Schwab Tags Wealth Advice as Key Growth Area
Charles Schwab will continue to push into the $37 trillion wealth advice market for growth after seeing its Schwab Wealth Advisory net flows grow 55% year-over-year in the third quarter of 2026, executives said on an earnings call Thursday.
Schwab said its wealth advice division holds about 2% of the $37 trillion advice market, leaving plenty of room for growth, with 37% of current clients reporting a “willingness to pay” for advice.
“Client demand for advice is accelerating,” CEO Rick Wurster said. “Managed investing net flows reached another record of $24 billion in the third quarter, up 22% from last year. Within that total, Schwab wealth advisory net flows increased 55% as we continue to delight these clients who have given us a client promoter score of 84 in the third quarter.”
In a slideshow presentation, the firm highlighted continued investment in its wealth hubs/branches, discretionary portfolios, enhanced tax, trust and estate offerings, and “AI-powered planning.”
“Relationships continue to matter,” Wurster said. “That is why we are investing in both people and technology, so we can continue building, deepening and retaining those trusted relationships now and for the decades to come.”
The firm also highlighted a continued focus on its RIA custody and advisor services during the presentation.
Wurster noted that Schwab was the first RIA custodian included in Claude for Financial Advisors, developed by the AI firm Anthropic. The AI tool offers services including notetaking assistance, alternative investment briefings, compliance and policy reviews, and estate and tax briefings.
One item that may get advisors’ attention came at the end of the call, when Wurster said the firm is working on a proprietary long-short investment strategy that Schwab will update on soon, without providing exact timing. That offering would be welcome by some RIAs, as Schwab and Fidelity Investments have recently limited the use of long-short investment strategies to manage the high demand.
“We will be able to run that product in a very efficient way from a balance sheet and operational standpoint that will help us sustain an ability to deliver long-short capabilities to our clients,” he said.
Wealth Focus
The wealth advice focus backs up recent moves by the Westlake, Texas-based firm.
Last year, Schwab announced it was growing its brick-and-mortar presence to provide wealth services to retail clients, including 16 new branches in the U.S., with 25 existing branches being expanded or relocated. The move came with a hiring expansion of up to 400 branch-related employees.
This year, Schwab also made further moves to reduce its outsourcing of client referrals to RIAs, presumably to offer advice directly to those clients. In August, the firm told RIAs it was raising the minimum account size for clients to be referred to $5 million at the beginning of 2027, up from $2 million. In addition, Schwab raised the assets-under-management threshold for firms entering the Schwab Advisor Network to at least $500 million, up from $250 million.
The Schwab Referral Network has been a traditional organic growth funnel for RIAs, but had not been updated since 2002, according to prior comments from Schwab executives. Schwab, which does not provide the exact count of RIAs in the program, had recently estimated the group at 100 to 150 RIAs.
Schwab’s push into advice continues to raise questions about its relationship with RIAs as the country’s largest custodian.
Tim Welch, a consultant who is the founder and CEO of Nexus Strategy, has been tracking RIA custodian moves to reduce services and compete directly in the wealth advice space.
In an August white paper, he wrote of Schwab’s moves that, “In roughly 18 months, the bar for a client to even qualify for a Schwab referral has risen tenfold. This is not a program being fine-tuned. It is a program being deliberately shrunk, in a hurry, while Schwab builds a competing offer of its own.”
On the call, Wurster reiterated Schwab’s commitment to RIAs. The firm reported that it beat its custodial peers by a wide margin, at least in terms of the volume of RIAs joining its channel.
According to Schwab, it added 1,001 new RIAs to its custody platform in Q3, with its nearest peers adding 349, 339, 202, and 79, respectively (without naming those competitors).
The firm also noted that of those joiners, the largest cohort had AUM of above $5 billion, at 36%. Another 13% had AUM between $1 billion and $5 billion, with the remainder under $1 billion.
“We have built our advisor business around helping independent advisors grow, compete and succeed,” Wurster said, noting there are currently more than 16,000 firms on its platform representing $5.8 trillion in assets.
Overall, Schwab beat analyst expectations for adjusted earnings in the third quarter, but fell short of revenue estimates, according to a roundup by Seeking Alpha.
Schwab reported Q3 adjusted earnings per share of $1.69, above the $1.66 analyst consensus and higher than $1.31 in last year’s Q3.
It also reported net revenue of $7.17 billion, missing Seeking Alpha’s analyst consensus of $7.19 billion, but above the $7.07 billion it reported in the third quarter of 2025.
