Charles Schwab Corp. (SCHW) is a savings and loan holding company that operates in several areas of financial services through its subsidiary companies, including discount broker services, and asset management and advisory services. Its closest competitors in the discount brokerage sector include T. Rowe Price (TROW) and TD Ameritrade (AMTD). Schwab's asset management and advisory services pit it against larger firms in the sector such as Goldman Sachs (GS).
In its early days, Charles Schwab was aimed at discount broker services, and these remain a large part of the company's business. The company continues to offer a full array of brokerage services through its subsidiary, Charles Schwab & Co. Schwab now also manages its own line of mutual funds and exchange-traded funds, which are available to its clients alongside third-party offerings. These funds can be purchased through any of the account types Schwab offers, including full-feature brokerage accounts, individual retirement accounts (IRAs) or its 529 college savings accounts. Schwab serves customers over the phone, online or in the 345 branch offices that Schwab maintains. Since 2003, the company has operated Schwab Bank, a federal savings bank in Reno, Nevada.
Schwab has expanded aggressively into asset management and investment advisory services. As of 2017, these services were responsible for $3.4 billion of the company's $8.6 billion net revenue, with net interest accounting for another $4.6 billion. Its trading services constituted only $654 million for the year. For Q2 of 2018, Charles Schwab had a net revenue of $2.5 billion, boasting a 17% increase from last year's Q2 revenue.
The company's closest competitors in the discount brokerage sector are T. Rowe Price and TD Ameritrade. As of July 17, 2018, Schwab had a market capitalization of just under $70.7 billion, more than the combined market cap of its two closest discount brokerage competitors combined, since T. Rowe Price has a market cap of $29.1 billion and TD Ameritrade had a market cap of $31.3 billion.
Schwab also leads its competitors in total client assets under management (AUM). As of 2017, Schwab manages over $3 trillion in client assets, while T. Rowe Price has only $1.01 trillion in client assets and TD Ameritrade has $1 trillion in client assets.
Schwab's expansion into additional market sectors means it will face increasing competition from established larger players, including investment banking firms such as Goldman Sachs.
Goldman Sachs' market cap in July 17, 2018 was $84.2 billion, significantly more than Schwab's $70.4 billion. However, for Q2 2018 Goldman Sachs had just over $1.51 trillion in assets under management, roughly half of Schwab, which has $3.4 trillion. On the revenue side, Goldman received the largest portion of its Q2 revenue from its institutional client services, while Schwab's asset management and investment advisory services accounted for a large portion of the company's revenue.