Charles Schwab reported a 21% increase in revenue for the second quarter, reaching $7.07 billion, surpassing analyst expectations of $6.89 billion. Adjusted earnings per share were $1.62, exceeding the consensus estimate of $1.55. The company's trading revenue rose 28% year over year to $1.22 billion, driven by strong client trading activity, while net interest revenue increased by 19% to $3.36 billion. The net interest margin expanded to 3.00%, up from 2.66% a year earlier.
Client Assets and New Accounts
Total client assets at Schwab climbed 22% year over year to $13.08 trillion, bolstered by net inflows of nearly $120 billion in core new assets, which rose 49% compared to the previous year. The firm reported that 1.4 million new brokerage accounts were opened in the quarter, bringing the total to over 39.8 million. President and CEO Rick Wurster noted that investor engagement remained strong, with average daily trading volume hitting 11.9 million.
Competitive Landscape for RIAs
During the earnings call, Wurster addressed concerns from independent registered investment advisors (RIAs) about competition with Schwab's in-house advisory services. He indicated that there is ample opportunity for both Schwab's internal advisors and external RIAs, stating,
Just 5% of Schwab retail households are in a fee-based advice solution.
He highlighted that 31% of Schwab clients expressed willingness to pay for financial advice, suggesting significant growth potential in this area. Schwab's managed accounts saw inflows increase by 50% year over year to $41 billion in the first half of 2026.
Related coverage: AMC Reports Record Q2 Revenue of $1.59 Billion, Ripple’s Prime Brokerage Revenue Triples Amid Market Changes.
The strong earnings and asset growth at Charles Schwab could positively influence investor sentiment in the financial services sector, particularly for brokerage firms and asset managers. Stocks in these sectors may see increased trading activity as investors react to Schwab's performance. Watch for further developments in the financial advisory market as Schwab continues to expand its services and client base.