Charles Schwab Corp. said net new assets from new and existing clients in November totaled $6.0 billion, but lower interest rates and slowing client trading volumes are expected to hurt fourth-quarter earnings.
The San Francisco company's announcement Monday was part of its market activity report for November, which also said that total client assets rose 26% from a year earlier and 4% from a month earlier, to $1.397 trillion through.
Client daily average trades fell 27% from a year earlier and 11% from a month earlier, to 297,100 as of Nov. 30.
"Our client metrics remain strong, and our business continues to grow," said Joe Martinetto, Schwab's chief financial officer. "Thus far in the fourth quarter, clients have brought us $15 billion in net new assets and opened 122,000 new brokerage accounts and 39,000 net new banking accounts, and total client assets reached $1.4 trillion by the end of November, up 26% from a year ago."
But persistent rate declines have pressured revenues during the fourth quarter. Martinetto said that management fee waivers on its proprietary money market mutual funds could increase by approximately $30 million over the third quarter total of $78 million. Moreover, client trading volumes have slowed in recent weeks.
Schwab now expects its fourth-quarter earnings per share to be 2 to 4 cents lower than what it posted for the third quarter.
But Martinetto said he remains optimistic. "With strong ongoing growth in our client base and continued signs of improvement in the economy and equity markets, we remain well positioned to generate increased revenues as soon as interest rates stabilize," he said.
