daily average trades of 472,500 were up 14 percent year over year and 19 percent from the fourth quarter of 2010. Asset-based trades were up 7 percent and 24 percent respectively. Asset management and administration fees rose 20 percent year over year, to $502 million.

Schwab said it remains on track to acquire optionsXpress Holdings in the third quarter. The company announced last month it would buy the options brokerage for $1 billion in stock, a deal that will provide it with more presence in a growing market. The company also said in February it would open a series of Schwab branches run by independent financial advisors later this year.

Schwab had first-quarter profit of $243 million, or 20 cents a share, on net revenues of $1.21 billion. That was above the 19 cents a share estimate in an analyst’s survey by Thomson Reuters. A year earlier the company had profit of just $6 million on net revenues of 978 million. Shares of both Schwab and competitor TD Ameritrade Holding Corp., which reports quarterly earnings on Monday, rose 2 percent.