Charles Schwab reported stronger-than-expected earnings driven by a surge in retail trading activity, with the Westlake, Texas-based firm posting a record $11.9 million in daily average revenue from trades during the second quarter. That figure represented a 57% increase compared to the same period a year earlier, according to the company's earnings announcement Tuesday.

Trading revenue climbed 28% to $1.2 billion for the quarter, contributing to overall revenue growth of $7.07 billion, up 21% quarter-over-quarter. Chief Financial Officer Mike Verdeschi attributed the strong performance to heightened investor activity, while CEO Rick Wurster noted that SpaceX's massive initial public offering in June created one of the busiest days on record for the firm.

The advisor services division showed uneven performance across different metrics. Net new client asset gains in the advisor division jumped 89% compared to the second quarter of 2025, though they fell 7% when measured against the prior quarter. Schwab attributed the sequential decline to a seasonal tax effect.

Wurster emphasized the division's momentum during the earnings call, highlighting growth in both the Schwab Advisor Network and the firm's proprietary Schwab Wealth Advisory offering. "We're continuing to invest heavily in our Schwab Wealth Advisory offer, including in our tax, trust and estate capabilities, to make sure we can meet the needs of retail clients that want more help and guidance in their lives, and it is working," he said.

Looking ahead, Verdeschi said the firm expects its independent RIA business to drive net new asset growth by more than 5%, noting that growth had been about 6% or more in the last four quarters. "I think the capabilities we have are becoming even more and more challenging to match," he said on the call.

Executives also addressed analyst questions about the firm's approach to long-short investment strategies, which have become popular tax management tools for high-net-worth clients working with registered investment advisors. Earlier this year, Schwab imposed margin restrictions on the strategy, drawing criticism from some advisors who rely on the technique.

Verdeschi acknowledged that Schwab expects "continued demand" from RIAs to use the strategy and pledged ongoing support. However, he downplayed its financial significance, noting that it represents "a very small percentage of our economics. It's roughly 1% of our revenue."

Wurster suggested the market for long-short strategies has matured beyond the initial surge that occurred when Schwab was the sole provider offering access. "I think we're past that, and now in more of a stable growth environment," he said, though he maintained the strategy would remain important for advisors in coming years.

The CEO defended the strategy's utility for certain client situations, particularly those involving concentrated positions. "I think it's a strategy that makes a lot of sense for clients, particularly those that have sold a business or have a large and concentrated position that they want to diversify out of, being able to generate and harvest losses against that while still largely tracking an index is quite a powerful strategy," he said. "Over the coming five or 10 years, I expect this strategy will get bigger than it is today, and we want to find a way to support our clients."

Despite the positive earnings report, Schwab's stock declined slightly in afternoon trading following the announcement.