Rick Wurster insists Schwab won't charge RIAs custody fees or roll out AI cash optimizers, but Compass Point analysts say a 'Costco'-style fee for agentic cash-sorting could replace lost sweep margins and unlock a $135 stock price

Charles Schwab Corp. has an untapped revenue source that may quell investors' concerns about its heavy reliance on interest spread margins on sweep cash – eager takers for a subscription service for an agentic tool that would reduce those spreads.

The Westlake, Texas, firm almost certainly has the market power to charge subscription fees to investors who want agentic cash sorting – if market forces make sorting a Schwab necessity, according to a new report from Compass Point. 

"We believe agentic trading can be a catalyst for reducing Schwab's cash sorting overhang," wrote Compass analysts Edward Engel and Michael Donovan in their research note, which set a $135 target price for Schwab shares that closed today at $106.35.

"While investors are concerned about AI disruption, these concerns underappreciate Schwab's optionality to launch agentic features for paid subscribers. 

"This opt-in capability could effectively replace interest income with recurring subscription fees while reducing Schwab's sensitivity to interest rates and cash sorting pressure," said the analysts in the research note."

Low offset

The “overhang” is the fact that Schwab shares trade at a price-to-earnings ratio of about 13X versus a more typical 20X. The heavy discount reflects fears that its revenues are vulnerable to agentic AI cash sorters becoming table stakes. 

Were that to happen, Schwab could be forced to follow, which would almost surely trim revenues and profit margins. As much as 49% of Schwab revenues derive from net interest income and it largely funds RIA custody for 15,000 firms using Schwab Advisor Services.

Projected cash-sorting revenue shrinkage would hypothetically be offset by a fee as low as six basis points, Engel further explained in an RIABiz interview.

 “Investors think there's nothing Schwab could do about [a tidal wave of cash sorting],” he says. “Even if they charge six basis points, that would cover all the overhang.”

Though the concept of the fee sounds like a bolt out of the blue, Engel says that three Schwab competitors (and 14 brokers overall) – most notably Robinhood – already charge these “Costco”-style subscription fees. 

They are Costco-like fees because you don't buy the service outright. They allow investors – or their RIAs – to access higher yields and the ‘membership’ right to buy services at a discount.

Lots of levers

Schwab CEO Rick Wurster has been adamant that Schwab has no need to provide AI cash sorting. He has been, and predeceding CEO Walt Bettinger was, equally vociferous about how they will never inflict a custody fee on their RIA clients.

Yet, it's also notable that Wurster recently said in no uncertain terms that he has the power to collect these kinds of revenues, Engel said.

A Morgan Stanley analyst who asked directly about it elicited a detailed response from Wurster that explained why Schwab could turn cash sorting into an “advisory offer.” 

“If monetization evolves away from cash sweep, what might future monetization and potential levers will look like at Schwab?” the analyst asked during the Q1 2026 earnings call in April.

“I think we have lots of levers to pursue,” Wurster replied. 

"We make money in lots of different ways, and whether it's our trading, our wealth, our lending, potentially fee-based solutions that leverage these AI – agentic AI capabilities, there's lots we can do. 

Bullish on growth

"If someone is going to want us to proactively move cash for them without them being involved in that movement, that is likely an advisory offer, and we charge for advisory offers and would for an agentic advisory offer. So, there are numerous ways.

“And listen, when I look at our company, and where we stand and the value that we have, the 47 million clients that we have on our platform, I'm incredibly bullish about our ability to grow our revenue in any environment. 

“We have built long-standing deep relationships with clients that highly value what we do. And just as we figured it out as commissions went down, we'll figure it out if the economics change in this environment,” he explained, according to a transcript. 

Going for gold

Wurster is sure to be reassured by the success of Robinhood Gold, which costs $5 per month (or $50 annually) to subscribe. The subscription offers perks and high-yield returns to Gold members. 

It's a big hit. Nearly 17% of Robinhood's funded customers use Robinhood Gold, about 4.8 million Gold subscribers out of 28.4 million total funded customers as of June 30.

Altruist, meanwhile, has a similar service, Altruist One, which costs 0.01% per household with a $1 monthly minimum per active account).

It provides a 1.8% boost on brokerage sweep cash and 0.25% on high-yield cash. It also automates tax-loss harvesting scans and assures zero transaction fees for equities, ETFs, and designated model portfolios.