Charles Schwab said it's experiencing temporarily lower net flows of client money as the brokerage sees attrition of some retail and advisory clients' assets while it
The company has stepped back from certain custodial relationships that Ameritrade had offered to institutional clients, Charles Schwab Chief Financial Officer Peter Crawford said in a statement Monday.
The client attrition is in line with Schwab's
Schwab's attrition amounts to about 4% of Ameritrade revenue prior to the deal, or around 1% of combined total client assets as of the end of last year, Crawford said. The Westlake, Texas-based company repeated its expectation that client deposits will begin growing again later this year.
Schwab has faced pressure from investors in recent months, particularly after the March collapse of several midsize U.S. lenders focused attention on unrealized losses from securities held on bank balance sheets.
The Federal Reserve's interest rate hikes over the past year have pressured the bank's banking arm, a pivotal source of revenue, as some clients moved their money from the bank to other investment products, including money-market funds, in a process known as "cash sorting."
