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SCHW · Forward model · Asset management and administration fees · Bear case

What has to happen in Asset management and administration fees

Model as of

This page changes Asset management and administration fees inside the complete SCHW model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

SCHW forward model
Horizon
Consolidated fair value $65.41 all other verticals held in this portfolio case
Final-quarter revenue $2.10B 29% of company revenue
Explicit segment contribution $14.08B EBITDA less segment capex, before corporate items

The June quarter was the peak: its record 11.9 million daily average trades ran 44% above the 8.3 million of 2025 Q4. Trading reverts toward that 2025 Q4 level rather than holding even the guided 10.6 million; the net interest margin stops at the guided 3.25%-3.30% exit and then gives it back as the forward curve's cuts arrive and deposit betas stop being zero (Schwab's own sensitivity table puts each 25bp move in the Fed funds target at roughly $250M-$300M of annualized net interest revenue, at a zero deposit beta); and the market re-rates Schwab toward a money-centre-bank multiple. Implemented as a -1.0% sequential growth tilt, a -3.0 point margin delta, a 13x P/E exit (9.921x on pre-tax) and a 10.5% cost of equity. WHAT THIS CASE DOES NOT ASSUME is a capital event: the $20.0B buyback authorisation is not withdrawn and the 8.7% consolidated Tier 1 Leverage Ratio is not in question. Result: $65.41 a share, -39.46%, an implied 4.640x tangible book - almost exactly the 4.952x that a 30% through-cycle ROTCE justifies at a 9.25% cost of equity, so the bear is not an outlier. It is what Schwab is worth if the 44% ROTCE is a cycle rather than a level.

Asset management and administration fees

Basis quarter$1.82B
Final quarter$2.10B
Implied CAGR+3%
Final revenue mix29%

Fees on $4,652,135M of average fee-bearing client assets - mutual funds, ETFs, collective trust funds and alternatives at $2,737,218M, managed investing solutions at $922,971M and other balance-based fees at $991,946M - billed at a blended 0.0392% a quarter, 0.157% annualised. 25.8% of the basis quarter and the most mechanical line in the model: revenue is a fee rate multiplied by an asset base, and Schwab publishes both legs, by category, every quarter. The tension is between a base compounding on market appreciation and net new assets and a fee rate that has fallen 4.47% year on year as the mix moves toward cheaper index and advisory products.

Last four quarters
2025 Q3 $1.67B Reported
2025 Q4 $1.73B Reported
2026 Q1 $1.76B Reported
2026 Q2 $1.82B Reported
Schwab money market fundsSchwab equity and bond funds, ETFs and CTFsMutual Fund OneSource and other no-transaction-fee fundsOther third-party mutual funds, ETFs and alternativesManaged investing solutions (fee-based and non-fee-based)Other balance-based feesOther
Capacity energised 4652135000000 $M of average fee-bearing client assets at the basis quarter $2,737,218M funds and ETFs + $922,971M managed solutions + $991,946M other balance-based fees.
Capacity added 120000000000 $M of average fee-bearing client assets/qtr changing 0.0% per quarter $120B a quarter, well below the +$207B four-quarter average: ~10%/yr falling to ~6%, no melt-up.
Utilisation 100% gliding toward 100% 100%: the whole fee-bearing base is billed. No utilisation concept applies to an asset-based fee.
Revenue per $M of average fee-bearing client assets $0/qtr drifting −0.6% per quarter $1,825M / $4,652,135M = 0.0392293% a quarter, 0.157% annualised, including the $28M Other line.
Asset management and administration fees

Latest: $2.10B (2031Q2E)

Period Value
2021Q4 $1.11B
2022Q1 $1.07B
2022Q2 $1.05B
2022Q3 $1.05B
2022Q4 $1.05B
2023Q1 $1.12B
2023Q2 $1.17B
2023Q3 $1.22B
2023Q4 $1.24B
2024Q1 $1.35B
2024Q2 $1.38B
2024Q3 $1.48B
2024Q4 $1.51B
2025Q1 $1.53B
2025Q2 $1.57B
2025Q3 $1.67B
2025Q4 $1.73B
2026Q1 $1.76B
2026Q2 $1.82B
2026Q3E $1.84B
2026Q4E $1.86B
2027Q1E $1.88B
2027Q2E $1.89B
2027Q3E $1.91B
2027Q4E $1.93B
2028Q1E $1.94B
2028Q2E $1.96B
2028Q3E $1.97B
2028Q4E $1.99B
2029Q1E $2.00B
2029Q2E $2.01B
2029Q3E $2.03B
2029Q4E $2.04B
2030Q1E $2.05B
2030Q2E $2.06B
2030Q3E $2.07B
2030Q4E $2.09B
2031Q1E $2.10B
2031Q2E $2.10B

Assumptions & reasoning

  • A CAPACITY driver because the release publishes the earning base AND the fee for each category every quarter in the Asset Management and Administration Fees Information table. Neither leg is inferred and neither is a segment split Schwab does not report.
  • ASEASONAL, and the cleanest fail in the set: centred-moving-average factors of [1.0034, 0.9955, 1.0078, 0.9933], a signal of 0.0145 against a worst window-to-window spread of 0.0403 - a 0.36:1 ratio. A balance-based fee has no calendar.
  • The same double-counting warning applies as on net interest revenue: the seasonality field is left absent because a capacity driver reads the basis quarter's own levels, and the engine would deseasonalise them a second time.
  • The 51.88% consolidated pre-tax margin sits here too. Asset-gathering economics are almost certainly better than the firm average and trading's almost certainly worse, but Schwab discloses neither, and inventing the difference is exactly the failure this model refuses.
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