Charles Schwab Corp. has reported significant January increases in total client assets and new brokerage accounts, the latest in a string of positive developments for both the company and the financial services industry as a whole.
According to its Monthly Market Activity Report, Schwab said on Monday, total client assets surged to $1.59 trillion last month, up 13.8% from a year earlier and 1.3% from December.
Net new assets brought to the company by new and existing customers totaled $6.4 billion, up from $6 billion in the same month last year — and the net figure included a scheduled $2.1 billion outflow related to a mutual fund clearing services client.
Excluding the scheduled outflow, Schwab garnered net new assets of more than $8.5 billion in January.
"Total client assets increased as a result of a couple of factors: positive returns in the equities markets and also healthy inflows of new client assets," said Schwab spokesman Greg Gable. "We think the latter reflects renewed confidence among investors, coupled with the strength of our business and brand."
Schwab ended the month with more than 8 million active client brokerage accounts, up from 7.7 million accounts in the year earlier but essentially flat from December. However, trading activity improved markedly; average daily trades by its brokerage clients increased to 512,000, up 10% from the year earlier and 28% from December.
The higher volume combined with mostly sustained growth throughout the equities market in the past year speaks, at least for now, to investors' renewed optimism about most industry sectors.
"Strong U.S. economic signals and solid earnings continue to provide a positive backdrop for stocks," Gable said. "We expect pullbacks if optimistic sentiment gets too elevated but remain optimistic about the stock market."
Last month, Schwab validated some of the optimism among its own investors when it reported that fourth-quarter sales rose 14% from the year earlier and net new assets grew by $11 billion, the most in almost two years.
Schwab also reported that exchange-traded fund assets held by the firm's clients soared 34% in 2010, compared to 28% growth for the ETF industry as a whole.
It now holds more than $111 billion in ETF assets.
"We continue to see signs of growing engagement among individual investors," Gable said. This increased engagement "is driven largely by signs of improvement in the economy and also what has been a significant trend upward in the equities market."
In the past year, the Dow Jones Industrial average rallied more than 18%, and the Nasdaq and the Standard & Poor's 500 index enjoyed increases of 26% and 20%, respectively.