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SCHW · Forward model · Asset management and administration fees · Lending Gap 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 $107.69 all other verticals held in this portfolio case
Final-quarter revenue $2.57B 27% of company revenue
Explicit segment contribution $17.06B EBITDA less segment capex, before corporate items

The one penetration number Schwab put on its own slide rather than only saying out loud: 0.5% of clients use a lending product against a 4% industry average, defined in the slide footnote as bank loans as a percentage of total client assets at 31 December 2025. The evidence that it is already converting is disclosed and large - bank loans $50.4B to $67.0B (+33%), Pledged Asset Line balances $33.4B (+59%), margin receivables $83.4B to $165.1B (+98%). This case carries it as a NET INTEREST REVENUE-only tilt of +0.35% a quarter, which compounds to +7.2% on that line by 2031 Q2, and asks what the lending build alone is worth if every other line does exactly what the base case says. HOW IT IS IMPLEMENTED MATTERS: the engine has no scenario field for capacity additions, so this is a revenue tilt on the line rather than a larger balance sheet, and it lands between the +25% and +50% capacity-addition sensitivities the research computed ($107.19 and $110.08). Result: $107.69, essentially flat against the $108.05 tape (-0.3%), an implied 7.639x tangible book. It is deliberately a modest case: net interest revenue is 47.5% of revenue but the asset base compounds slowly, so a lending story cannot carry this stock on its own. WHAT IT DOES NOT ASSUME is any change in the net interest margin - the whole effect is volume, because the disclosed 100bp-plus spread on Pledged Asset Lines is close to the book average.

Asset management and administration fees

Basis quarter$1.82B
Final quarter$2.57B
Implied CAGR+7%
Final revenue mix27%

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: $2.57B (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 $1.86B
2026Q4E $1.90B
2027Q1E $1.93B
2027Q2E $1.97B
2027Q3E $2.01B
2027Q4E $2.05B
2028Q1E $2.08B
2028Q2E $2.12B
2028Q3E $2.16B
2028Q4E $2.20B
2029Q1E $2.24B
2029Q2E $2.27B
2029Q3E $2.31B
2029Q4E $2.35B
2030Q1E $2.39B
2030Q2E $2.42B
2030Q3E $2.46B
2030Q4E $2.50B
2031Q1E $2.54B
2031Q2E $2.57B

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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