- Charles Schwab added 142,000 brokerage accounts in October, a 31% surge from the previous month boosted by its elimination of trading fees.
- Analysts feared the firm’s slashed fees would cut into its margins, and the monthly jump in trading accounts counters some worries.
- The company reached 12.2 million total active brokerage accounts in October, and total client assets climbed to $US3.85 trillion, according to a Thursday press release.
- Watch Charles Schwab trade live here.
Charles Schwab added 142,000 brokerage accounts in October, a 31% surge from September boosted by its elimination of trading commission fees.
Schwab’s October 1 announcement of slashed trading fees led many analysts to expect greater pressure on the brokerage’s earnings. Commission fees represent a key revenue stream for the company, but the firm’s namesake founder said the change would bring in investors who wouldn’t have done business with Schwab otherwise.
“From day one, my passion has been to make investing easier and more affordable for everyone,” Chairman Charles Schwab said in an October 1 press release. He added that “eliminating commissions ensures my ultimate vision is realised – making investing accessible to all.”
Schwab’s total brokerage accounts rose to 12.2 million in October, and total client assets climbed to a record $US3.85 trillion, according to a Thursday morning press release. The brokerage’s stock traded as much as 0.93% higher Thursday morning.
Shares of competing brokerages tumbled as much as 20% following Schwab’s October announcement, and many firms later said they would also slash trading fees.
The brokerage also looks to court younger investors with fractional stock trading. Schwab will soon offer traders the ability to buy slivers of stocks, giving traders with limited capital the ability to invest in expensive stocks like Amazon and Berkshire Hathaway Class-A. The purchase and sale of fractional shares is one of several new investment programs to be added to Schwab’s core business, the founder told The Wall Street Journal on October 17.
Schwab traded at $US43.13 per share at 11:15 a.m. ET Thursday, up roughly 3.8% year-to-date.
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