stockrowWhat it does
The Charles Schwab Corporation is a savings and loan holding company that provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services through its subsidiaries. Its principal operating businesses include broker-dealer Charles Schwab & Co., Inc., Charles Schwab Bank, and Charles Schwab Investment Management.
Schwab serves two groups. Investor Services provides individual investors with brokerage accounts, trading, advice, banking and trust services; it also serves employers and their employees through retirement-plan, stock-plan and corporate-brokerage services. Advisor Services provides independent registered investment advisors, retirement advisors and recordkeepers with custody, trading, banking, trust and operating-support services for their clients.
For an individual investor, the platform can combine a brokerage account with trading in equities, fixed income, options, futures and forex; mutual funds and ETFs; managed portfolios; alternative investments; cash products; lending; and trust services. Clients can use digital, telephone and branch channels. Advisors using Schwab as custodian can open and service accounts, move money, trade, access records and connect to third-party portfolio-management, planning and client-relationship systems.
Management said it closed the Forge transaction and is bringing private-market capabilities to clients. Management also said it is developing and testing tokenization and wallet capabilities, and is piloting crypto-transfer capability.
Schwab had approximately 33,000 full-time-equivalent employees at December 31, 2025.
How it makes money
Schwab earns revenue from client assets, client cash balances, trading activity and banking relationships. Its two reportable segments are Investor Services and Advisor Services. Revenue is assigned to the segment with primary responsibility for serving the client, while both segments use shared brokerage, banking and asset-management infrastructure.
Net interest revenue is a central source of revenue. Schwab invests uninvested client cash held on its balance sheet, primarily in fixed-income securities, margin loans and bank loans, and earns the difference between interest received and interest paid on funding. Client lending includes margin loans, mortgages, home-equity lines and pledged asset lines.
Asset-management and administration fees come principally from proprietary money-market funds, proprietary and third-party mutual funds and ETFs, and managed-investing solutions. Trading revenue includes commissions on certain trades, payments for order flow from execution venues, and principal transactions that support fixed-income client trading. Bank deposit account fees arise mainly from recordkeeping and support services associated with brokerage cash swept to TD Depository Institutions under the insured-deposit-account arrangement.
In FY2025, Investor Services revenue was $19.0 billion and Advisor Services revenue was $4.9 billion. Mutual funds, ETFs and CTFs generated $3.7 billion of revenue, while managed investing solutions generated $2.4 billion. Order flow revenue was $1.9 billion and commissions were $1.8 billion. Management said the latest quarter’s revenue growth included higher net interest revenue, asset-management and administration fees, trading revenue, bank deposit account fees and other revenue.
Recurring economics are tied especially to client asset balances, cash balances, advisory relationships, custody and banking activity. Trading-related revenue varies with trading volume and the mix of products traded.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Mutual funds, ETFs, and CTFs | $3.7 billion | 30.1% | 13.8% |
| Managed investing solutions | $2.4 billion | 20.0% | 14.6% |
| Order flow revenue | $1.9 billion | 15.9% | 30.7% |
| Commissions | $1.8 billion | 14.8% | 12.9% |
| Bank deposit account fees | $977.0 million | 8.03% | 34.0% |
| Other | $767.0 million | 6.30% | 1.86% |
| Other | $401.0 million | 6.30% | 1.86% |
| Principal transactions | $194.0 million | 1.59% | −1.02% |
Customers and how it sells
Investor Services serves individual investors across levels of wealth and investing experience, from newer self-directed investors to clients with more complex wealth-management needs. It also serves businesses, retirement-plan sponsors, plan participants, stock-plan administrators and brokerage clients requiring compliance-monitoring support.
Advisor Services serves independent registered investment advisors, independent retirement advisors and recordkeepers. Schwab provides these firms with custody, trading, banking, trust and support services, while the advisors serve their end clients. Schwab does not charge the advisor or end client a custody fee in this custodial role; it earns revenue associated with underlying client assets, predominantly through net interest revenue and asset-management and administration fees.
The company offers service through online, mobile, telephone and branch channels. Individual clients can also work with financial consultants, active-trader financial consultants, wealth consultants and dedicated teams for certain private-client offerings. Advisor clients use a website and proprietary tools for daily account administration, trading and service activities, with access to third-party software integrations.
Schwab operates principally in the United States, while also providing access to U.S. markets for non-U.S. clients, multicurrency trading for U.S.-based investors and foreign-securities trading. It is subject to oversight in countries where it operates outside the United States. Management sizes the U.S. retail market at $37.00 trillion.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Investor Services | $19.0 billion | 79.4% | 22.1% |
| Advisor Services | $4.9 billion | 20.6% | 21.6% |
Suppliers and costs
Schwab’s operating model relies on broker-dealer, bank and asset-management subsidiaries, technology systems, branches, service teams and third-party financial and software relationships. Its deposit-account-fee revenue is tied mainly to its agreement with TD Bank USA, National Association and TD Bank, National Association, together the TD Depository Institutions. Those institutions receive swept cash from eligible brokerage accounts, while Schwab provides recordkeeping and support services.
The largest operating-cost categories include compensation and benefits, professional services, occupancy and equipment, technology equipment and software, depreciation and amortization, regulatory fees and assessments, and industry fees. In 2025, compensation and benefits expense increased with merit increases, incentive compensation and employee-related costs. Professional-services expense rose with business growth and increased use of technology and other professional services.
Management said quarterly expenses also reflected client engagement across trading, wealth and banking, the first full quarter of Forge, and investments in organic growth, products, client experience, scale, efficiency and artificial intelligence.
- Revenue$23.9B
- Selling, general and administrative−$9.8B
- Other operating costs−$1.4B
- Operating income$12.7B
Competitive position
Schwab competes for individual investors with brokerage, wealth-management and asset-management firms, banks, trust companies, financial-technology companies and retirement-service providers. In Advisor Services, it competes with institutional custodians, wirehouses, regional and independent broker-dealers, fintech custodians, banks and trust companies. No specific competing company is named in the available business descriptions.
The company identifies scale and operating efficiency as competitive advantages. Its shared infrastructure is intended to spread operating costs and new investments across a large client base, which supports pricing across client sizes and channels. Schwab also combines brokerage with bank, wealth and asset-management services, which it says can meet more client needs and create diversified revenue streams.
Management said the company is investing in branches, financial consultants, RIA relationship managers, AI capabilities, wealth offerings, lending and trading. It also said the platform offers individuals and RIAs trading, banking, advice, research, education and service through multiple channels.
Our reading: Scale and shared infrastructure are a meaningful moat because they support a cost advantage across brokerage, custody, banking and asset-management activities. [item1]
Our reading: The combination of custody, trading, advice and banking can deepen relationships, but clients can use more than one financial-services provider, so this moat depends on continued service and product execution. [item1; call_prepared]
Our reading: Brand, service culture and multichannel delivery matter in a trust-based industry, but they face ongoing competition from brokers, banks, custodians and fintech companies. [item1]
Growth opportunities
Schwab’s growth plan centers on bringing in more clients and assets, then expanding each client relationship into advice, banking, lending, trading, asset management, retirement and workplace services. The company says trusted relationships can translate into more assets from new and existing clients, revenue growth and earnings growth when combined with expense discipline and capital management.
Management said the company is investing in branches, financial consultants, wealth advisors, RIA relationship managers, marketing, workplace capabilities and artificial intelligence. It reported new-account and core-net-new-asset growth in the first half of 2026, alongside growth in managed-investing flows and lending balances.
Advice is a stated expansion area. Management said only 5.00% of retail households use a fee-based advice solution, while it sees client demand for advice. The company is investing in Schwab Wealth Advisory and in tax, trust and estate capabilities. Management said it plans to expand tax capabilities and introduce tax planning through wealth.com.
Banking and lending are further growth areas. Management said lending-product usage is 0.50% of clients, versus an industry average of 4%, and it is adding structured-asset lending that enables clients to borrow against private investments and private shares. It is also integrating Forge’s private-market capabilities, expanding crypto capabilities and building infrastructure for potential tokenized-securities activity.
The company sizes the U.S. retail market at $37.00 trillion. Management expects its growth to be supported by client consolidation of investing, wealth and banking relationships.
- $18.5BFY2021
- $20.8BFY2022
- $18.8BFY2023
- $19.6BFY2024
- $23.9BFY2025
Structural risks
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Economic and market conditions can reduce client assets, cash balances, trading activity and demand for advisory, lending and other services. Interest rates, equity valuations and volatility also affect net interest revenue, client cash allocation and the value of client assets.
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Liquidity pressure could impair Schwab’s ability to meet obligations, increase funding costs and reduce client confidence. Its liquidity needs include broker-dealer client activity, bank capital needs, corporate debt and dividend obligations.
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Credit losses can arise from margin, options, futures, pledged-asset and securities-lending exposures, as well as mortgage loans and home-equity lines. Concentration in a single issuer, industry, instrument or geographic region can increase losses.
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Security breaches involving Schwab, clients or third parties could create liability and reputational damage. The company also handles digital assets, where lost, stolen, compromised or destroyed private keys can result in permanent loss without a practical recovery method.
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Extensive banking, securities and consumer-protection regulation can result in penalties or limits on business activities. Capital, liquidity, client-protection, market-conduct and financial-crime requirements affect operations and can change.
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Strategic transactions, including the Forge acquisition and integration, could adversely affect financial position or fail to produce the company’s intended capabilities or timing.
Bottom line
Our reading
Our reading: Schwab is an integrated investing platform whose revenue combines interest earned on client-related balances and lending with fees tied to assets, advice, custody, trading and deposit-account services. [item1]
Our reading: Its scale, shared infrastructure and bank-brokerage-asset-management combination support its operating model, while its results remain exposed to markets, interest rates, client activity, credit, liquidity, technology security and regulation. [item1; item1a; item7]
Our reading: Management’s growth agenda depends on converting a large self-directed and advisor-served base into broader advice, lending, private-market, tax and digital-asset relationships. [call_prepared; facts]