By Andrew Welsch
Growth was the byword at Charles Schwab's investor day Thursday as CEO Rick Wurster and other top executives emphasized their plans to expand their reach with retail investors and independent financial advisors.
"We should be a much bigger business, helping far more clients than we do today," Wurster told the audience of Wall Street analysts and investors.
The Westlake, Texas-based company said it is expecting robust growth this year on strong investor engagement.
The company updated its 2026 guidance, saying it now anticipates full-year revenue to increase by 14% to 15% compared with the prior year. In January, Schwab had said it anticipated revenue to increase by 9.5% to 10.5%. Schwab credits the more upbeat outlook to strong client engagement.
Shares of Schwab were down 1.9% as of noon. Investors may have focused on the company's monthly activity report, which showed that core net new assets came in at $7.2 billion for April. That was up from $2.7 billion for the same period a year ago, but down from $79.7 billion for March. Clients tend to pull money from their accounts to pay taxes in April. The S&P 500 index was up 0.8% on Thursday.
Schwab said strong lending activity can support net interest margin expansion into the 3% to 3.1% range. Schwab previously said it anticipated full-year NIM ranging between 2.85% to 2.95%.
"There is very good momentum and we feel good about the financials," CFO Mike Verdeschi said. "Client engagement remains robust."
Upbeat outlook. Schwab executives also laid out ambitions to make greater use of artificial intelligence, drum up new business with individual investors and independent advisors, and expand its workplace business serving corporate stock and retirement plans.
Schwab is diversifying its revenue through increased lending to clients, wealth management services, and other initiatives, Verdeschi said. Fee and asset management revenue is growing and could become a larger percentage of overall revenue, he said.
Verdeschi added that the company remains focused on keeping an eye on expenses; Schwab's expense on client assets was 12 basis points for the last 12 months compared with 38 basis points for the national brokerage firms, also known as wirehouses.
AI threats. Although Schwab has posted strong earnings growth and net new assets for recent quarters, investors have been increasingly focused on potential artificial intelligence threats, specifically with regard to cash optimization tools that could put sweep cash accounts in the crosshairs. The worry is that AI cash tools could pressure Schwab's profit since low-interest sweep accounts are a key profit center and these tools could help clients automatically move money from low-paying to high-paying accounts or investment products.
Schwab currently pays 0.01% on uninvested cash in Schwab brokerage accounts. Money-market funds pay about 3.45%, according to the Crane 100 Money Fund Index as of May 13.
Wurster addressed the issue directly, arguing that the concern is overblown because Schwab's customers already have the ability to easily move idle dollars out of sweep accounts to higher-yielding options such as money-market funds, individual bonds, and certificates of deposit. "Not only do we make it easy, but we actively promote them," he said.
Write to Andrew Welsch at andrew.welsch@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 14, 2026 16:54 ET (20:54 GMT)
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