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SCHW · Forward model · Asset management and administration fees · Bull 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 $137.50 all other verticals held in this portfolio case
Final-quarter revenue $2.90B 29% of company revenue
Explicit segment contribution $18.93B EBITDA less segment capex, before corporate items

Management's own algorithm is granted. Client engagement holds rather than reverting - the guided pullback in daily average trades does not arrive - the lending and advice penetration gaps start closing, the mix shift out of a $131.1B held-to-maturity book yielding 1.73% keeps lifting the margin past the guided exit, and operating leverage stays at the roughly 800bp implied for 2026 rather than the 400bp assumed in January. Implemented as a +0.6% sequential growth tilt, a +1.5 point margin delta, a 20x P/E exit (15.263x on pre-tax) and an 8.75% cost of equity. WHAT THIS CASE DOES NOT REACH is a permanent 44% return on a growing tangible book: it gets Schwab to 9.754x reported tangible book, which is 6.80x on the AOCI-adjusted basis - a high multiple on a franchise earning today's returns, not a re-rating onto a different business. Result: $137.50 a share, +27.25%.

Asset management and administration fees

Basis quarter$1.82B
Final quarter$2.90B
Implied CAGR+10%
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: $2.90B (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 $1.87B
2026Q4E $1.92B
2027Q1E $1.97B
2027Q2E $2.02B
2027Q3E $2.07B
2027Q4E $2.12B
2028Q1E $2.17B
2028Q2E $2.23B
2028Q3E $2.28B
2028Q4E $2.33B
2029Q1E $2.39B
2029Q2E $2.44B
2029Q3E $2.50B
2029Q4E $2.55B
2030Q1E $2.61B
2030Q2E $2.67B
2030Q3E $2.72B
2030Q4E $2.78B
2031Q1E $2.84B
2031Q2E $2.90B

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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