'Schwabitrade' RIA assets leap $107 billion in NNA to $3.75 trillion in first half of 2023, and just 20% of TD Ameritrade RIAs have yet to 'credentialize'

The RIA assets of TD Ameritrade Institutional and Schwab Advisor Services grew an incredible $514 billion for the 12 months ended June 30 – buoyed by 160 breakaway brokers.

‘Schwabitrade’ RIA assets ballooned to $3.748 trillion as of June 30, up from $3.233 trillion on June 30, last year, bolstered by $231 billion in net new assets, according to Schwab's quarterly financials. 

The Schwab RIA asset haul includes inflows from 160 breakaway brokers with an average book of $90 million, CEO Walt Bettinger revealed on the firm's analyst call Tuesday (July 18). The 160 practices equal an estimated $14.4 billion.

That's hardly chump change, says Louis Diamond, president of Diamond Consultants.

“On its face, recruiting 160 teams with an average of $90 million AUM seems pretty remarkable. 

"Like with most recruiting efforts, my guess is they had some substantial wins that drive the average and many smaller additions," he adds. 

Great sign

Altruist CEO Jason Wenk says 160 teams didn't seem “particularly high.” He believes his firm continues to onboard the most firms annually, although he declined to say how many firms or the amount of assets gathered.

“For the past three years at Altruist, I believe the data (which can be a bit murky in our industry) would show that Altruist has onboarded more firms each year than any other custodian.

But we have a pretty diverse group of signups, many breakaways, but also a fair number of existing firms, adding a new custodian, as well as startup firms that are launching with no existing clients,” he says.

Schwab's breakaway haul is a great sign for both Schwab and the RIA industry.

"…This clearly proves out the breakaway movement is alive and well from both wirehouses and IBDs, and of course, that Schwab in the RIA segment remains a market leader," Diamond says. 

Credentialing advisors

Schwab President Rick Wurster also said that TD Ameritrade advisors are mostly ready for the conversion over Labor Day weekend.

About 80% of TD Ameritrade advisors have been “credentialed” for Schwab's products and offerings and more than 5,000 TD Ameritrade advisory firms have attended at least one educational seminar about Schwab's platform and technology.

With several weeks yet to go before D-Day on conversion, Wenk says the 80% is probably a healthy sign for Schwab.

 “I think 80% credentialed will likely rise quickly over the next few weeks, so I don't think it's particularly low. If it's not up to 95% by mid-August, that would be a bit concerning.”