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Schwab's Total Client Assets for October 2015 Improve

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The Charles Schwab CorporationSCHW released its monthly activity report for Oct 2015. The company recorded net new assets (bought by existing as well as new clients) of $10.5 billion, up 33% from the prior-year month but down 11% from the preceding month.

Further, total client assets summed $2.54 trillion, up 4% from Oct 2014 and 5% from Sep 2015. Additionally, the client assets, receiving ongoing advisory services, totaled $1.27 trillion for the month, increasing 4% year over year and 5% from the prior month.

As of Oct 2015-end, Schwab's average interest-earning assets amounted to $165.4 billion, increasing 17% from Oct 2014 and 2% from Sep 2015.

Schwab opened 88,000 new brokerage accounts, up 16% from the Oct 2014 level and 10% from Sep 2015. Further, the company's active brokerage accounts totaled 9.7 million, increasing 4% from the prior-year month and almost at par with the previous month.

Clients' banking accounts totaled 1.03 million, growing 4% year over year and almost stable with the preceding month. Also, Schwab reported 1.5 million corporate retirement plan participants for Oct 2015, up 6% year over year and 1% from the prior month.

Net sell activity in the Mutual Fund for Oct 2015 was $910 million, compared with net buy activity of $358 million recorded in Oct 2014 and net sell activity of $4,336 million in Sep 2015. Net buy activity in the Exchange Traded Funds was reported at $2,464 million, reflecting a decline of 13% year over year but surging 51% from the prior-month tally.

We believe Schwab is well positioned to benefit from improving broader trends in the investment brokerage industry as well as diversified revenue streams, enhanced equity markets and management's efforts to boost the client base in advisory solutions. However, despite several initiatives to reduce dependency on interest rates, the company's financials will likely remain under pressure due to a persistent low interest rate environment.

Currently, Schwab carries a Zacks Rank #3 (Hold).

Among other investment brokers, TD Ameritrade Holding Corp.'s AMTD average client trades per day came in at 437,000, down 12% year over year and 2% from the prior month. As of Oct 31, 2015, TD Ameritrade reported $703.4 billion in total client assets, up 6% year over year and 5% from the last month.

For Interactive Brokers Group, Inc. IBKR , total client Daily Average Revenue Trades ("DARTs") was 655,000, decreasing 4% from Oct 2014 and 1% from Sep 2015 levels. Additionally, E*TRADE Financial Corporation's ETFC DARTs summed 144,607, decreasing 18% year over year but up 4% from the prior month.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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