The Charles Schwab Corporation ($SCHW)

Welcome to Institutional Investor Day 2026. To begin, please welcome Jeff Edwards.

Thank you so much. Thank you so much. The warm welcome was very much unexpected from the crowd this early in the morning. But we appreciate everyone joining us on the webcast and especially those here in the room that have made the trip to Westlake. It's very exciting to have everyone here for the 2026 Edition of Schwab's Institutional Investor Day. Obviously, I'm a little biased, but I think we have one of and probably actually, the best story and financial services. So it's an exciting day to be able to share that with you. You saw the strong momentum that we've had in the marketplace, and that was further evidenced this morning with our April SMART report that I see a couple of folks here in the front have been quickly pecking away and putting those into the model. So it's exciting to see that continue into the year. And probably just as important, looking out there through the window, the weather looks great. The team has been working hard with the weather guys there to make sure that we don't have any more of those tornado warnings like we had in 2024. So, so far, all systems go. And luckily, you're not stuck with me very much longer. We have a great lineup of speakers here today. They're going to talk about all the exciting things that are happening here at Schwab and how much opportunity we see to keep shaping the future of the industry and helping clients in RIAs. Let's talk about the agenda here for a moment. We're going to get Rick up here in just a moment to help kick off the day and provide the strategic vision and outlook for the future. Jon and Jonathan will come up and talk about the Advisory Services and Retail businesses. James Kostulias will then jump in and talk about Trader. Adele Taylor will talk about Workplace for a little bit, and then Stacy will bring the energy and insights around client acquisition and marketing right before lunch. One quick reminder about lunch. Hopefully, a couple of you had a chance to stop by some of the AI demo booths. We set those 6 up today to provide an opportunity to speak with some of the folks in the business and bring to life some of the examples of the exciting things that we're bringing both to employees and clients on the AI front. After lunch, we're going to shift our focus to products and solutions with Neesha and Andrew clicking in across wealth, banking and the whole host of items that we're working with our clients with to drive growth and deepen those relationships. Afterwards, Dennis is going to come up and talk about all things, technology, operations and data. And finally, Mike is going to bring us home to help talk about how we're connecting all those client-driven exciting opportunities into the financial story that is driving results for Schwab and our stockholders. In terms of Q&A, which I know is everybody's favorite part and why we're all here, the approach should be very similar to prior events. We'll have in-person mic runners, Kate and Jared, on both sides. So if you want to ask a question in the room, please raise your hand and wait for a mic to come. It is a question approach per the usual. If there are any follow-ups, we'll try to get back to you if we can. For those joining on the webcast, please submit via the console. The instructions should be there. Lauren will help collect those, and we will do our best to insert those alongside the questions here in the room that there will be a priority here in Westlake. As always, I think you guys know how to reach Lauren and myself and the IR team. We're happy to handle any follow-up questions. If not, our information is there on the slide. And we all know what this means my time here is done. The [ omnipresent ] wall of words that remind us that outcomes may differ from expectations. So please stay in touch with our disclosures. And with that, let's get the day started. [Presentation]

Thank you, and thanks so much for being here. We are so grateful for all of you in the room who made the trip here to Westlake and everyone online for spending the next 6 hours with us. We think we have a great story to tell, and we're excited to tell it. I'm going to spend my time today talking about both how we're leading today and what we're doing to define tomorrow. Since we are going to be together for 6 hours, I wanted to start by taking a moment to share with you what I think some of the key takeaways from the day are. Number one, we are a growth company that is growing across all fronts. Number two, we have a mission, a purpose and a value proposition that stands apart and is winning in the marketplace today. Number three, we have a clear strategy for the future to evolve to meet our clients' needs and to win in the marketplace. And fourth, we believe we are well positioned to drive earnings growth, not just this year, not just next year, but through the cycle with a financial recipe that has worked for years, and we believe will continue to. So let me dive -- I should mention a fifth takeaway, by the way, which wasn't on the slide, which is every quarter, Mike and I have the opportunity to spend time with you and we love that opportunity. Today, you'll get a more of a unique opportunity, which is to see the strength of the team. And I hope you walk away as impressed and with as much confidence in the team as I have on a day-to-day basis. Let me start with leading today. And I want to take you back 50 years in time to when Chuck Schwab started our company. It was a time in which only the wealthy could invest in markets. Only the wealthy could benefit from the power of investing in compounding. And it's been our mission, our purpose for the last 50 years to make investing more accessible to bring the cost down, to make it more understandable, to get people invested earlier in their life so that they can realize the power of being an owner, the power of compounding. That is what we stand for. And that mission and that purpose sets us apart, particularly in a world where so many others are sending a different message about transacting, about gambling. We have always stood for what is right for the client, what's going to put more money in their pockets. And that's a big part of the reason why we've been successful. And we stand at $12.6 trillion of assets today, 47 million client accounts. We grew that at 1.3 million accounts in the first quarter. If we can keep that kind of growth up for the next 5, 10 years, will be 70 million accounts, 100 million accounts. And that's core to our mission because that means there's a lot more Americans in our country and more people all over the world who will have access to the power of being an owner, access to the power of compounding. That's what we are here for. That's our mission. We will be and need to be a much bigger company for the benefit of all of the people in our country for what we do and how we do it. And while we're a big company with $12.6 trillion of assets, we are operating with the purpose, the ambition and the speed of a startup. I'd highlight the highlights of the last 2 years since we were together in this room. We've enhanced our services and experiences. We've brought the best of people and technology to our clients. We've added financial consultants. We've added wealth advisers. And at the same time, we've launched AI to support our clients and to support our client-facing professionals and how they efficiently answer our client questions. We've improved many of our experiences, including taking our pledged asset line experience from what used to be 40 days down to 1 day and often is done in only minutes. It is the industry-leading experience for a pledged asset line. We've leaned into building out our products and solutions to meet the segmented needs of our clients. We've launched alternatives and other products and services for our higher net worth clients. We've added to our wealth advisory capabilities, and you'll hear a lot more about that from Neesha later. We continue to add to our leadership in trading, which is a really important segment of clients for us and a really important business. We've added 24/5 trading, but we've also added lots of product capabilities, lots of service and advice capabilities around our trading platform. We continue to invest in our Advisor business. Lots of things that we didn't put on the page that aren't exciting to talk about in this room, but make a huge difference for our clients. And that's the experiences they have every day on schwab.com that makes their lives easier. We are operating with a record client easy score for our advisers, and that's because of the investments we've made the last few years in making it easy. We've also added capabilities that they love, such as our long/short -- support of the long/short strategies and INTF. We're adding for our advisers a structured asset lending program, which will open our lending up to more forms of collateral, something that our advisers have been asking for, for a long time, and that differentiates us because we can bring the power of our bank to the adviser market, something many of our competitors cannot do in the same way that we can. And we're meeting the needs of our different retail segments, as you'll hear from Jonathan in just a little bit, whether it's our teen investor account or our crypto launch, which happened this week to clients for the very first time, we are meeting the needs of our clients through our products and solutions, expanding and evolving what we're doing for clients and delighting them along the way. To move at the pace we've been moving at as a big company, we are both building our capabilities, buying them and partnering where it makes sense. We bought Forge to start a journey like we've been on the last 50 years in public investing to democratize access to private investing, and we couldn't be more excited about that. We made an investment in Wealth.com, which is an AI-backed capability that allows clients to plan their taxes to engage in a trust and estate plan, and take it all the way through documentation, all fueled by AI in an experience that is far easier and more streamlined than it used to be. And the early experience with it so far is very promising. Clients love it. And so we are making progress strategy to meet our clients' need and feel great about how we've moved the business. That is helping our growth, and we are growing on all fronts. We had a record first quarter, $158 billion of NNA in the first quarter, an all-time high when you exclude the onetime mutual fund clearing outflow that was planned for. We have talked in many -- for many quarters about driving solutions growth, about deepening our relationships with clients, and we continue to see accelerated growth quarter after quarter in our wealth business and in our lending business. And then finally, that's translating to attractive economics, as Mike will cover in a lot more detail later on in the day. Our ability to succeed and to drive that growth and to be a growth company is founded on what we stand for. And it all starts with our purpose, which is to enhance our clients' financial life to champion their goals, to help them be owners to get -- to start saving to get invested and to live their best financial life. And that's backed by our trusted brand, our best-in-class value, the blending of people and technology across an omnichannel experience that sets us apart from our peers, and product breadth that allows us to be a one-stop shop and make it easy for clients. For 50 years, our company has stood for trust. It stood for doing the right thing for clients. It stood for getting more money into our clients' pockets and helping them grow their wealth, and that's not going to change. We offer the best-in-class value in the industry. With an 11 basis point expense on client assets, we are far less expensive to run our business than any one of our competitors. That allows us to operate with a 50% margin and put more money in our clients' pockets because we're offering them incredible value, and that's really hard for anyone in our industry to match. Likewise, our omnichannel experience sets us apart from everyone. We are just -- we're not just an app. We're an experience. We have award-winning, as you can see from Forbes, the best customer service in the industry. Not only that, if you look at our client phone satisfaction scores, they are at an all-time high. Our digital platforms just won the U.S. News and World Report, Best Investing Platform for the fourth year in a row. So clients love engaging on our digital platforms. And at the same time, we know they love having a relationship. And our people are making a huge difference. And we can see that in a bunch of different ways. We know clients love engaging with people because we can see the growth of our RIAs, where there's personalized relationships. We can see the accelerated growth that we earn from clients when we have a dedicated financial consultant relationship. 2.5x the NNA that we earn when we have that dedicated relationship. And we earn 10 points higher Client Promoter Scores when they have -- when we have a dedicated relationship. So technology for sure, is important today, and it's going to be even more important in the future. But we believe it's the power of people and technology that sets us apart that continues to win today, and we believe it will continue to in the future. And you'll see this little AI note on the side here. AI will become a new interaction channel for us. Just like people come to mobile, web or phone lines or walk into one of our branches to conduct activity to find out information. AI will be the next way for our clients to do that. It's not going to change our strategy in any way. It's going to be a new interaction channel that is going to allow clients to interact with us in a new way. It will change our strategy around growth, but the interaction channel is another platform for our clients to engage. We have product breadth that can't be matched and that is a huge advantage. Clients can come to us for all of these reasons. They don't just have to come to us because we're the best trading platform. They can come to us because we're the best trading platform, and we have incredible advice for self-directed investors. They can come to us because for our RIAs because we have great product choice, ETFs, mutual funds, alternatives, digital assets for our retail clients, a bank that they can -- so that we can help them with both sides of their balance sheet. Our product breadth gives us a unique advantage. And it's not just the product list, it's the way we deliver it to clients. I had a client reach out to me this week. It's been a client for a few months, and they had joined us from a large competitor. And they sent me a note to tell me how much they had enjoyed the experience because they felt for the first time in their Financial services experience. We were putting them at the front of every recommendation we were making, every suggestion that we had, every point of expertise that we offered as opposed to trying to do what was best for the firm. And they wanted me to know how much they appreciated that objectivity. So it's not just our product breadth, it's the way we deliver it. It's all about putting the client at the front. Now there's been an AI narrative in the market that I think has been a significant overhang for our stock and detached our stock from our fundamentals. First, there was a narrative around how a tax planning software or AI tax planning from a relatively small competitor of ours was going to somehow dis-intermediate our business. More recently, it's been about how our cash strategy is not going to work in the world of AI. And I wanted to take a few minutes since I have all of you here today to hit that one on the head because I think it's incredibly misfounded. I want to start with explaining why clients come to Schwab. They come to us to invest and trade. Because of that, we take their cash and we default it into safe, highly liquid cash, waiting for them to put their investments to work to make the decisions that they need to make, to move the money around that they need to move but we default it to liquid and safe cash. And then we make it incredibly easy to find other options. It's a click of a button, a couple of clicks of a button, and you can find purchased money funds with among the lowest fees in the industry and the highest yields. You can buy individual bonds for $1 a bond, which I believe is the best deal on individual bonds in the world. You can find a deep and competitive CD marketplace. And not only do we make it easy, we actively promote them through marketing, through when you log on, oftentimes, the very first thing you see is get more for your cash at Schwab, get more on your cash at Schwab. As a result of the fact that we make it easy and we actively promote it, our clients move a lot of their cash to other yield securities. We have $700 million -- $1 billion of client cash and purchased money funds. We have $800 billion of cash in individual bonds. So clients are clearly finding their way to other options because we make it easy and we have compelling options. We are not a bank that traps their cash in a checking account. And I can see why if you're one of those banks, maybe you need to think about a cash optimizer because it's really hard to move your money around from checking to higher-yielding options. That is fundamentally not the case at Schwab. We couldn't make it easier. We couldn't promote cash options more. We have $3 trillion of cash that moves around every month. Every month, $3 trillion moving to buy and sell securities to pay bills, to wire money in or out of the firm. to pay advisory fees, to post collateral against short positions, all kinds of uses for cash every month that adds up to $3 trillion a month. To put the $400 billion of cash that is in sweep in perspective today, that is half a week of client money movement. We simply do not believe that there is lots of cash just sitting around oblivious to the concept that when you come to Schwab, you can invest in all of these capabilities. Second point I want to make is that we have no plans to have a cash optimizer. And I want to talk about why. Number one, cash optimizers have been around for a long period of time. I think MaxMyInterest has been around since 2013 or something like that. We compete against all kinds of cash strategies today. I travel all over around the country every year. I go and talk to hundreds of RIAs. I go to every one of our service centers and spend time with our client-facing professionals. In the last couple of years, I've been to 100 of our branches. I hold focus groups directly with our retail clients. In every one of these conversations, I ask a really simple question. How else could we be helping you in your financial life? What could we do to make the experience at Schwab better? In the thousands of conversations I've had, not one, not one time have I ever heard, I really need a cash optimizer at Schwab. So the idea that we're going to create one when we have all these other priorities and ways that we can help clients and when our cash strategy and our overall value proposition is clearly working is completely misfounded. Our value proposition is winning and it's winning at historic levels, and I want to touch on that for a moment. We are #1 in total client assets. Our NNA growth is accelerating. Our TOA ratio is 1.7. And I want to put that in historical terms for you. Since Schwab and Ameritrade have come together, our TOA ratio has never been higher. I then went and asked the team, I said, well, let's go -- can we go back 10 years and look at just Schwab originated accounts? What's our TOA? And our TOA for Schwab originated accounts in the last 10 years has never been higher than it is today. Our value proposition is winning in the marketplace. Our clients are deepening their relationships with us, which is voting with their feet that they want to do more business with us every day, whether it's consuming more advice through our wealth business or borrowing through our bank. Our client Promoter Scores, which we use as a measure of client satisfaction, have never been higher. Our client Easy Scores, which we care about deeply because we think eases wins in our industry, have also never been higher than they are today. The final point I would make is I believe our level of innovation and the pace at which we're moving have never been faster. We've eliminated half of our committees. We've stood up a product group within legal to shepherd things through faster. We've moved our digital teams inside our businesses so that the businesses and technology can collaborate more closely and get things to market faster. We're using AI to develop and to develop quickly. We are moving at a rapid pace so that we can evolve and meet the needs of our clients. Before we pivot to the future, I just want to highlight the landscape in which we operate today. We are fortunate that we participate in the 2 fastest-growing segments of the financial services landscape. And in addition to that, meaningfully outgrow those 2 fast-growing areas of the financial services landscape. And you can see our market share today, 14% roughly, which is a strong market share and yet at the same time, scratching the surface. Think about the power of what we do. We put the client at the front of everything we do and everything we stand for. People in our country would be far better off if they saved, invested and did so early. And no company has more to offer as people in our country want to take that journey than Charles Schwab. So it's incumbent upon us to take this market share represented in the lower left corner of that box and expand it dramatically. We should be a much bigger business helping far more clients than we are today. So let me now touch on our road map for doing so. It starts with setting the stage for what we think of as the 4 big themes that will evolve in the coming years in our industry. First is the next generation of investors are highly engaged and they're operating in different ways than the prior generation, and we need to be there for them. Number two, we believe there is a bull market for convenience, not just in our industry, but in every industry. And we need to make sure we're incredibly easy to do business with. There are asset classes and products that are emerging that we need to have for clients. And finally, we do think artificial intelligence will have a meaningful impact on our industry and is an incredible opportunity for us to grow our business and to serve our clients more efficiently than we do today. There we go. So let me talk about the future, and it all starts with living out our mission. As I shared earlier, 50 years ago, we started with the purpose of introducing people to investing, democratizing access to investing, getting more people invested, helping them save and grow their wealth and benefit from ownership and compounding. That remains our purpose today, and we aspire to be the primary retail wealth management provider for investors and traders of any size in all the ways they invest and trade. In a world of convenience, being able to deliver a compelling one-stop shopping experience is critical to our future, and no firm is better positioned for that than we are. Second, we have a leadership position in the RIA space today as a custodian and are providing a breadth of services and capabilities to RIAs. We have an opportunity to expand on that to create an RIA ecosystem, which allows the RIAs to focus more on growing their business, spending time with clients and at the same time, is a path to monetization for that business. Third, while we're #1 in retail, we're #1 in the Advisor business, we are not in that position in workplace. We need to be far bigger in workplace than we are today. For many Americans, it's the first place they save and invest and get introduced to Financial services. We need to be there in a bigger way, and we're going to make the investments to do that. Our strategy is going to be -- continue to be founded on seeing through clients' eyes, doing what's right for clients, and we'll do that via 4 focus areas. Number one, we need to grow the firm. And to me, that means 2 equally important things. Number one, we need to grow NNA and do so at an accelerated rate. Number two, we need to deepen clients because in a world where they want ease, handling more of their financial life benefits them and it benefits us. Second, we need to continue to drive scale and efficiency. to leverage our advantage on expense on client assets, to leverage the technology that we can create because of our size and to reinvest from our efficiency back into our growth so that we can serve more clients and live out our purpose and mission. Third, and something we don't talk about enough and sometimes can go overlooked is the brilliant basics. The everyday things are so critical, safety and security, the ease of interactions. We don't put out press releases but the enhancement -- on things like this, but the enhancements we make to our mobile app every day make a huge difference for our clients. Our client Promoter Scores among our Ameritrade clients have risen 14 percentage points because we've made behind the scenes a lot of enhancements to the mobile experience that they really enjoy and use. Likewise, for advisers, we made a lot of enhancements to the experience, and our Easy scores are at an all-time high. So when we talk about those things, it doesn't draw a lot of clicks, but it's incredibly important to our business and remains a key focus area. And our people. One of the things I love about Schwab is we are a mission-based company. And if you walk around this campus or speak to our 33,000 people, they are here because they care deeply about helping our clients live their best financial life. Our people help set us apart every single day. We believe in the power of people and technology, and it's winning, as you can see in all the numbers I shared earlier. So let me step through a couple of these in just a touch more detail. So again, on growth, 2 equally important levers, growing new assets and deepening relationships. And deepening relationships is of utmost importance when you have a business with $12.6 trillion and 47 million clients. Some of the things we're focused on as it relates to growth, we've got to meet the segmented needs of our clients, and you'll hear that throughout the day from our various presenters, whether it's our ultra-high net worth clients in retail, our traders, and you'll hear from James and for our RIAs advisers of every size and type, we've got to be there to meet their specific needs. Second, we've got to continue to bring the best of people and technology because even in a world of AI, we believe people and technology will win. We've got to win on AI. And we will grow our business in AI in a couple of ways. Number one, given that mission and that purpose and the aspiration we have to be a far bigger company and serve many more people, increasingly, many will come through a large language model to learn about financial services. And we need to make sure we show up when they do. And you'll hear, I imagine, from Stacy on that today. We also can use AI to leverage how we engage clients. We have benefited from personalized relationships, and we've seen NNA grow faster as a result. But we've never served the 1 million or under client with a personalized relationship or have it in mass. I believe with some of the AI capabilities that we'll have and that Jonathan will demo today via a video and that you will see at the back of the room, we'll be able to provide insights to our less -- to our clients with less than 1 million that will provide similar levels of personalization over time that we've been able to deliver via an FC. And I'm excited for the growth that should come from that. As I talked about earlier, we've got to expand our workplace business, broaden our RIA business to improve our monetization. There's lots we're doing to broaden our products and services to meet the segmented needs of our clients. And we've got to put at the front ease and convenience, the little things, the call they have, the mobile experience they have, it's all got to be easy. And finally, I think it's important for us to recognize that we provide tremendous value to our clients. And there is an ecosystem around Schwab of people that gather economics. We need to make sure we capture our fair share. And I think there's many ways we can do that in the coming years. Second part of growth is deepening relationships, and our focus here will be lending. Every time I go to impact, I hear from advisers, I'd love for you to do more lending to my clients, so I don't need to introduce a bank. One of the things they asked for was to be able to lend against different forms of collateral. Well, we just rolled that out to a beginning group of RIAs, and we'll roll it out to all RIAs over time. We are finding ways to meet their needs here at Schwab. We need to grow our Advisor business, and you'll hear more about that from Neesha but I couldn't be more excited about the opportunity to serve our Schwab clients have been trust us that believe in us to serve them with our wealth advice, and we have a growing opportunity to do so. We've got incredible opportunities to meet the product and advice needs of our clients. Our clients come to us all the time and say, I've got a concentrated position. I've got a big gain. I want to hedge my portfolio. All kinds of things clients are looking for where we can provide customization, personalization, meet their need and monetize our business. And finally, trading is incredibly important to our business. We have, as you can see, trading engagement continues to pick up, and it's a really important business for us. On scale and efficiency, we need to drive scale and efficiency that we can invest back in the client experience. We're doing that via a number of ways, and you're going to hear from Dennis on that later, driving big technology transformation. We are moving -- creating a global capability center in India and using AI to power our productivity. As I mentioned earlier, the basics are critical to our success, and we're going to continue to invest in the ease of our experience, in the resiliency that we offer and in our omnichannel experience. And then finally, we will continue to make people a key part of what we deliver. We are a mission-based company. We've got 33,000 people all in this together, fighting every day to give our best to the clients to bring the best of Schwab to each client so they can live their best financial life. And we're winning on the people front as well. We just completed our engagement score, and our engagement is at an all-time high here at Schwab. So with that, let me wrap up so that I can get to questions. Number one, we are a growth company that is delivering growth on all fronts. Number two, our client offering is winning in the marketplace. And number three, we are built for what is next, and we're moving with a purpose and ambition and a pace that we don't think can be matched. And finally, as you'll hear from Mike later on in the day, we believe we are very well positioned for earnings growth, not just this year and next year, but through the cycle with our financial formula. And with that, I would love to hear from you and your questions. We got a mic runner that will.

Alexander Blostein from Goldman Sachs. I wanted to start with your point on cash optimizer. Obviously, it's an important topic. I hear you have no plans, and I also hear you that you're not hearing from clients that they want it. But if the competitive landscape changes and this becomes more broadly available to clients through your other competitors, what would your response be then? And how would you think about potentially changing some of the components of the business model to respond to that?

Yes. Thanks, Alex. I think it's important to recognize that we already compete against cash optimizers in different ways. One of our biggest competitors sweeps into higher-yielding cash, others sweep into money funds. We already face this competitive dynamic. And as I shared with you earlier, we're winning in a big way. So we're not worried about the threat from an AI cash optimizer. And so we think our business strategy is built for what's coming next.

Steven Chubak from Wolfe Research. So you spoke about the need to drive better growth in the Workplace channel. You do have a very formidable competitor in the space, and it's translating into much better NNA growth outcomes. I was hoping you could speak to how you would differentiate your value prop in the marketplace and what that could mean for long-term NNA growth and what that incremental contribution could become?

Yes. Thanks, Steven, and thanks for being here. I think that we can be a winner in the Workplace segment for a few reasons. Number one, wellness in financial planning, financial capabilities is becoming increasingly important. No one can do that like we can. Number two, very few competitors in the workplace channel can bring both stock plan and retirement plan together in one place. And for the employer, that creates ease, and so we need to lean into that. Number three, we win on service. We win on service today even against the #1 competitor. I think we've won the Plan Sponsor Service Award like 9 years in a row. We are winning on service. There are some areas we need to get stronger at to really be a formidable competitor. The biggest one being the modernization of our retirement plan technology capabilities, which will add features for both plan sponsors and the end participant that will make us competitive with anyone. And when we have that, our ability to offer wellness, our ability to have stock plan and retirement plan bundled together, our ability to offer the award-winning service that we have that's differentiated from our big competitors is going to allow us to win in the marketplace. In terms of specific NNA targets, I think it's too soon to tell. But I do believe that creating a big workplace business will be a great top-of-the-funnel capability for us and really important to accelerating our NNA growth beyond the levels that we're at today. And we've seen it already recently and our Stock Plan business has been a big part of our NNA growth the past few years. And we look forward to the day when it's see an even much bigger part. And like some or maybe one of our competitors, we know when we open the door that year, we're going to get a tremendous amount of inflows from the rollovers associated with those accounts. So we're focused on that. We're going to invest, and we think we've got a great way to win in the future.

Brennan Hawken, BMO. Would love to hear more about lending. You spoke to how the feedback from advisers is great that you're there for them. But do you think you need -- do you have all the capabilities you need? Do you need to continue to roll out and enhance? Where is the awareness? Where is the penetration? Where do you want to get it to? How do we -- how should we think about it in the next few years?

Yes. Thanks for the question, Brennan, and thanks for being here. The first thing I'd say is lending is strategically important in the sense that it allows us to win more in the marketplace, particularly in both channels but let me speak to advisers for a minute. The fact that our biggest competitor in the Advisor channel doesn't have a bank, creates a big advantage for us. So the more and more we lend, the better. Second, you put yourself in the adviser's shoes. They don't want to introduce a big bank to the relationship who may want to get into the wealth side of that client's pocket and the RIA doesn't want that. And so they want us to deliver it to them and not have to introduce a bank. And so again, it's strategically important for that reason. I think through the pledged asset line that we rolled out to clients and now the structured asset line, which opens up lending to more forms of collateral, private shares, alternatives, restricted stock, things along those lines, -- that's a big win for our advisers and something they've asked for, for years. I think between those 2, between our mortgage capabilities, we have now met the core need. We've got to drive more awareness, more understanding of how easy it is, how compelling our rates are. I think that alone will drive a lot of growth. And then I do think there are some other areas where we can add to our banking capabilities. But I think with what we have today, we have a very clear road map for the future to be able to grow in a meaningful way.

Ben Budish from Barclays. Rick, you talked quite a bit about AI this morning and on the last earnings call. Curious how you think about it translating to the financial formula. Are you -- are we getting to the point where you think AI can help accelerate top-of-funnel acquisition, help drive greater operating leverage, drive down further the cost to serve? How are you thinking about that over the next several years in terms of where you can implement to either accelerate, drive more operating leverage, that kind of thing?

Yes. Thanks for the question, Ben. I think it will grow both top line, not probably next year and maybe not even the next -- the year after that. But I think in the coming 5 years, we'll see more growth from AI because we'll be able to work with the LLMs to drive more clients to Schwab. And again, we'll cover that in more detail later. We'll be able to, with our existing clients, drive more personalized insights that allow them to benefit from more of the capabilities that we have at Schwab that will allow us to deepen relationships and likely with some of those smaller clients, get them to consolidate assets from other places because we're offering those personalized insights that they wouldn't have. I think it's going to grow top line. And without a doubt, we are seeing meaningful AI efficiencies. Now that's not translating. You can see our headcount, our headcount is growing. And you might say, well, all this AI you've launched and all the usage and Dennis will share, I think a stat that shows just how much we're using AI now versus the past. And our headcount is not dropping. You may wonder why. But what's happening is we are seeing headcount go down in certain areas but we're hiring so much to drive our growth with financial consultants. We're hiring a lot to deepen relationships with the growth of our wealth business. We're hiring wealth advisers like crazy because we're getting so much flows through the door that that's masking all the savings that we're seeing from AI. So I think AI will drive both top line and bottom line. I think it's going to be a real accelerant to our strategy.

David Smith from Truist Securities. Rick, as AI makes it easier to scale and service clients, how does that inform your thinking as to the clients that you can serve at Schwab versus referring to RIAs? And just more broadly, how does that change your thinking about any symbiosis between Investor Services and Advisor Services?

Well, I think there's huge symbiosis between them. I think that -- the big one to me comes back to the purpose and the mission that Chuck started the firm with. We built this company to make investors better off in their financial life. And if a client works with an adviser, a trusted adviser that's a fiduciary, we feel confident that they're going to be better off. So it's very mission-based and same with retail investors that they're working with us. We do aspire for our retail investors. The investors that have been with us for a long time. They've got $6.5-ish trillion with us today. Many of them have been with us for years. They've built up a trusted relationship with a financial consultant. They get to the point in their life where they have a meaningful amount of wealth and perhaps where they don't want to spend as much time thinking about their financial life and their financial life has become more complex. In those cases, we want to be able to serve them with our proprietary wealth capabilities, in addition to all the managed investing strategies we have and our Schwab Advisor Network but we believe the go-to for existing Schwab retail clients should be our Schwab Wealth Advisory program. It grew in the first quarter 90% year-over-year. And by the way, the year-over-year comp was on a quarter that was a record. Neesha will go into a lot more detail, and she's done a phenomenal job leading the area and driving the growth. The investments are working, and we think that strategy will really pay off in the long run.

We're going to go ahead and take a question from the web console. We have Bill Katz from TD Cowen. He'd like you to talk a little bit about any opportunities outside of the U.S.

Yes. International, I think, in the long run, will be a compelling business. And I'll go back to where I started. Our goal is to get millions and millions of more people invested in the world. People are better off when they invest. Their financial lives are enhanced. They grow their wealth. They understand the power of ownership and compounding. There are many places in the world that would benefit from that at Schwab. And in the future, as we make the investments to make our international capabilities stronger, I can't wait for the day where that becomes a meaningful contributor to our growth. In the near term, it is a nice growth opportunity for us, and we're seeing with our trading capabilities and the investors around the world that want to invest in the U.S., good growth. We've added more relationships to our international clients. That's helping. We've added also more advice capabilities, and we're seeing growth there. So we're seeing both good growth in the short run and at the same time, over the long run, potentially more transformative opportunities.

And I think we have time for one more question.

Devin Ryan, Citizens. Question just about distribution and opportunities. You talked about there being more areas to maybe monetize what you build, $12.6 trillion in client assets over 40 million accounts. So huge distribution value. The ETF change or the potential fee there seems like one opportunity. But can you maybe expand upon some of the other areas that might be opportunities in the future and how material those could be given what you have built?

Yes. I think distribution and product is clearly one. I think the work we do with RIAs, there's many places where we're doing work that we -- that there's value we could add and potentially be compensated for. I think in our trading area is an area where there potentially could be opportunities to monetize. So if you look at every aspect of our business, we think there are possible ways to monetize. And not -- by the way, we're not getting -- we're not going to go into a world where we're nickel and diming clients all over the place and adding fees and things like that. But there are places where there are people operating on our platform that are earning incredible margins, and we're bringing the client to them or we're doing the hard work, and we're not capturing our fair share. So this is not about squeezing our clients but I think there's an opportunity for us to be front-footed with some of the folks that provide a lot of value on our platform to our clients, but where we could perhaps be capturing more of the value. And with that, listen, again, I want to just say how much I appreciate you all being here. We -- it means a lot to us that you flew into Texas. You're going to spend the next 6 hours with us. I think you'll be really impressed with the team I am every day. You don't get to see them as much, and I hope you walk away impressed with the breadth of talent here at Schwab, including our next fine gentleman and leader, Jon Beatty, who leads Advisor Services. Come on up, Jon.

Thank you, Rick. Well, good morning, everybody. Thank you for traveling to Westlake. Jeff told me this morning that for anyone who wants to stick around this afternoon, we've got a cattle wrestling program ready and available for all of you. Well, it is tremendous to see everybody, and I am thrilled to have an opportunity to update you on Advisor Services this morning. Hard to believe, as Rick said, Jon Beatty, I head the Advisor business. 29 years I've been working here at Charles Schwab, all of those years working with independent advisers. And I have to tell you what gets me excited about this business today is the same thing that drew me here 29 years ago, and that is the opportunity to work with entrepreneurs, entrepreneurs who are building something of their own, who are delivering advice in the way that they see is right and competing on their own every day. We've been a champion for RIAs for nearly 40 years now. Actually, next year, April 1, will be our 40th anniversary of serving RIAs. That's not just a job that we do. That is a passion that we have in serving our clients every day, being there for them as they want to serve their clients and help their clients reach their financial dreams. I hope that you see all of that reflected in my comments here this morning. Well, here's what I'd like you to take away from my talk this morning. First, where we are today and the tremendous momentum that we have in the marketplace. Secondly, that our platform is well positioned and has never been in a stronger place. It is more robust than ever, as you heard from Rick, and we are ready to compete. And third, we're leading. Where are we going? Because custody is just the beginning. I'm going to say that about 5 or 10 times while I'm up here today. I hope you take that away from my talk here with you this morning. Let me give you a sense of the commitment that we have to advisers. This commitment is where we start with clients every day. We've been saying this now for a decade. Those of you who have come to these programs probably have heard leader from Advisor Services stand up here and say, helping advisers grow, compete and succeed. Our advisers love the consistency and the continuity of our focus on helping them win in the marketplace. Just a personal story real quick. I have 2 daughters, 20s, 25 and 27. My wife told me recently that she overheard one of my daughter's friends asking her what her father does. And my daughter answered, he works for Charles Schwab in the Advisor businesses, and he helps advisers grow, compete and succeed. So it's permeated the family. But we see it through this lens, which is extending the fiduciary model to more American investors. Rick said it, that ladders up to our corporate mission of helping investors reach their financial dreams. This is not just a mission. It's the lens with which we see every business decision, every investment and every innovation for the future. Well, let me start with giving you a sense of the scale that we're working with in Advisor Services. $5.2 trillion of assets, serving 16,000 advisers nationwide, 10,000 of those firms managing less than $300 million on our platform, true quintessential small businesses but over 1,000 now with more than $1 billion of assets on our platform, up significantly from just 5 or 10 years ago and everything else in between. Those advisers serving 4 million households at Charles Schwab, and we have been the #1 custodian from the beginning of the RIA industry for custodial assets for advisers. I see big numbers here on the page, but this represents the trust that advisers are putting in Schwab every day. That's the trust that everything is built on, on our platform. Well, the RIA channel, we know is the fastest-growing channel in U.S. wealth management here in the country. You can see here a 13% CAGR over the last 6 years from 2018 to 2024. RIAs are taking share and gaining on the wire houses. This is a structural shift that we've been seeing over the last decade, not a cyclical shift. Nearly 70% of advisers now tell us that they prefer the independent model. Assets are in motion in this industry and Schwab is the leader of the fastest-growing channel in financial services, and we're well positioned to invest and grow as this is happening. When our clients win, we win. I've been saying that for decades now here at Schwab. Well, the story of momentum is real, and it is sustained even today. Since the TDA conversion, we've seen our NNA ramp significantly. We saw roughly a 25% growth rate from '23 to '24. last year, a 44% growth rate in our NNA, delivering $285 billion of assets. And the momentum that continues in Q1, $86 billion of NNA. That was a record for a Q1 period-over-period. And advisers are delivering new households to Schwab. Last year, over 600,000 new households, $190 billion of that $285 billion came from new households. In this past quarter, 86,000 new households to Schwab. And we are winning in all channels. Organic growth is ramping and accelerating significantly. That's our advisers winning new clients one at a time in the marketplace. Share of wallet sales doubled last year compared to the prior year. Let me explain what a share of wallet sale is. That's when an adviser chooses to move clients that they already manage from one of our competitors to Schwab. That is the highest sense of client satisfaction right there. Also, in our conversion sales, we saw an all-time high of new advisers joining our platform last year. Our transfer of asset ratio is over 2 and gaining steam. That means we're winning 2x the amount of assets from our competitors than we lose to them. This is not luck. This is a platform that advisers are choosing over and over and over again. I love saying that. This is so fun. Well, you may ask me, well, Jon, why are you winning in the magnitude that you're winning? It's because we're delivering brilliant experiences to our advisers. It starts with our people in the center of everything we do. Over the last 2 years, we've invested over 150,000 hours of training with our service professionals, turning them into workflow experts and digital ambassadors. We've also built a world-class digital experience for our advisers. As you can see here, we are gaining on digital adoption. 73% of accounts now at Schwab are opened digitally, either in our proprietary digital onboarding system or DocuSign. Now 79% of accounts -- or sorry, move money transactions are done digitally with straight-through processing. We are taking paper out of the system and creating efficiencies at scale never seen before. Our advisers, they've never been happier with their experience at Schwab. You can see here, we've got a 55% client Promoter Score, 93% satisfaction amongst our advisers, near an all-time high. But my favorite score is our 94% ease of doing business score. That tells me that advisers are enjoying our platform here at Schwab. And here's the kicker. Thanks to all this digital adoption, we are delivering scale at a pace that we've never seen before. We're reducing the number of hours professionals spend on a per account basis. We're increasing the number of accounts per professional on our platform. But if I could bring it home for you, last year, as I said, 44% NNA growth, $285 billion of assets, we didn't have to hire a single service professional to assume that business and create the kind of satisfaction scores that we're delivering for the firm right now. This is the cycle, expert people, world-class digital experiences, scale and efficiency that is helping us compete and take share from our competitors. Now with our mindset of continuous improvement in adviser services, I think artificial intelligence is going to take this to a whole another level. AI is not a future story for Advisor Services. It's a now story. And we're applying it in 3. And we're applying it in 3 ways. In our own back office, we're using it with our 3,000-plus service professionals, helping them be more accurate, faster and more consistent with calls and workflow with our client. Tools like Knowledge Center, our real-time call transcriptions are helping our advisers answer calls and questions faster, more accurately. And here's the best part. First call resolution is going up, which makes happier clients, happier advisers. And then secondly, outwardly to advisers, converting everyday interactions into actionable intelligence for advisers. We're building an adviser assistant that will start with status updates for advisers and NIGO resolution problem solving, one of the stickiest parts of doing business between us and our advisers. This will help our clients deliver better experiences to their client, move client assets faster and create growth within their business. This will be delivered through the Schwab Advisor Center ecosystem that advisers travel to every day. And then thirdly, and maybe the place I'm most excited about, which is through our open AI ecosystem. Today, our API-driven ecosystem sits at the center of the industry. We are delivering API interactions with our advisers at a pace that we've never seen before. This is driving scale and efficiency while also creating the kinds of experiences that help advisers compete. We're committed to this, committed to building an AI integration platform that helps our advisers and the fintech players innovate and create futuristic business models in their back offices. This is not experimentation. This is applied AI where it's meaningful to our clients. And obviously, with the fiduciary standard at the center and data governance as a nonnegotiable in our relationship with advisers. Well, as you could see, every day, we're striving to be the obvious choice for advisers. And we're saying that now out loud. Obviously, we serve our clients with humility, but we're leading the industry with strength and with boldness on their behalf. But nothing says it better than hearing it from a client. So let's play the video. [Presentation]

Jim is my new best friend at Cerity. I don't think I could have -- I heard him say the trusted custodian, the company that always gets it right. I have to say it is so Schwabvious for us at Schwab. That's right. We launched the Schwabvious advertising campaign last September, and it is already delivering for us, 100 million views, and we're the leader in the category. We're leading in brand awareness. We're leading in custodial service awareness. But what I'm most excited about is we're leading in prospect adviser recall of Schwab and Schwabvious as a provider to them. And we're going to lean more into this in 2026. We're going to deliver it through social, audio, video. We're going to do some selective sports opportunities. We want to meet advisers where they are. And the message I have to tell you is landing. Custody is just the beginning. That's not a tagline. That's a strategic shift in our business. It's a strategic commitment to our clients. So what is it? Advisers that are winning in the marketplace today due to the competitive environment are going to need more from Schwab than just a safe place to put their assets. They're going to need a partner that can help them to serve ever-increasingly complex clients to compete, as Rick said, with the major wires and the global banks, and they're going to build a sustainable business with a partner who sees beyond custody as an opportunity and relationship with them. That's who we are. That's what we're building. And I think that's why independent advisers are choosing Schwab at an outpaced [indiscernible]. Let me talk to you a little bit about how I think this works. So I started with brilliant experiences. At the foundation of relationship with our clients, we've got to deliver on best-in-class technology and expert service professionals. But when we do that, advisers trust us to go beyond. They want our thought leadership. They want our wealth services. As Rick talked about, banking, investment, trading capabilities. That's the value that we can deliver when we go beyond custody and relationship with our clients. I believe AI will thread through all of that and allow us to deliver it at scale, efficiency as well as in the moment with our clients. Let me focus a little bit on the right-hand side of this slide because this is the RIA ecosystem, as Rick described it. Wealth services, I'm going to get into that a little bit more on the next slide. Advisor ProDirect is a program that we launched last year and is gaining steam within our client base. This is a program for small advisers who want to lean into us for growth coaching and back-office efficiency so they can build the optimal business and grow at a faster pace than the rest of the industry. We charge a membership fee to be a part of that. Advisers are excited about it, and they see Schwab as an advocate for them, helping them compete in the marketplace. Another great example is Family Wealth Alliance. That's a firm that we bought about 4 years ago. It's a think tank of advisory firms. Again, a membership fee model where advisers come together and learn and work on getting better at serving the ultra-affluent client. The revenue in that business is growing significantly because we're adding deep value and relationship with these advisers, helping them compete where they want to take their businesses. I'd also mention our ultra-high net worth solution. Again, more services to help them compete against the global banks and the wirehouses. This is how we are going to make a difference in the lives of our clients. These aren't just add-ons. These are ways that we become indispensable in our relationship. We also get win-win monetization here as well as revenue diversification in the Advisor business. Well, let me go a little bit deeper now on Wealth Services because we think this is the big opportunity. Rick mentioned it, banking, investments, trading. You can see here in the numbers, pledged asset lines, up 49%, balances up 49%. Alternative AUM, up 34%, a $90 billion business inside Advisor Services. Our institutional no transaction fee platform, up 82%. Options revenue, up 19%. Are we getting the trend here? Equity and ETF trading, up 37%, advisers are using more of our platform, and that's driving sustainable monetization for Schwab. Banking keeps assets with advisers at Schwab. It's both, as Rick said, defensive and offensive for them in their businesses, and they're leaning in hard. Paul Woolway and team have offered to hire us even more senior bankers so that we can be in the moment with advisers, teaching them how to use a pledged asset line, the differential from a margin loan and a pledged asset line. It is creating great value and relationships. Investments, Rick mentioned tax the long/short tax program. There is no custodian that is more open for business, helping advisers where they want to go with their investors. It brings institutional capabilities to these relationships without sacrificing personalization. And then our trading capabilities, the opportunity to help advisers find the level of execution that they need to serve their more complex clients. Wealth Services is how we're going to help advisers grow upmarket to serve bigger and more complex clients, deepen relationships with those clients and with us and compete with the largest firms in the industry. Well, we're delivering strong results, $5.2 trillion of assets. But in a lot of ways, we are just getting started. There's $37 trillion of managed assets that sit away from us and our relationship with advisers. That's a hard number to kind of get your head around, but this is what I do know that the independent model, the open architecture model is the winning model in the marketplace. And that's exactly where we're investing, and it's the place that we are well positioned in the marketplace. We just need to keep doing what we're doing, listening to our clients and what they need to compete and grow, and we have an extraordinary runway ahead as we look at this opportunity here in front of us. So let me leave you with this. If I could get the slide to change. There we go. Advisor Services is leading today with momentum, scale and a platform that has never been well better positioned for the future because custody is just the beginning, and that's the way that we're going to help advisers compete so they can take share and deliver an outsized portion of that to Charles Schwab. The platform is ready, we're ready. In a lot of ways, I think we're just getting started on this opportunity. So with that, let's get started on some questions.

Mike Cyprys of Morgan Stanley. A question -- so you mentioned custody is just the beginning, and you spoke about the RIA ecosystem that you're building out. I was just hoping to double-click on the wealth services aspect of that. I was just hoping to double-click on the wealth services aspect of that. I was hoping you might be able to help size for us how you think about the opportunity set. Maybe you can elaborate on your penetration today versus where you'd like that to be, where you think that opportunity is? And talk about some of the steps you're going to take over the next 12 to 18 months versus steps over the next 3 years that could be the most meaningful in driving broader uptake of Wealth Services.

Yes. I think what we're looking at is a trend in the RIA space where advisory firms know that they have opportunities to lean on scale players like the asset managers in the industry as well as Charles Schwab. And so as we've coined it, banking is a significant opportunity for us, and that is an opportunity to help them be offensive in the market and go out and win new clients through the liability side of a relationship versus just coming at it from the asset management side. It also, as Rick said, helps them play defense because when institutions are trying to come into their relationship with low balance or I'd say, low rate loans, we can meet them in the moment and help them retain that client and avoid the disruption of a competitor coming in from an angle that they hadn't been prepared for. We think we're a differentiator there because other custodians don't have the robust capability that we have. So that's why an adviser would pick Schwab over one of the other players in that scenario. Investments, I think in some ways, you could talk about it at the symbol level. I mean we've got wonderful breadth of product that is proprietary here at Schwab. Our INTF platform is a way that we're able to establish or extend, I should say, no fee trading institutional level mutual funds and ETFs to our clients. So that's another example of how we are going to extend into the future. I think there's a big opportunity as advisers are looking at turnkey asset management players in the marketplace. We have a tri-party relationship there. And as we talk to fintech providers, there's an opportunity to create better experience in the tri-party relationship model there. So that's another area that we're looking. Trading is something that is, in some ways, coming back into vogue. What's really been an interesting phenomenon, I would say, over the last 3 to 5 years is we've seen national firms evolve and manage assets and an RIA firm at scale that we've never seen before. They now have block trades of the size that almost a pure asset manager would have. And so they can't just plumb those into an online trading tool and expect quality execution. So that's been a place that we've stepped in with our block trading desk, expert traders and the tools in our back office to help drive execution of large ETFs or concentrated stock positions. We are now earning a $5 handling fee for the each trade, and that is an exciting win-win opportunity that we see in the marketplace. I think that there's a big opportunity here, and I think it's mutually beneficial for us as well as advisers leaning into us. As I talk to advisers, maybe my last thought here is -- and there's a big -- we can maybe talk about custody fees in a minute, but that is a topic of discussion in the RIA space. Advisers would prefer not to pay a custody fee. They don't mind paying for fees or for services that directly impact their ability to serve clients. They don't want to pay to move an account or to open up an account. But if we can bring value strategically to help them manage client assets and grow their business, they're willing to open up the checkbook for that kind of service. So that's where we're leaning in for revenue diversification and win-win monetization.

Charles Bendit from Rothschild & Redburn. So you mentioned that the RIA channel has been the fastest growing within the U.S. adviser-mediated market over the last decade or so. When you think about -- and I guess tech has been an important enabler of that growth. When you think about AI, both the way that you're implementing it now and how you might implement it over the next 3, 5 years, do you think that argues for continued very strong growth of the RIA channel? Do you think AI is going to be an important accelerant of that trend?

I do believe the trend continues for 2 primary reasons. One, I believe consumers are waking up to the benefit of working with a fiduciary adviser, especially those of high net worth or ultra-high net worth. I hear from advisers all the time that their ultra-high net worth clients are really beginning to understand and differentiate that kind of relationship versus what they've experienced at other providers. In addition to that, 2 things happening at the same time. You can see in our industry that the sophistication and the capabilities and the size of these firms is growing in a significant way. So I think they are way more competitive today than they were. I would acknowledge that the differentiation gap has narrowed in the last decade. I remember in my early days, you could say fee-based, you could say open architecture, you could say fiduciary and the fish would jump in the boat because the proprietary actions of the wirehouses was a stark difference for the consumer. But as differentiation has narrowed, I think advisers have responded well in upping their game and expanding the services that they provide, moving on from investment management to planning and now estate, family governance. You would be amazed to see the long list of things that advisers do. Many now talking about health and wealth at the same time. I think consumer investors are bringing those 2 together because they marry up to each other in their retirement years being wealthy and healthy at the same time. So I think that's an interesting trend and will, again, allow for differentiation and -- which means shorter sales cycles for winning clients. Maybe a last thought here is that I see firms getting more sophisticated at client acquisition. We know our industry has grown primarily through referrals, investors having a great experience with their fiduciary adviser and that investor referring a friend or a neighbor to that adviser. It's been the engine of growth for the RIA space. But we now see RIA firms, especially the national firms, you hear them on the radio. Sometimes you see them on TV. They're building scalable enterprise marketing, client acquisition programs for 2 reasons, they have to create a value proposition to their adviser base that differentiates from their other opportunities, employers that, that adviser might think about going to work for. So the enterprise mindset is now driving enterprise marketing and client acquisition strategies.

Mike Brown from UBS. So I won't let you get off stage without a question about cash sweep and custody fees. So Schwab's custody is kind of free to RIAs today, and it's kind of monetized through the broad platform capabilities and sweep cash. So new entrants seem to be offering more of a subscription model with market rate sweeps, kind of framing sweeps as a bit of a conflict. As RIAs and clients become more yield aware or perhaps become more yield aware over time, how do you continue to defend the model? And might you offer a paid custody and higher-yield sweep to retain certain RIAs?

Yes. I'll echo a bit what Rick said here. So I have an opportunity to travel around the country. I do roundtables with advisers. We have an advisory board of 20 advisers that we meet with twice a year. We have a client experience advisory Board that meets with us twice a year. I talk to advisers almost every day in my day-to-day activities. And I will say this, what I hear from them is they want us focused on the friction opportunity in the business related to operations and creating brilliant experiences for those clients. We talk about custody fees, and they continue to tell us that's not something that they're interested in, and they like the business model that we have today. And so as we listen to our clients, see the business through our clients' eyes, that's what we hear and see. So our laundry list of priorities are about driving more scale, more productivity in the ecosystem. I'll share it to you this way, which is we have about 8 million touch points a year with advisers. Let's say a touch point lasts 4 minutes. Do the math. That's 32 million minutes a year of touch points between us and our advisers. Advisers want us to take that number down so they can repurpose every 1 million minutes to other ways of serving clients to be talking to their clients about their estate, their financials, their health and wealth and less time between us and the back office. That's the list of things that advisers are asking us for today.

All right. And I think we have time for one final question.

Let's make it a good one. Gosh, pressure is on.

So Ken Worthington from JPMorgan. So Rick indicated on the first quarter call that as part of the win-win monetization, it's exploring ETF access and service fees and ETF managers don't want to pay these additional fees. What is Schwab's potential to leverage its relationship with advisers to partner with some asset managers to better monetize access and service fees. Does that make sense?

Yes, it does. Thank you. And that's a great question for Andrew when he gets up here later in relationship with the ETF providers. But I would tell you the perspective that I hear from the RIAs is that they believe that players who are able to monetize the relationship between them and Schwab as a centralized service should help pay some of the freight to deliver that service. So for a long time in our industry, we had shareholder servicing fees around mutual funds, which helps carry the freight for delivering services to investors and advisers. And they believe that ETF players should come along in the same way and participating in the economics of the platform. So we hear good support from our adviser base that, that is the right thing to be pursuing to make sure that everybody is carrying the day to serve investors and advisers on our platform. But Andrew can follow up on the point of view from the ETF providers. Well, I want to thank you all for your time and attention today. I really appreciate the opportunity. And I have the pleasure of taking you all to a break now. I think we're going to be back here at 10:10. So let's get -- let's get a little bit of a break and get back here at 10:10. Thank you. [Break]

All right. Welcome back, everyone. Really excited to be here to talk about the retail business. Chuck Schwab founded this firm over 50 years ago with really one purpose, which was to help individual investors and traders get great financial outcomes, whether they were young or old, big or small, traders or investors, the mission, the purpose was the same, which is helping them achieve the outcomes that they so richly deserve. And I'm proud to say we've made a lot of progress in the retail business. You'll see we're at 27 million retail accounts, over $5 trillion in assets but we really are just at the beginning. I really feel that. I feel that for a couple of reasons. Number one, we're operating in a business with single-digit market share. We're a dominant player with single-digit market share in a business that is growing near or above double digits. That's an incredible place to be from a growth standpoint. I also believe in my core every day because every day, whether I'm in a cab at the airport, in my hockey league, in social circles, I talk to people who would benefit tremendously from Charles Schwab. And so it's that -- those macro factors, those micro conversations that give me as the Head of Retail, tremendous, tremendous confidence in the potential for significant growth over the next decade, much building off the tremendous growth we've built over the last 50 years. So with that, what I'd like to do is touch on a couple of things today, very specifically talk about the strength of the business overall, talk about the very specific growth we delivered in '25 and which continues into '26, talk about how well positioned we are, not just simply because of our winning strategy but also because of the opportunity that I talked about earlier and then talk about how we're going to go after that opportunity with very specific initiatives, proven strategies and directions that will drive that growth. Starting with some results. We delivered really strong -- in the Retail business, really strong results, '25 over '24 across all client fundamentals. You can see a couple here, but core net new assets are up over 44% new-to-firm households up over 14%. Client Promoter Score, a significant jump from 57 -- 58 to 67, very, very significant progress, which I can talk about. And those results have continued into 2026 with Q1 delivering $53 billion of NNA, over 300,000 new to-firm households and another jump in client Promoter Score to 2 points to get us to 69. That CPS score is no doubt a reflection of the relationships we built with clients but also the incredible service we deliver, the technology resilience that we've maintained that you'll hear more about from Dennis later and also just all the new capabilities that we brought to market over the last several years and quarters. The results are in particular with 2 segments with advice seekers and active traders. On the active trader side, daily average trades, '25 over '24 for retail were up 32%. That momentum continued into Q1, another 25%. And as you saw from our SMART report, that momentum just keeps going. And then managed investing flows is second year in a row where MI flows were up over 35%. And I -- Rick talks about a bull market for advice. There is absolutely a bull market for advice. There's also very specifically for a bull market for the advice that we are bringing to market and we are serving to our clients. I fully expect those numbers to continue through '26 and beyond. And you can see already the momentum we had in Q1 with $22 billion of net new MI flows, so really strong growth. In addition to those results, we made many, many enhancements to the value proposition over the last several quarters. Rick covered a bunch of them. There's a long list beyond this page but I'll just hit on a couple. We hired hundreds of more financial consultants, critical to our strategy, opened dozens of more branches, absolutely critical to our strategy. We expanded our alternative investments platform, and there's more to come there, launched lots of new trading products. You'll hear more about this from James. We enhanced our private wealth services offer, which is our offer built for the ultra-high net worth, the $10 million plus. And near and dear to my heart and our purpose, just a couple of weeks ago, we launched a teen account. This is the first purpose-built account for 13- to 17-year-olds to get started investing where unlike in a custodial account where they're a passenger, in this case, they really are in the driver seat with the appropriate guardrails but they really are in the driver seat. Launching this account is really the definition of living our purpose. We want more and more investors in this country. We want them to get started earlier and earlier. And most importantly, we want them to have the service, the education and support to be lifelong successful investors. That has been -- I think Chuck probably would have said that 50 years ago, we'd all say it every day but it's now more important than ever when you -- we see others out there blurring the lines between investing and gambling. I'll move off this but as a father of 2 boys, having them, unfortunately, they're already beyond that. They're already adults making their own decisions. But I would have loved to have a teen account for them, and they had a custodial account, but the teen account is a much more engaged product. With the results and the enhancements, not surprisingly, there's lots of recognition of this business, and I think it's well deserved. I highlighted a couple here. Stockbrokers.com named us #1 overall for the second year in a row but not just #1 overall, #1 in advanced trading, mobile trading, high net worth customer service, ease of use. These are 5 critical categories for us to be winning in every day. So really, really proud of that metric or that accolade. And also, I think as Rick mentioned, U.S. News and World Report, second year -- fourth year in a row being #1 overall. But again, not just #1 overall but #1 in stock trading, #1 in options trading, day trading and 4x. So really, really a strong indication of not just the breadth of what we offer but the depth of what we offer. I think Investopedia just this week announced that we were #1 also for mobile and client education. Again, 2 other areas that are really core to the value proposition. So with that success, where do we go from here? We're going to invest in proven strategies that work. Number one, more and more relationships, which I'll talk about in marketing; number two, launching new products and capabilities to deepen the client relationship across the client spectrum. Number three, we're going to continue to elevate our digital experiences, in particular, in the mobile space, but across the board. And then number four, which I know there's a lot of interest in, we are going to lean into AI even more as a tremendous unlock of value. I think we're already seeing that unlock in '26 in a very real way, and yet we're also just at the beginning of what we will see. So let me touch on each. The relationship story, I think you know well from prior years that we've back tested this data every way, every day, every way. And I can tell you, without question, assigning a financial consultant to a client at Charles Schwab, when you compare it to clients who are like clients with like assets and like investing styles who don't have a financial consultant, you see a 10-point improvement in CPS. You see over 2 -- almost 2.5x the NNA, over 4.5x the enrollment in MI. So really, really strong results from those FCs. And it is the FC that matters. But we also know, all things equal, local is better than national. In fact, when we have a local branch versus a national relationship, we see about a 35% improvement in market share in that branch. So not surprisingly, you're going to see us continue to invest in financial consultants and wealth consultants, and you're going to see us opening more and more branches, expanding and renovating other ones. It is core to our strategy and definitely working. Another big part of our strategy that's working is marketing. Marketing has always been since day 1, certainly from the day Chuck started the company, marketing has been a critical lever of growth for the business and a critical lever of growth for retail in particular. I am proud to say in a market where our competitors are spending more, some a lot more, I would argue pretty inefficiently, many of them, we've been able to keep our spending relatively flat, in fact, materially down coming off the TD Ameritrade integration. And despite that, deliver more and more client outcomes defined as more and more new-to-firm households, but also younger. Younger is critically important to the next generation for them and for us. Our average age of our new-to-firm client is now under 40, just under 39. And in fact, the average age of our total retail client is now below 50 at 49. That's been coming down year-over-year materially. And that may not sound as impressive as it is, but I can tell you, when you have 27 million client accounts, each one of them is associated with an individual. Unfortunately, every one of us grow ages exactly a year, every year. It is quite hard to bring your average age down with that deep of an embedded base. You've got to do 2 things. You've got to bring in lots of new clients and they need to be a lot younger, and we're doing both of those. And I think you'll hear more about this from Stacy, but I think the success comes from a couple of things. Number one, we know who we're going after. We've got very clear design targets. Number two, we are relentless about data and measurement in all of our marketing. And number three, I think we've just got an insight-driven creative marketing team who knows how to go after it. So marketing will and continue to be a big lever. New products, also critical to our success in deepening relationships. I talked about the teen account. Let's go on the other end of the spectrum for the self-directed -- largely self-directed investor who wants direct access to spot crypto. As Rick mentioned, as of this week, we're beginning to invite people into our spot crypto offering. It is -- unlike others you may see out there, this is a fully integrated offering with the retail brokerage account. It will feel to the clients, and it is a Schwab experience. It is another account built into the Schwab ecosystem with easy money movement, easy trading. It's Bitcoin, it's Ethereum. It's priced at a great value. And over time, we're going to move -- we're going to have asset transfers come in as well. So I'm really excited about crypto. Already 20% of ETPs in the industry are held at Schwab crypto ETPs. So we know there's interest there. And I also travel to branches constantly and talk to clients. We have lots of clients who hold spot crypto elsewhere, often largely appreciated crypto that they want to bring over to Charles Schwab, and they're just waiting for to get the invite. And then private markets is another big one for us. You'll hear more from Andrew on this later. But with the Forge acquisition, we're not just #1 in public equity markets, but we're #1 in private. I think that -- I think that private market opportunity is significant for the entire client base over time, but in particular, the high net worth and ultra-high net worth who wants direct access to that $9 trillion of venture-backed private equity. Beyond products, we'll continue to invest in capabilities for key client segments, high net worth and ultra-high net worth. We call that private client and private wealth services, think $1 million-plus private client, $10 million-plus private wealth services, building bespoke capabilities for each of those segments, the center of which is making sure we have relationships for all these folks. But for ultra-high net worth, we're also doing some interesting things. We just launched family benefits, which allows us to treat the entire family with one relationship and one set of benefits, which goes a long way. We launched a loyalty program, which is really about delivering curated and specialized experiences to the ultra-high net worth. And we also are launching a purpose-built performance reporting platform that is built for the complexities that ultra-high net worth clients have. High net worth, we're winning with them. It's critically important. We saw just last year a 31% increase in year-over-year asset growth amongst that category. On the trader side, in the interest of time, I'm going to defer to James, who will come up in a second to talk about Trader, but lots of new capabilities in Trader. I would just say in Trader, this is not just about daily average trades. Traders also bring in 2x the NNA on a relative asset-weighted basis than their equivalent retail clients. So absolutely need to win with traders, are winning with traders, and it's not just about that, it's about assets. And then Wealth Advisory, Neesha will talk about more but wealth in general and particularly Schwab Wealth Advisory is a very, very important focus area for us. We're doing more and more localization, more and more discretionary, more and more tax, trust, and the estate. And again, this is the virtuous cycle. When a client enrolls in Schwab Wealth Advisory or MI more generally, we see their client outcomes improve materially. So it's great for them. It is also great for us and not simply because of the monetization and the predictability of that monetization, but we see higher retention, higher consolidation and as you can see, materially higher CPS, which means more clients starting at Schwab via recommendation from someone they trust, which is a great way to start. Digital. The digital platform still remain the primary interaction models for our Schwab clients. We have great people all over the country, have great people in our contact centers, but the vast majority of interactions are still dot-com, mobile and thinkorswim, meaningful investments coming there on -- a lot in the mobile side, not surprisingly, maybe to you, mobile is now 2/3 of all of our client interactions. Just a couple of years ago, it was 50%. 2 years from now, it might be 90%. But a lot of investments in the mobile space, including -- we keep winning for having one of the best or the best mobile apps but we're not slowing down. We're launching a fully refreshed and even more modernized version of that app across mobile and web, we're making investments in trading and positions and research. And then happy to say we also just launched a full fractional and notional trading across our platforms, which is a great unlock for many clients who want to do automatic investing or small investing, especially for smaller clients. And then on thinkorswim, again, I'll defer to James in a minute, but a lot of investments in portfolio management and risk management. And we're 2 years off the integration and thinkorswim now represents 49% of all of our retail trades at Schwab. That's -- if there was any debate about adoption of thinkorswim as a platform within the Schwab client base, I think that's -- would put that debate away. Last section I want to talk -- or one of the last section I want to talk about is AI. We are leaning heavily into AI as a significant unlock of value. As you'd expect at Charles Schwab though, we are doing it in a very practical way, and we are doing it consistent with our strategy. AI is not changing our strategy. AI is enabling our strategy, both on the client side and on the client-facing professional side. On the client side, we just launched the first Gen AI client-facing application that I think from any major firm, any major bank that we've seen out there called Portfolio Insights. What Portfolio Insights does is it provides a summary of a client's portfolio. I have 28 accounts at Charles Schwab, tremendously useful to get a narrative. It brings together portfolio performance, market news and Schwab and content from the Schwab Center for Financial Research into a holistic narrative for the client. That's out today. That is just the beginning. What is coming next is on the right, which is a ChatGPT-like experience where clients will be able to interact with a Schwab Assistant in a multimodal way to get deeper portfolio insights, to get answers to service questions, to get guided coaching in session to query personalized questions like how -- what are my capital gains across my top 5 brokerage accounts over the last 12 months or 6 months? Very practical use of AI in a conversational way. Rather than me saying much more about it, I'm going to show a demo. Two things I want -- a video, 2 things on the video, it may seem a bit fast. If you're like me, I don't listen to podcast or videos at 1.0. I often do at 2.0. I won't do that to you. But I think it's at 1.2. So if it feels fast, that's why. And then second, what I'm showing isn't in 2 years, this is in months. This is literally in months and [indiscernible]. [Presentation]

So I hope you get a sense, this is coming very, very quickly over the next couple of months, you'll start to see this already. It will be multimodal. It will get better and better but a really good example, I think, building something that is additive in a very meaningful way to the Schwab experience. I say additive because for some clients, they may use the Schwab Assistant to do a couple of things. But for other clients, over time, it may become a full replacement for navigation and point and click. It may become a third channel. Critically important. What I just showed was not new capabilities. It's a new interaction model. The capabilities that we bring to market ultimately will be driven by our strategy and will be channel agnostic. The second thing I wanted to talk -- I think I left it quicker. The second thing I wanted to touch on quickly was our client -- what are we doing with client-facing professionals. A lot of great work you saw in the back of the room that's in production today. The first thing we launched was our Knowledge Assistant. This is a Gen AI LLM tool that allows clients to -- or allows our client-facing professionals to query all of our knowledge center data all over the company quickly to get answers to client questions. It's been tremendously valuable. We have a research assistant in production. This is for our sales professionals. All of them are using it to query all of our Center for Financial Research content and other content to find, aggregate and deliver to our clients relevant market commentary. And then the service assistant in the back of the room as well, every single Schwab call is now going to our service assistant. It is a Gen AI tool that does all transcription, in-session coaching, all next best action, call follow-up. It is a dramatic, dramatic enabler for our financial services professionals to be much more effective with what they do and deliver better client service. On the far right, we're building right now, what we're calling a relationship assistant. This will be a market likely in weeks, not even months. It mirrors our service assistant. And again, it helps our relationship folks with meeting prep, in meeting work and post-meeting follow-up. So again, let me play a quick video showing you what that will do. [Presentation]

What gives me so much confidence with AI as this company was built on building the best -- building great relationships through the best of people and technology and I see artificial intelligence as being an incredible enabler of us leaning in to what we are really good at, which is trusted relationships on people and technology. And hopefully, you get a sense from that from these. I just want to end really quickly with where I started, which is to say, we're 55-plus years in, but this retail business has achieved incredible size and scale. We're now sitting at $5.3 trillion over 7 million daily average trades, 27 million accounts, significant lending book of over $130 billion, managed assets of over $836 billion, incredible number from where we were years ago. And we have those numbers because we bring together this people and technology, not just great service, but best-in-class digital platforms, not just great value, but best of Schwab and third party, not just investing, but investing trading, banking advice, all under one roof, supported by a whole cadre of coaching and education and branches. That model is working, and that's the core model. Beyond the core model, we have curated experiences for lots of different segments. I identified a couple here, self-directed investors, traders, younger investors, advice seekers, high net worth, ultra high net worth. We have specialized capabilities for each of those. And in each of those categories, we are winning. We are #1 in retail trading. We are #1 in options trading. We're winning with younger folks with over 60% of our new to firm households being under 40. We are winning with advice seekers with rapid growth, year-over-year growth that I see continuing for the foreseeable future. And we're winning with high net worth and ultra high net worth. So I feel -- hopefully, you sense my passion. I feel a tremendous amount of confidence in where this business is. But frankly, I have as much confidence about where this business is going to go. For the reasons I said earlier, I can't think of a better position to be than being at a dominant player with relative -- with still low share because of a fragmented market in a business that's growing dramatically and in a business where clients need us. When people come to Charles Schwab, it's good for the -- it's good for the client, it's good for the company, and frankly, I think it's good for the country. So with that, I'm going to bring up my colleague, James Kostulias, who's a critical part of the retail team and leads specifically all the trading business.

Well, energy up, you got to get energy up a little bit. I'm really happy to be here. I had a great conversation last night. I love the questions. I'm going to try to get to, I think, what were some of the key points that were brought up last night. And so really where we start, I think, is you know the numbers as well as I do. I'm sure maybe in some cases, even a little bit better. So we have some numbers on here, but really what I want to talk about are 3 main things. The growth we've seen in the trading business as our undisputed leadership position in the business, why we believe and confidently believe that, that growth is sustainable and what we're seeing to really indicate that to talk a little bit about the holistic value proposition, which is honestly the secret sauce in the trader space, in different market conditions, different components of the value proposition are more important. And obviously, we're in some unique times with some of the things that we're seeing with the conflict in the Middle East and the geopolitical situation. And so the education part of the business has become really important now as clients are trying to navigate those different market conditions. And then three, why we're so excited about the future going forward. The future is really bright. We have our foot squarely on the gas and nowhere near the brake, and we are really excited about that. Again, not to get into the numbers too much. Just to tick and tie the one, you just saw from Jonathan, that 9.9, you saw over 10 in this morning's smart report because I know you all read that first thing in the morning or maybe after your trip to the gym, that 9.9 is a total firm number, which is now obviously over 10 that includes the RIA business that Jon had talked about before, continue to see really strong growth in derivatives. The other thing I think that's really important thematic to think about here is we've got the active trader business, and my team and I live our lives thinking about both active trader clients and their holistic needs across Schwab, whether that's in the trading space or beyond the trading space, right, and how we partner across the organization for that. But trading is also what we think about all the time. And a lot of this trading that we see, especially in the growth numbers are coming from clients we don't segment as active trader. And that's been a trend that's really got kicked off during the pandemic, but sort of the seeds were planted, the seeds have been watered with Liberation Day and honestly, under this entire administration, there's always interesting trading opportunities and clients are engaged whether they're traders or they're not traders, right? And so we talked about half the trades placed on the thinkorswim platform. That means half the trades are placed on non thinkorswim platform. We actually look at the client base that uses thinkorswim. About 45% of those users are not segmented active traders. But what does that mean? They're interested in trading. They may be interested in the charts. They may be interested in watching the Schwab network there. They may create watch list. They may like the news and research. Our live education events are segmenting half traders, half nontraders now. All those non-traders are interested in maybe placing their first option trade, maybe placing their first equity trade, honestly, maybe placing their first complex option trade. And so huge opportunity with both the active trader space and the nonactive trader space. Jonathan talked a little bit about the success we're having with younger clients. That permeates into the trader business as well, where you see the 42% of clients from Gen Z., leveraging the thinkorswim platform. Education, so critical to our value proposition, is a little bit of a barbell. We get a lot of the older clients who are interested in education. Maybe they've just retired, they've got a little bit more time they want to learn about trading, and we got a lot of engagement with young folks within all the different value proposition pieces we have in education. We have courses. We have online content. We have live events. We do 35-plus hours a week of digital virtual content. And the trend within derivatives trading that you've seen for a long time, absolutely is continuing. And that 38% number is a big number that we're really proud of. I think the other key point on why we believe this engagement is sustainable is historically, trading was very, very tightly correlated to the VIX, the overall VIX and the beta was probably near 1 beta, right? VIX goes up trading volumes go up. We're seeing unbelievable results, as you saw in the smart report the other day at a time when the VIX is fairly muted. Why do we think that is? We think clients are -- we know clients are able to find opportunities to seek volatility either in products, some of the new products that are coming out, single stock to date options, as an example, you've got levered funds, obviously. But you've got volatility in sectors, right? The migration that we saw in client trading from mostly tech, most of the time to a concentration in metals trading at the end of January, rolling into energy trading that we're seeing here with some of the geopolitical news in the environment. And the reality is traders and investors are finding opportunities in this market, not directly correlated to overall volatility. And that's honestly been happening really since the pandemic and we see that as a trend that's absolutely going to continue here. The proliferation of new products is going to help support that as well as we look. I talked about single stock Zero DPE. We've got some other things coming down the pipe with binary options and outcome-based options from NASDAQ and the CBOE. You've got single stock futures and other things coming as well, which is going to help clients identify trading behaviors. Jonathan talked a bit about sort of the broader success that we get from the industry, but I have to put a couple up here to third-party validation, right? That's important. The other one, I think that's important. We talked a little bit about last time, I recognize a lot of faces, we were here coming off of the TD Ameritrade integration. We had some clients who weren't thrilled about getting moved over to Schwab. Those clients are absolutely loving it here, and they're taking advantage of broader Schwab products in droves, right? And so they're traders from Ameritrade taking advantage of the things Neesha is going to talk about in the invoice space and in the banking space. And all that has led to a 14-point year-over-year increase in our Net Promoter Score, and those trends continue to rise. And so our traders are really happy here. The other real big opportunity around traders invest and investors trade, right? And I talked about the investors trading piece. The traders investing piece, again, is such a big opportunity for us as we look at them taking advantage of Jon Beatty's RIA services where needed and Neesha's wealth management services where needed. And all those things are important to traders. The idea that we had a lot of self-directed clients is true but those self-treated doesn't mean do it alone, do-it-yourself. They often want some form of help in some form of engagement, whether that be with traditional wealth management on the one side or that be with the trading experience. So we talk a lot about our experience curated for traders supporting traders. And nobody can really match that. As we look at the value proposition, this is really the secret sauce to the trading offering at Schwab. We have clients who are here for the platforms. We have clients who are here for the service relationships. We have clients that are here because they tell us, no one helps me manage risk in my account better than you, whether it's the experts I talk to, whether it's a specific analyzed tab within thinkorswim, nobody helps me manage complex trading relationships the way you all do. And we have clients that are here for the network, right? We've got that are coming out and attending multiple live events in cities. They bring their laptop. They sit down for 6 hours and they engage in education. That's a huge time commitment and they come back and those CPS scores are actually even higher than the Net Promoter Scores that I talked about before. And so it's not one of these things. It's an absolute definition of the sum is greater than the whole of the parts. It is absolutely a holistic value proposition that appeals to traders wherever they are along the spectrum, right? Start out from placing your first equity trades, your first option trade, your first complex option trade, cross-asset class hedging and portfolio margin accounts, they all take advantage of different components of the value proposition. We couldn't be more excited about what's ahead. We push to 24/7, it's coming. It's real. In some cases, it's here. We'll be -- we are live 24/7 now with crypto trading that we just recently launched, and we've got the CME listing their first products here at the end of the month, more products to come. Our options, market makers are equity exchanges, everybody is moving towards 24/7, which is only going to create additional opportunities. We continue to enhance the margin experience. Some of you have asked questions about the pattern daytrader rule changes, if you want to grab me at some point offline and have a quick conversation on that, I would be happy to do that. But that's also, we think, going to benefit those individual investors, especially the younger sort of smaller account who had some restrictions on them before. And we recently just rekicked off an IPO experience at Schwab that we are really excited about. There's been a lot of talk here today. We are using AI within the thinkorswim platform around how we curate and present some content for clients. We have more to come from an agentic experience to really help onboard you to the platform and then plug in essentially to some of the things we talked about with the services system. So more to come there, but we are absolutely leaning into AI in the trading space to help clients with their trade ideas. I hit on a few of the education things. I want to talk about the people part for just a couple of seconds. Nobody, nobody offers as much people support for traders as we do. We've got all the technical support you want. Any medium you want to come through chat, Bones, live events, in-person in branches. We're the only firm to offer trader specific branches to help our active trader specific needs. We've got multiple people in multiple locations that are leaning in and focusing on that, all through clients' eyes, right? You want to interact with us, you choose the terms you want to interact with us, and we'll provide the world-class value proposition. I talked a little bit about some of the education stuff. Coaching is a huge thing. We've seen a huge uptake in coaching. The Schwab network is a little bit of a hidden gem that helps our clients understand, get some trade ideas, hear things about risk and get to see the platform in action that we host on the network. If I can conclude for you all, I would just say this, more and more investors are engaging in the markets. Our traders are always going to be engaging regardless of market conditions, they trade in bull markets, they trade in bear markets, they trade in sideways market. We're getting more and more engagement from the nontraders, which is fantastic. We're continuing to expand our market-leading offer to meet their demands wherever they are. And we're really excited about a lot of the things coming forward with maximum commitment towards investing in a better experience. Thank you so much. With that, I want to invite my boss and friend, Jonathan back up, and we're going to do a little bit of Q&A. Welcome back.

Ben Budish from Barclays. Question maybe for either of you. I'm curious if there's any more stats you can share around retail trading, particularly with adoption of derivatives. I'm curious how many accounts are enabled for derivatives and I imagine you see some upside to that, but how many of the actual customers are doing it? And anything you could share in terms of the mix shift, there's been a lot of growth in things like index options, and there's obviously some P&L implications we're thinking through, but I would think that engagement with derivatives more broadly is also a positive. So curious on those 2 items, and anything else you can share.

Yes. So we can come back to the exact number. We have millions of options approved accounts. Their activity levels will vary month-to-month, some are active and some are not active in other months, but those numbers continue to rise as well. We're also investing in processes to make it easier for clients to apply for options, migrate through the various different approval levels. By easier, I don't mean sort of laxing from a compliance perspective. I just mean making it clear, making it cleaner making the process simpler. On the mix point, I think I talked to some of you about this last night, it's an important one. When we're in markets where we're seeing really explosive growth in trading, oftentimes that growth is more equity heavy than option heavy. If you think of our traders as being very consistent, they may trade 5% more, they may trade 3% more in different markets. But if you think about those growth numbers coming from your nontraders, those are typically more equity focused. Their notional values of trades are typically a bit lower. There are options trading when they do derivative trading, they do a fair amount of it will be smaller number of contracts per share. So I think overall, there's a little bit of a natural hedge here, which is, I think, something that sometimes gets missed as well. When we see their trading numbers go up, obviously good for us, good for our clients, good from a revenue perspective. But you'll see the revenue per trade go down a little bit. If you were to see a little bit of a pullback, the pullback typically comes in the nontraders and so the trading volumes, if they were to come down a little bit, you will see the revenue per trading the contract for Trade Creek back up. So as you're thinking about your model sort of specifically, as we see a lot of growth and you start modeling more growth in the revenue per trade piece will come down a little bit. And if you start to pull back a little bit on trades, I would see that going up.

I would just say that a lot of the great derivative growth we're seeing, I think is us talking to clients about what their trading strategies are and how we can help them with risk management and things like that. So that's pretty unique to Schwab, I think, adding that value.

Chris Allen on KBW. I was wondering if you were working on or at least thinking about AI-driven solutions for portfolio management and/or trading. In terms of utilizing AI for active portfolio management implementing trading strategies.

Yes. So I'll start and jump in. But what I demonstrated then there was, again, I would call the Schwab system, that Schwab assistant, over time, you can imagine it being a different interaction model that supports all the capabilities you could do a Schwab, otherwise would point and click and navigate to. So I do expect that over time, we will add more and more capabilities to that assistant. I don't think AI will change our strategy. We have a strategy, and we will use AI to enable that strategy and what we enable will be cross channel agnostic to the channel. So certainly, being able to say the assistant, okay, based on this, I want to place a trade, place that trade for me. Here's the market or here's the you want to limit has placed it at this limit order. Absolutely, I can imagine things like that. That's consistent with what we do today.

And I would say we have a growing API business where you have clients who are doing a lot of the more sophisticated trading today. We absolutely want to incorporate agents into that to help them. Some are using their agents already today and working with us through the we want to, as Jonathan said, talked about the expansion of the concept there and bring that into thinkorswim. I think the first place we're going to do it later this year is going to be around the onboarding and sort of learning the platform, right? We think we want to make it easier for clients to engage with an agent to understand how to set up and customize and do sort of the basics. You can think of the natural evolution from that as they consume hundreds of pages of content that we have in PDFs. People don't want to read 100 pages just that's probably an insight for you all, but they don't want to do that anymore. They want to engage and they want to have conversational dialogue about it. The next step is we have tools like Think script that will help you automate your trading. How do we make that simpler and much more conversational as opposed to a bit more like programming language today, all that's coming.

Devin Ryan with Citizens. More of a short-term question. Trading volumes are hitting records right now. We're in a good backdrop, you mentioned kind of this administration and opportunities. Can you help us think about how much of the activity right now is secular and structural, meaning more products, more clients they're better educated. And so people are just more engaged structurally versus how much is just this cyclical element, and so we wouldn't be surprised to see a big pullback. And I think that -- just trying to understand if we're seeing signs of maybe or similar to what we saw in 2021 when we peaked and then roll over. How are you thinking about that right now?

Yes. That's a fantastic question. I think I'd say 3 things to that. The first would be absolutely some of the traders and the investors that got sort of baptized by fire during the pandemic have matured, and we like to think our service model and our education model has ultimately helped with that. and they're now fully engaged in the market. And they're comfortable trading in various different market conditions. If you looked at our numbers specifically from March, but really for all of Q1, where we had some market pullback here and certainly more uncertainty with the geopolitical situation, our trading volumes continue to rise. Some of our competitors certainly didn't. And I think I would say that is a structural change that we have seen. I think the other big change that I've seen historically before, I talked about the correlation to the VIX overall. But a lot of our traders used to be very either symbol or very sector-specific. The migration across areas of different sectors and different symbols to trading opportunities. is really, really interesting to me and something we've been seeing for a while now. If you had told me in January of this year that for our younger clients, our 30 and under clients for a specific week in January, GLD and SLV were to be the most traded ETFs, I would have said you're insane. Young people don't trade gold. They don't trade silver, right? They're all in technology or everything else. That lasted for a brief period of time, we saw extreme volatility in the metals then they moved over. Now they are trading energy stocks. And so I think the ability to sort of migrate from sector to sector and symbol to symbol also feel structural to me versus secular. Now I do think, to your point on the administration and sort of the broader world, there's absolutely some that we're getting from that. But if I were looking at the continued increases we're seeing, I would put much more in the structural change camp as opposed to secular trends.

I would -- I think our -- just to add, our client base is pretty distinct in that regard. There's always going to be cyclicality associated with markets VIX, geopolitical environments, think we have a much more durable client base who have a more disciplined and professional trading strategies or investment strategies that I think creates a lot of that durability.

So maybe 1 way to put that, 25% of our option volume is complex option volume. So the implication there is, hey, in any kind of market, I can trade. I'm not taking fires on deep out of the money calls and just cross my fingers and hoping the market goes up. That's very unique in the industry.

I think we can squeeze in one more.

Alex Blostein with Goldman. I wanted to double-click into a couple of things you mentioned, particularly related to market structure developments. One is 24/7, which feels like it's grown rapidly, and you obviously made a point that you already offer some of these capabilities. But to what extent do you think this could enhance your ability to access retail investors outside the U.S. because that sounds like where the incremental could really come from? And then separately, but sort of new things, prediction markets, maybe it's helpful to get your latest view on how you see yourself engaging with that part of the world.

Let me take both.

Yes.

Maybe prediction markets will be over the next break 1 because we're going to run out of time. Happy to chat about that one. But I think 2 things I'd say. The international business is a great business for us. Rick touched on a couple of things. In any given month, probably 8% to 12% of our new accounts are coming from the international business. So we're seeing nice growth there. They participate and an outsized proportion in the 24/5 trading that we see. So they're punching way above their weight because they're interested in U.S. market trading on their terms. I think that's only going to increase as we see it move beyond 24/5 and into 24/7, and we continue to see liquidity rise, right? Liquidity begets liquidity. I think there are a lot of international clients who want exposure to U.S. markets for sure. And I think the 24/7 push is absolutely going to be something that's going to help with that. We will continue to see growth there. Lastly, I would just say on that, we see big nights in 24/5 trading around geopolitical activity, Navidea Earnings Day is typically a day, we'll see a lot. On a normal Tuesday and a normal Wednesday night, you don't really see all that much volume there. But a lot of the core volume you see in the day-to-day days is driven by the international clients, and the trends there is actually positive.

I know we're out of time. So prediction markets maybe offline, but maybe just generally back to our purpose. We are here to help individual investors and traders achieve great financial outcomes. And for that reason, I think Rick and many of us talk a lot about the getting the line between gambling and investing. And that's we do believe there's a line there. Now with respect to prediction markets, there could be an opportunity over time, and we're certainly looking at them. But it's got to make sense for us. It's got to make sense for our clients. And that's the lens we look at, and we've looked at for 50 years, and we've continue to innovate over those 5 years and broadening new products to market at the right time under Schwab's terms when it makes sense. And I think crypto is a great example of that. So I know we are -- I think we're out of time. So thank you, and I think I get to introduce a Adele Taylor, who leads our workplace business. We call it the workplace business, but it's really side-by-side with the retail business and a critical part of it. So thank you.

Hello, everyone. Great to be here with you all. I'm Adele Taylor, and I lead our Workplace Services business. I'm very excited to share with you today how Workplace is powering Schwab's performance. and the incredible opportunity we see for it to have a much larger role in our growth story going forward. So let's jump into it. I'm going to share 3 things. First, Workplace is driving asset growth for Schwab today, both on a stand-alone basis and in the way that it supports our retail business, as you just heard from Jonathan and also our Advisor Services business. Second, the market is coming towards us, things that are changing externally about what companies and corporations want from their workplace services match very well with the value proposition that we can provide at Schwab. And third, we aspire to be much larger in this space, and we're leaning into that with a set of investments and an action plan to get there. What I'd love to start with is pulling the curtain back a bit on what is workplace services. It's a set of businesses that are very complementary and work together as a platform. I'd like you to think about it in 2 categories. The first category is places where we go directly to a company and sell a service and then we engage directly with their participants on an investment-related need. This includes our retirement plan services. We administer 401(k)s, nonqualified deferred compensation plans, employee stock ownership plan, a whole litany of other plan types. So it also includes our stock plan services business. This is equity compensation awards and employee stock purchase programs. We manage the equity awards program. We record keep it and then we accept the shares when they invest directly into our brokerage accounts. We also have 2 brokerage offerings, designated brokerage services. which is a trade supervision and monitoring tool that companies use for compliance purposes, again, using our brokerage capability from retail and personal choice Investment Services which is a brokerage offering inside 401(k)s, sits on our platform, also sits on more than 20 other record-keeping platforms. So taken together, a lot of businesses, but we go directly to the sponsors and then we're able to engage with their participants as a result. We also have 2 businesses that support RIAs and extend our retirement offering to the very small end of the market. We power key partners of RIAs called third-party administrators. Now this is an established and recognized business. Our record-keeping providers, our recordkeeping platform is known as a service-centric, participant-centric trusted name in the industry. In Stock Plan Services, we're a top 4 providers. And in fact, we serve out of the magnificent 8, 4 among the largest public companies in the world. And then our brokerage products are also leading Personal Choice as the #1 in this category. And as a result, this is driving on a stand-alone basis, performance for the firm. It's about $1.3 trillion in client assets. We touched 6 million participant accounts. And last year, we drove about $70 billion in NNA. Now again, that's stand-alone. What I'd like to share next is how does workplace power the rest of the firm. And this is probably the most important thing that I hope you take away from today. Let's start with our retail business. By nature of us engaging and building these relationships directly with those 6 million participant accounts, we're able to introduce them to everything that Schwab has to offer. They come to schwab.com, they call our service centers. They have access to phone teams who are licensed, trained individuals. They have access to our financial consultants, our wealth consultants, the full set of everything that you just heard about from Jonathan. This is also very self-reinforcing because we take everything that we're able to provide in retail and use that as an anchor of our value proposition as to why we're really well positioned to help sponsors or these corporations achieve what they want with their plans. Now with Advisor Services, we have a very different but also quite powerful relationship. We extend the solution set for these individual advisers to be able to compete on their own and serve their clients' needs. The retirement spectrum that I talked about and the Stock Plan Services, they work with small businesses who have those needs. They also are looking for, as you heard about from Jon, ways to grow their businesses and their practices, and many of them are building up retirement consulting arms. That means they go design these plans with the companies, and they need a vendor. They need a partner who can provide those services, and we're one of them. Again, we have a mutually reinforcing dynamic here. Today, about 60% of our new business referrals come from an adviser who has a wealth management relationship. Now this flywheel is today very powerful. And I have a couple of statistics here that demonstrate that. Every year, we introduced about 400,000 new households to Schwab. These are individuals who we have never worked with before, and we only have the ability to talk to them because we got that planned relationship. They're already working with us because they sit at that employer. And this number is so large, not because plans are coming and going, but because those companies are growing. They are hiring. And of course, there's a natural employee life cycle as part of that. Also today, more than 1/4 of our participants have another relationship with Schwab. That's a result of us obviously having the sponsor relationship, but equally importantly, the strength of our value proposition in our other 2 businesses. And finally, when assets leave the plan, 50% of the time, those individuals choose to keep them with Schwab. So you can see this is a very powerful flywheel. Stand-alone, we're performing well, and we're also doing a great job supporting these other 2 businesses. Part of the reason for this is the strength of our value proposition today. We are known for service. We are known for client centricity, and we are known for being a trusted brand who's on the side of the individual investor. And I think these numbers really speak for themselves. When I say service, in the workplace context, it means how are we working with HR executives, finance executives who are administering these programs. And our teams show up with ownership, with integrity, with expertise and with credibility. And when I speak to our plan sponsors, this is consistently the top thing that they tell me about what they value and what they value in our relationship. Our client Promoter Score, again, with those corporate individuals is 80. That's industry-leading. We also have the same participant service value proposition in the workplace channel that we do in our retail channel. We pick up the phone when someone calls more than 90% of the time in 60 seconds. You get to talk to a licensed trained individual who knows how to talk to you about everything, your plan capabilities, everything -- excuse me, your retirement needs, things that are outside of your plan. And their ability -- they're able to do that is something we're going to continue to stay focused on. And then we're recognized in the industry. Planned sponsor is one of the many industry consortiums. And for 9 years running, we have been the #1 -- excuse me, we have the most #1 best-in-class awards across the recordkeeping set. Those categories include participant experience, sponsor experience, record-keeping platform and investments and fees. So we're starting from a very strong position. However, what I'm most excited about is the opportunity that we have ahead to do even more for Schwab and for the participants in those plans. Let me start with what's happening in the broader market and why there's a lot of opportunity for us to compete. First of all, the retirement space and the equity space, these are sizable and growing and deep markets. I'll start with equity. It's about $3 trillion today in granted and unvested awards, and that is expected to continue to grow and expand. Most of the large public corporations already offer this, but they're increasing who they're offering it to with their employee base. More than 85% of plan sponsors say they anticipate this continuing to grow, especially with stock market valuations where they are, it's the way that employees participate in the success of their companies. So a very similar story on the retirement side. It's about a $13 trillion market and something that employers really do view and employees expect as a core part of their benefits package. People are also looking at multiple different plan types. We're seeing an increase in the number of sponsors who are offering more than one type of retirement offering. So that's one big thing happening in the market. The other change is that sponsors today are asking for help with their employees on financial wellness. That means help them understand their benefits, help give education, help give context, help give point-in-time advice and give them the ability to execute, to invest right alongside their benefits. And this is a shift. About 90% of plan sponsors today say this is very important to them when they're thinking about who the partner is they're choosing to work with. That's up from more than 5 years ago, it was around the 60% mark. So again, we're seeing a real shift in the market. And then finally, what are employers asking for from their partners and from their providers. They really want simpler and more integrated experiences. They work with a wide set of different vendors across HR benefits. And as they think about how they're being asked to do more with their resources, they're increasingly looking for places that they can simplify. So given that's what's happening in the external market, you can see why Schwab is so well positioned to compete and to win in this space. Our value proposition is to be an integrated provider. We will help you with the full set of your retirement solutions, however many plans and whatever type you need. We have a set of equity compensation solutions right alongside wellness. That's the guidance, that's the service. That's the ability to help those participants understand and take advantage of their benefits and the ability to invest alongside. All of that is underpinned by who we are at Schwab and how people recognize us and associate us with what we stand for in the broader market. I want to share something that really brought this to life for me. I visit our corporate sponsors regularly. And I made a visit out to ones on the West Coast, a technology provider, and they have a retirement plan with us and a stock plan. They chose us because of that integrated benefits offering as well as the wellness. And I had a few interactions. One thing that I saw happen was a meeting between our service teams, the relationship manager and the corporate service teams with their HR partners. They were planning for this company's largest vests ever. They were performance-based awards, and they were planning how could they actually communicate that to participants, how could they make sure that our phone teams were aware and available, and how could they make sure that operationally, it went flawlessly. It's a real dynamic of collaboration and a partnership. Then I went down the hall, and I saw one of our corporate financial consultants. So someone who is trained just the way every consultant is in the branch network actually physically sits on site. It's an office just like any office on a corporate campus, but it says Schwab, and this individual is there every day. She sets up appointments, 3 to 4 a day. She has her door open when people want to come ask questions. And she shared with me while I was there, the last meeting she had an individual, a mid-career engineer had come and said they were trying to figure out how to manage their overall tax situation. And she took that, had a dialogue with them and set up a follow-up to do a full planning, which, as you all know, is really the entry point into a lifetime and much broader financial relationship. And then finally, I met with our the CHRO there, who I speak with fairly regularly. And she shared with me that they want us to be an extension of their team. They're viewing this as a long-term partnership, and that's something I'm going to continue to work on with her. So a ton of opportunity ahead. Now I'd like to share with you how are we going to go capture it. Here's the plan. First, we're going to go out into the market and win more of those sponsor relationships. I see several avenues of growth for us to go after, and I'll give you a couple of examples of that. One is the way that these retirement plans are sold in the broader market is through advisers or consultants. And you'll recall that I shared that almost 60% of our referrals today are coming from ones where we have a broader relationship with Schwab. We're going to them and saying, we'd like to team up. Are you growing and this is a focus area for you? And are you looking for a preferred partner that you'd like to grow with you? And we can tailor our service model, our sales model, our coverage model with them to help them grow and earn those relationships. Another example of something that we're doing to win stock plan business is we're going earlier in the company life cycle. We're going to go -- we've recently launched a new offering that you've heard about on some of our other earnings calls called PIES, Private Issuer Equity Services. And this is cap table management for companies that are approaching IPO, but not there yet. And by establishing those relationships earlier and promising to convert them seamlessly into their public market capability alongside retirement, alongside advice and education, alongside investment support for their employees, that's a very compelling value proposition. We're going to make it even stronger by adding Forge into the mix. As you know, we've recently closed that transaction. And we can use their relationships as well as their offering to meet with those private company CFOs and talk to them of a suite, stock plan management, retirement, liquidity solutions for their employees, wealth management. Very few providers can do that in the market today. The second part of the plan is increasing the engagement with retail. Now as you've seen, we're already in a very strong starting point, and I believe we can do so much more to bring everything that we have in retail into the workplace. It starts, of course, with digital channels. That's often the first place that people interact with us, and we are wholly integrating this experience into our Schwab digital properties. On one example you just saw in the last session, the Schwab Assistant. And you may have noticed one of the skills on that was talking about stock plan and RSU capabilities. That's going to help our participants get more engaged and drive them to live channel where we can start a broader relationship. We're also doing a lot to optimize that in-person and live engagement. We know that when someone calls into Schwab and asks for a consultation when they say, I'd like to have a meeting with your advice team, they don't have a relationship yet. But after they talk to one of those individuals, 50% of the time, they take an action. So we've got to find ways to be in front of people at the right time and get them the guidance when they want it. So those are the 2 plans for growth, win more plans and let's get more retail engagement from these relationships. We have a few key enablers where we're investing to be able to do that. The first is on our core technology platform. The bar is always rising. These plans are getting more complex, and we'd like to be able to do more with those administrative features and functionality and meet those sponsors' needs. We've increased our technology capacity in this space. We're going to continue to stay focused on that. We're also working on further strengthening our relationship model. As you saw, we already have a CPS score of 80. We're in a very strong spot. But what we'd like to do is lean into those relationships and bring them more value, be more proactive with other ways that we can introduce Schwab, including our financial wellness support. And finally, talent. This is a service-led business. And as you have heard me say, this is one of our main differentiators. I'm very focused on making sure that we can attract the talent and continue to foster that. Even if an individual is not in a client-facing position, they're supported by a team who's helping doing the solutioning that is. So with that, I hope this gives you a sense for how well positioned we are in the workplace business and how much potential we have to be a larger part of Schwab's growth story. And with that, I'll open for your questions.

Steve Wharton, JPMorgan. Obviously, a large competitor has been very successful in workplace and generating net new asset growth. They did 2 acquisitions over the years to help build it. I'm just wondering, as you think about your growth plan, like how hard is it to dislodge existing workplace providers? Does your strategy require acquisitions? Just give us a little bit of color on the dynamics on how fast you can make this happen in light of a very intense competitive dynamic that already exists.

Thank you for the question. So let me start with the planned purchase dynamics or the sales cycle, so to speak. So it's -- though we can sell these on an integrated basis, sometimes they do come to market differently. In the retirement plan space, these plans tend to come up for bid or review at least every 5 years. They have a fiduciary obligation. So there's a natural catalyst for it to come to market. We do come up against a wide range of competitors. This is a more fragmented space. And we, in that situation, are really leaning on our differentiators, service, financial wellness, who we are as an institution. On the stock plan side, it's a little bit different. The reason that these plans come to market, we are finding is when there's been a service issue with another provider, these are operationally complex things to go after. So it's not uncommon. They do come up for bid. The best place to establish a relationship, however, is pre-IPO because any time you go through a conversion, it's an experience for the HR team. It takes work, it takes care for the employee experience, and you're placing a lot of trust in the provider to expose your employees in that way. So the opportunity for us in Stock Plan is going after the places where we know there's been service issues and then going earlier in the life cycle with PIES as I was talking about. To answer your question on acquisitions and how do we think about that, as with any strategic opportunity, we are always looking at build, buy or partner, and we're going to continue to evaluate that. What's the best capability? Time to market, expense, all the things you would imagine. We are very pleased with our ability to bring PIES to market more quickly because of a partnership that we did with Capita, who is a recordkeeping software provider. We are the front end. We are the sales team. We are the service team. We are obviously the financial wellness provider, but we got there more quickly by using someone else's existing record-keeping software.

Brennan Hawken, BMO. I'd be interested to hear maybe some more specifics around what your goals are around driving the growth, right? Maybe what percentage of net new is your business today across Schwab? Where do you want to get it to? Or if the idea is maybe market share, where you are today in the various businesses and where you want to go?

Sure. Thank you. So let me start with just where we are in the market today. On our largest businesses, Stock Plan and Retirement Plan Services, Stock Plan, we're a top 4 provider, and it's a much more concentrated set of competitors. So when things are coming up for bid, we've got a real opportunity to be in front of that. On the retirement plan side, we are one of the smaller providers. If you look at the defined contribution league tables, we're a top 10 provider. The space, however, is much more fragmented. It's not that every time something comes up for bid, you go to one of those same core competitors. So our advantage in that space based on our value proposition is really finding ways where we can get distribution advantage. We want to be included in the RFP processes where we're a good fit for those providers. And that's why I mentioned we're so focused on the retirement consultant dynamics and building growth partnerships with those individuals. Then in terms of the results that I'd love to see from this business, it's too early for any specific NNA numbers. But what I will say is we are very focused on 2 indicators as we think about growth. One is the plans that we're bringing in, which directly results in NNA on a stand-alone basis. And the second is how are we introducing those clients as relationships to retail. How many households are establishing a relationship that they didn't have before. And those households, how are they bringing assets and consolidating their broader relationship with Schwab. So those are two things that I'll be looking at pretty closely going forward.

And we'll take one final question.

Rick Roy from Jefferies. Maybe just expanding on that last part of your answer. If you could dig a little bit deeper into your strategy for capturing the assets held away once these Stock Plan participants do choose to vest with Schwab Brokerage and going after perhaps the broader portfolios that might not be on the Schwab network, if you could expand on that.

Yes. Thank you for the question. So the way that we are establishing those relationships is using the multiple channels that we have developed through the retail organization and being in front of those individuals at moments that really matter for them. So if you think about the digital experiences, the way that we're communicating with them through e-mail, the live channel conversations where they call in and ask a question about their plan or about how they're thinking about their broader financial life and then when they're coming to the in-person channel. So those are the 4 ways that we get in touch with them. We are using -- who you're going to hear from next, our Chief Marketing Officer. We're using all of the marketing techniques that we have in other places to make sure we know when there's something happening and that person may be open to broadening their relationship. Just one small example of this. We know that when an individual onboards into a plan, that's the highest moment that they're open to thinking about their financial life consistently. There are many others through the process. But there's a little bit of money in motion, right? They're thinking about their financial relationship. They're enrolling. They're making decisions that they previously haven't. Something else that we're working on across the board is embedding advice very early in that discussion. When you lead with helping someone think about how to solve their problem, that's what leads to an established relationship over time. Great. Well, thank you very much for the questions. It's great to spend the time with you all. And I'm going to bring up my colleague, Stacy Hammond, our Chief Marketing Officer.

Hi, everyone, and I'll add my thanks to being here in Texas with us. It's a privilege to get to have this conversation. And I would like to thank Rick and Jonathan and James and John and Adele for giving a master class and why I say to my team all the time, there has never been a more exciting time to be a marketer at Schwab because our value proposition in the market is winning. And there's only upside from there. We should be a bigger company. And it's literally our job definition to get to bring that value proposition to market so we can bring it to more audiences, and we can bring more dollars to Schwab. It's also a privilege to get to see a lot of the marketing that we create have already appeared before I even took to this stage, and that is because I am in the business of supporting the enterprises. I support their growth by bringing that value proposition to market. But we're going to focus on today is how we do that, the strategy behind that. So it's one thing to say we're an engine of growth. It's another thing to prove it. I generally prefer to prove it with data rather than claims and conjecture, although I've been known to do the latter as well. But clearly, marketing is foundational to our enterprise growth, and we are consistently able to drive growth for the enterprises even with a declining marketing spend as we would have expected post synergy. So as you heard from Jonathan, we acquired more than 1 million new retail clients last year and the profile of those new clients is fantastic because we are able to acquire more affluent clients, more traders and more younger investors. It would be one thing to be winning among any of those audiences, but our ability to win across all 3 of those audiences really proves the point that our value proposition is broad in nature and resonates with a wide range of investors, opening the aperture for future growth opportunity as well. So clearly, marketing drives meaningful growth, but the way that we do that is through a very disciplined and consistent strategy. We do it through channels where you expect to find investors. We talk about that through paid, which is when we literally pay someone else to tell the story that we want to tell that could take the form of advertising would be the most common paid activation. We have what we call owned channels. These are like our home. These are the things where we decide the content that goes into those channels, whether that is our LinkedIn profile or whether it is schwab.com or Advisor Services. And then we think about earned media, which is what other people say about us because they've had the opportunity to experience the value proposition that you heard our other leaders talk about earlier. And we are constantly innovating across those channels, which I'll talk about a little bit more in a second. So I've already talked about how our value proposition is incredibly broad and resonates with a broad set of investors. However, in order to be efficient, we have to be incredibly disciplined about the audiences that we pursue. We call these our design targets. Our retail design target, we talk about in terms of a psychographic rather than a demographic. A psychographic is how somebody thinks like their mindset. And some of these characteristics, I think, will probably sound familiar to you because I imagine all of you are very driven. But these are people who share their DNA with Schwab. They are people who are optimistic. They are people who are engaged. They are incredibly accountable and they approach their financial life with one hand on the wheel. We serve our independently minded financial advisers who want the flexibility, as John demonstrated, to deliver the best possible outcomes for their clients. And also, as Adele just referenced, the plan sponsors who champion on behalf of their employees and shape those organizations into a great place to work by getting their employees on the path to financial wellness. The strategy that we use is comprised of 3 components. The first is measurement. The second is innovation, and the third is creativity. And for the next few minutes here, we're going to double-click on each one of those. So we are going to start with measurement. And fortunately, my colleagues put a lot of the creative assets that we produce already on the screen. And you might expect that a marketing presentation would start with a lot of creative. We actually start in marketing from a place of measurement. We are relentlessly analytical about how we approach every single dollar that we spend, and part of that is enabled by our marketing mix optimization model, which is an econometric model that looks across more than 60 different touch points. It looks at things that we control like how much we spend. And it looks at things we don't control, like the market environment, what's happening with the S&P 500, and it looks at what our competitors are doing. And it assigned partial attribution across all of those touch points so that we can optimize how we spend in channels like TV, in print and in audio. This is an incredibly valuable tool as we optimize our media spend every single year, which has led us to be able to achieve a 15% increase in our return on ad spend, which in this marketplace where we see less people watching advertising is a testament to the fact that our advertising is incredibly efficient. We also use a multi-touch attribution model to combine the placement where you place the ad with an understanding of the messages that we're putting into that ad. So the multi-touch attribution model combines creative and placement and allows us to optimize in each individual channel. A good example of this is something that we call native advertising. This is like if you're on Investopedia or you're on a site and in the right rail, you'll see content that looks more like embedded content than it does like an ad. And what we have found is that when we pay to place our education in those placements, we get tremendous engagement because people are already in a place where they're learning, they see our paid education. James referred to some of this earlier today. They come to schwab.com, they learn, and we find that leads to much higher intent lower down in the funnel. As I said, we optimize our media spend every year, and you guys consume media and you're probably watching way less cable if anybody in the room even has cable, then you are watching TV on Hulu or whatever your subscription of choice is. And so we shift our spend to match consumer behaviors and put our advertising in the places where we see the greatest efficiencies. Watching Hulu is probably not the biggest surprise, but one of the ones that we actually see a lot of consumption among especially this driven audience is in podcast. So we've seen a 4x increase in our investment in podcast. Not surprisingly, people who are curious and naturally leaning in are listening to a lot of podcasts. 10 years ago, 70% of video content was consumed live. And today, it is 70% is consumed streaming. So it's completely inverted over the past 10 years. Not surprisingly, probably consistent with your behaviors, we see magazine consumption down by about 50%, and I'm convinced they're all in dentist office. And we see prime time viewing down by about 60%. And the reason why this has such an impact on us is it used to be able to -- you would buy a TV ad on friends and half the country would see your ad. It was fantastic. It was a fantastic way to reach people. But with the proliferation of content, you have to be much more targeted about where you go because those broad-based channels simply don't have the same efficiency. Shifting to the innovation pillar. I'm excited to share some of the things that we've been doing in marketing, starting with an activation on Twitch. I want to be very clear that we -- actually, let me start by -- with a common knowledge check here. How many people know what Twitch is? Okay. More than I expected. I won't ask how many of you are active users on Twitch because that feels revealing in a way that you might not want other people to know. So Twitch is a platform where you can watch other people game. That sounds endlessly entertaining if you're my 18-year-old and 16-year-old. And we did an activation on Twitch with Michael Iachini, who is here at Schwab. We gave him the designation of Chief Board Game Officer, and he actually created an entire game of Catan where he taught people about the principles of investing. Not surprisingly, games like Catan, games like Minecraft, those are all about resource allocation. They are about planning. They are about diversification, and they are wonderful places to learn about the world of investing. And so while the people who participate in the live streams on Twitch who have random names like Trader Tagrog and things like that, well, they may see random, their engagement on this platform is incredibly high. This is not about us going to a gaming platform in order to gamify investing. This is about us going to a gaming platform to go to where people are engaged and engage them in the Schwab brand and teach them in a moment when they're already leaning in. A new activation that I'm excited about on YouTube, we're going to be doing Market Miles, where we've worked with a financial influencer to go for a run in Central Park. And she is going to hit up people in Central Park who are also running, and she's going to talk to them about finances as they run. I've seen the first sneak peek of the content, and it's actually fantastic. We'll have a diverse group of people, some of whom know nothing about investing and she can help educate them all the way to people who are really experts, including our very own Kevin Gordon. So some really fun and innovative ways to go to where people are. People are changing their behaviors. Every example that I just gave you, if you noticed, was on the phone, people are engaging on their tablets, and we see this in our client behavior as well. So how we think about reaching our clients has to change as well. So we're continually innovating in our digital experiences to ensure that we're getting the incredible product innovations that you heard from my team members earlier. We're getting those innovations in front of clients where they are. So we had more than 2 billion digital interactions last year on mobile and web. Twice as many of them were on mobile as they were on web and 40 more times were digital than live. So the way that we can reach our clients and scale is by delivering digital experiences where they get exposure to the things that we have to offer. What you're looking at here is our newly launched App Store. So our app until fairly recently was a transactional app where you could do things like place trades, raise with money. And now it is a place where you can also learn about everything that we have to offer just like you could on our web experience. Jonathan referenced earlier the teen account, which my 16-year-old is highly engaged in, and I'm not looking forward to doing that tax event when we get there. But TeamSnap. How many people know what TeamSnap is? I know who have kids simply by who raised their hand in the room. TeamSnap has over 30 million people who use their app to manage their kids sporting event. It is how you know where your soccer tournament is, what time you need to arrive. It is all parents who are highly engaged. This is all about going to high engagement areas where people are already leaning in and then showing up there with a Schwab message. We will be there with the teen account. Interestingly, when we ask teens and parents, about 70% of teens are really interested in investing. My 16-year-old is in that 70%. And about 73% of parents say it's incredibly important for teens to be -- to think about investing. And that may be the literal only example of a place where teens and parents are literally aligned. 70% of teens are interested and 70% of parents want them to be. We are showing up in social media as well. We're building brand awareness and delivering our education by working with influencers, and this is across TikTok and Meta and Instagram. Whatever the reel is that shows up in your feed regularly, it's probably something that we have worked with an influencer on because the idea, again, is to show up in a way that feels relevant and modern to the investors that we are trying to reach. A great adviser example here is we did our first advertising campaign on Reddit for advisers because advisers use Reddit to source from other independently minded folks, how they might think about turning independent, which custodians they're thinking about. And we ran a campaign on Reddit that was in the form of New Yorker cartoons. It was one of our best-performing campaigns we've ever seen to get brand-new advisers to engage with us because we went to the place where they were naturally engaging, and we serve them creative that was contextually relevant. A fun activation that we did around the holidays. We were the first financial services company to create Amazon boxes that showed up around the holidays in people's home, over 1 million homes. And the idea wasn't to sell Schwab, it wasn't to sell crypto. The idea was to create a moment of delight and create a deeper connection to Schwab. We actually saw this show up in social media, where existing clients, if they got the boxes, we're excited about the fact that the holidays, they felt a deeper connection to Schwab, and we saw it show up among prospects as well who were delighted by the idea that Schwab was creating a positive experience in their life. I think you heard from James, we have a robust podcast library. We referenced earlier, our audiences are very engaged in podcasts. We have a 78% completion rate, which is about 20% higher than the industry average. And the range of topics really speaks to the different audiences that we are engaging with. In fact, Choiceology has over 7 million downloads. If you haven't listened to it, it's a great listen on your plane ride home, highly recommend. We're continually testing new formats, including on YouTube. In fact, last year, investors watched about 300,000 hours of YouTube content from Charles Schwab. We are the #1 financial services provider on YouTube. 300,000 hours is basically the equivalent of a single human watching our YouTube channel for 30-plus years. It's a lot of content consumption. And the reason why we do this is it's an incredibly scalable channel to get -- to educate people and to build trust when they're in the moment when they really need us the most. And of course, we work with different modalities in the YouTube channel. There are some very detailed, very trader-heavy-oriented, deeply technical trading strategies all the way to, I want to buy my first stock. And as you can imagine, the presentation of those two look fundamentally different. It's also a fabulous opportunity to get our Schwab Center for Financial Research experts out there sharing their point of view. We talked earlier a little bit about AI. And clearly, LLMs are changing the way that investors interact with all companies, not just Schwab. I would start by saying that we still see 84% of searches happening in Google. 84%. So while we talk a lot about LLMs, the vast majority of searches are still happening in Google. And about half of the search results in Google are AI-assisted or Gemini assisted. We see about 8% of searches happening within the LLMs. So a couple of examples that you're seeing here on the screen. So the first is who is a trusted brokerage firm, and it's a little blurry on the screen. So I'm going to point out to you what's up there. So you will see us cited first in the AI overview. The way you get cited first is by having authoritative content. Authoritative content means you have robust content that other parties have also referenced, thus creating authority in the space. You will see us in the snippets on the side, leading with some of the awards that Jonathan referenced earlier. And recently, Google within their financial services vertical finally launched paid advertising within their AI results. So soon, you will see Schwab advertising show up in their AI-assisted searches as well. What was playing on the left -- I'm actually going to go ahead and go back, so you can see it as I talk. What is playing on the left here is what are the best trading platforms in ChatGPT. The good news is the very activities that make us incredibly successful for search engine optimization have given us a massive head start as it relates to answer engine optimization. So you'll see Schwab show up, way to go James, as the #1 trading platform. And that is not only about clearly being the authoritative source. The best thing we can do to show up as #1 in these recommendations is to deliver an exceptional client experience every single day. Creativity, third on the list of things that we talk about in marketing. Creativity is informed by what I talked about earlier, which is a deep understanding of our design target. I'll talk a little bit about 2 of our ad campaigns. I love that John already introduced Schwabvious. Schwabvious is a campaign that launched last year that signals to the marketplace that we are the obvious choice for -- to be the custodian for advisers. We're excited to extend it this year to go beyond the custody, as John likes to say, and ensure that our advisers are aware of everything that we have to offer in our wealth services offer. Our retail advertising is consistently the most recalled ad in the category. That is in large part due to our foil Carl. Carl is a broker that we invented in 2015 to stand for what we do not stand for. He is a very handy foil to allow consumers to see what it is that we offer, and he stands in stark contrast to that. He is memorable because he's a little bit of a doofus. We can be provocative when we stand against him. And the best part is the clients and the ads always look like the hero. The client speaks on our behalf. Carl can never provide what Schwab can. And when you can get a client to speak on your behalf rather than you telling an audience, it is always more engaging. And finally, several of us talked about this last night, but we have a fantastic partnership with the PGA, and we have worked very carefully to ensure that every activation across all of our golf sponsorships delivers in a way that is uniquely Schwab and uniquely creative. Starting with the prize for the Charles Schwab Challenge, if you're not aware, is a car in addition to the financial payout. And when we first did this and Kevin Na won, the car was a Dodge Challenger, not surprisingly, for the Charles Schwab Challenge. And Kevin turned around and handed the keys to his caddy, which might have been the most social moment we've ever had at Schwab. But the idea that he was willing to give the car away to his caddy created a talk track well after the Charles Schwab Challenge. This year, the prize is a 1982 Jeep Scrambler. We always choose the year to signify something in our history. 1982 is when we first introduced 24/7 order entry. And if you would like to commemorate 1982 on your own laptops, you'll find at lunch stickers of the Jeep scrambler that you are welcome to take home with you. We are also bringing golf into other avenues. I talked earlier about how we have to show up where investors are. We are showing up on major content platforms, whose name I'm not allowed to say yet, but we are doing in-scene integration. So imagine you were watching a fictional TV about golf. We will be the presenting sponsor of the golf tournament, again, showing up where people are engaged. And then finally, if you haven't had a chance to watch our challengers videos and you're into the golf, I highly recommend that you can find them at schwabgolf.com, but it allows us to celebrate the spirit that we celebrate at Schwab of people who are really invested in the game, people who are deeply engaged in something they are passionate about and people who are willing to take on a challenge to make something better. And finally, Rick referenced this earlier, our brand is deeply trusted. Our brand also has to stay modern and relevant and consistent. And we are in the process of updating our visual identity to deliver a much more unified and human client experience that will future-proof the brand as we go through some of the digital transformations that we just talked about. This is an evolution, not a revolution, I should say. If you're looking on the screen, this does look very different than what we are today, but not in a categorically different way. But what we want to do is create a cohesive brand experience so that in every single touch point you have with Schwab, we are reinforcing that sense that builds deep client relationships and will allow us to grow. So I will end where I began, which is it is a privilege to be a marketer at this time at Schwab because the value proposition that we bring to market is winning. And we bring that value proposition to market so that the enterprises can grow at the rates that they've shared with you. And there's only upside ahead of us, and it is our responsibility to ensure that we step with a big leap into that opportunity. So I will now take questions.

Mike Cyprys of Morgan Stanley. So you talked about how consumer behavior is evolving where it's tougher to reach the vast audiences as compared to years past when people watch cable TV so much. Can you talk about how the cost of client acquisition is evolving in response to that across the industry and at Schwab? And as you look out over the next 5, 10 years, how do you see that cost of client acquisition evolving? Maybe you could also touch upon how you see the lifetime value of the customer also evolving with that?

Yes. Let me take the cost of acquisitions first. So there has never been more competition for dollar. I think you heard Jonathan referenced this as well, which inherently drives the cost of acquisition up. And it is the analytics that we use that has been able to drive down our cost of acquisition, combined with an outstanding value proposition. I actually think you could have all the analytics in the world and buy all the best media in the world, but if your value proposition was terrible, you have nothing to share and you wouldn't be winning. So the cost of acquisition is going up. We've been able to drive it down with relentless analytics and through an outstanding value proposition. In terms of long-term value, we tend to prioritize based on our audiences. So you heard me say earlier in the retail space, affluent and trader, which clearly have very strong LTVs relative to other potential audiences. And so when we think about -- I referenced earlier that multi-touch attribution model, one of the things that it gives us is actually funding over time in addition to account open. So we're able to optimize all of our placements, not only to acquire quantity, but also to acquire quality, which also informs LTV. Hopefully, that helps.

All right. Let's just take one more.

Mike Brown from UBS. So Schwab's brand is built on trust, education and accessibility. But agentic AI tools are now kind of making the financial guidance feel more instantaneous and maybe kind of free from the provider. So how does the marketing strategy evolve when the human plus technology message becomes increasingly harder to differentiate? Like what are you kind of -- how are you kind of approaching that evolving competitive landscape?

I love that question, and anybody who knows me knows that's a little bit of my soapbox. So I think a couple of things. First of all, I think agentic AI is actually great for investors. We stand for democratizing information. We stand for easy and quick access. So in many ways, the fact that you can ask a question about your finances and get a quick answer or you can ask what your wealth contribution limits are is great for investors, and it encourages their engagement. So in many ways, to me, this is making the experience of engaging with financial services companies, honestly, easier. So it is a rising tide in some ways. That said, on the slide that I showed about AEO, we have to ensure that we continue to show up not only as one of the most cited sources, but also as one of the most recommended companies. cited sources is mostly within our control. And what I mean by that is we can do a lot of optimization on our side to ensure that we are structuring data in a way that is easier for the LLMs to be trained on it, that they can update it frequently. We can ensure that we have a robust amount of content because LLMs are like hungry cows. They just want more input. So we need to produce content that the LLMs will want to consume. So being an authoritative source and showing up first is actually something well within our control. The second component of that, which is about the experience is I believe that more and more investors will allow LLMs to do the cognitive processing, which means we, as a brand, will be delivering a part of the experience that is less rational and more something that you feel. We all make decisions today not only based on the left side of our brain, but also on the right side of our brain. And I think you see that in our CPS scores. I think you see it when you go down the Schwab rabbit hole on Reddit. This is people raving about our experiences. And that is how we will show up in the #1 rankings. So it's a combination of the two. It's continuing to deliver exceptional experiences. And I would argue even raising the bar on those, which is what the team talked about today, but it is also ensuring that our content is structured in such a way that the LLM can consume it, and we continue to be an authoritative source. So I think we're out of time for questions. There were a couple more hands up. I will be here for lunch, which is happening next. So I think we're back in here at 12:30. A couple of things. Please do, if you haven't had a chance already, check out some of the showcase on the left over here, where we're demonstrating some of the things that you heard about in the prior presentations. And I will, with that, send everybody to grab some lunch. Thanks, guys. [Break]

Hello, everybody. I get the coveted after lunch spot. I hope you all had a great lunch and enjoyed a little bit of refreshment and a little bit of conversation. I'm excited to be kicking off, I think, what I'm going to call our deepening section of the day, which is where we're going to talk about our wealth advisory, our banking, lending trust, investment product section. So I'm going to talk a little bit about wealth advisory, banking and trust to start. And then my colleague, Andrew D'Anna is going to come up and talk a little bit more about the investment products area and some of the emerging products there, and then we're going to do a Q&A together. But I'm excited to be here and see some familiar faces over the last -- what, several years, I've had the privilege of being able to share with you all the exciting things we're doing at Schwab. And I think the last time I did this session, we were pretty early in our transformation around some of our wealth management areas. And I'm excited today to be able to show you some of the progress that we're making as well as with 1 of our dear colleague, Paul Woolway retiring, we're taking the opportunity to bring the banking and trust organization a little bit closer to wealth management because of some of the synergies that we see. So I'm going to be talking a little bit about that, too. So as I go through this presentation, I hope the things that you take away today are that clients are increasingly first looking to Schwab for these types of products and services. It's no longer the case that they think of Schwab as a transactional platform. And that's been the case for many years now is our retail client base, but you also heard John this morning talking about how our RIA clients are looking to us for more than custody. This is a trend that we see, and it's fueling a lot of demand. And that's why when you see our growth rates, you see, of course, the growth that we see across the industry and our growth rates tend to be higher because we see more and more clients attracted to the Schwab value proposition. The other thing you're going to see is the growth is accelerating. And it's always nice when your boss steals your thunder. But Rick shared a little bit about some of the statistics this morning about just how quickly we're seeing the growth. And we're really still early in this journey. And that's my third point is that we really are just scratching the surface. I think that's what I'm most excited about is when I think about the size of the opportunity in front of us, $12.7 trillion of assets and our opportunity to serve more and more of the needs of our clients through great value, great quality, great service solution. It's really exciting to see. And we have the opportunity and we have their trust so we can innovate on their behalf. So just to set a little bit of the landscape of what are the capabilities that we're talking about here. We have managed investing, which you all know is a big part of our deepening and how we deliver value-added service to our clients. And the 2 biggest offers there are Schwab Wealth Advisory and Schwab Advisor Network. We also have, of course, Schwab Intelligent Portfolios, our robo offer as well as proprietary SMAs. But this is a category that's growing quite rapidly, and I'll spend a little bit of time on that. We also have Specialty Wealth Services. And I think if some of you had a chance to go visit the Wealth.com folks in the back, we have a couple of my teammates here who are -- are sharing a little bit about the capabilities that we're introducing. But this is really important because these Specialty Wealth Services are often the entry way to enrollment into managed investing or deeper relationships with Schwab. So tax trust and estate financial planning, charitable giving, income solutions, all kinds of specialists that help our clients understand more about what it is that Schwab can provide and get their needs met so that they kind of have a deeper and longer-lasting relationship with Schwab. And then on the Banking and Trust side, of course, our lending solutions. You heard about Pledged Asset Lines and the growth that we've had there, but also mortgages, HELOCS. There's a set of capabilities there as well as, of course, our trust services and deposit products. And we're proud for, I think, the eighth year in a row to have won the J.D. Power award on our investor checking account. So lots of great momentum across this landscape. But let me start with managed investing because that is really a story that we are very excited about. And like I said, I was here just a couple of years on sharing with you the type of investment and transformation that we're trying to drive here. This gives you a sense of just the type of growth that we've seen in managed investing over the last few years as we've been focusing on this area. And I would take your attention to the size of the dark blue bar there because what that is, is the amount of flows that are going into our full service managed investing offer. So what we see is that not only do investors want more advice from Schwab, but they want holistic advice from Schwab. And this is a trend that we're seeing across the industry. We certainly see it here. And what that results in is over 90% of the flows that are going into managed investing are going into 1 of these 2 holistic wealth offers. That's exciting because that means that there -- these clients are trusting Schwab with their entire relationship with their whole life, essentially. And not only do we see tremendous growth in both of these offers, you see they're both of 25% year-over-year. But we also see incredible client satisfaction. And that's that -- we talked a little bit earlier from our colleagues talked about the fact that when we deliver great products, great service, great value, our clients become our biggest advocate. And that's really how we continue to grow the franchise and continue to grow this business. The net flows number for Schwab Wealth Advisory and I'll dive into that a little bit more with what Rick was highlighting. Just a few years ago, that was a fraction of that number and it's grown pretty significantly. And what that -- it has been a result of is a transformation and investment that we've been making in Schwab Wealth Advisory. It has been really an investment that we knew would pay off, although I will admit to you all, it has paid off probably even more quickly than we anticipated. The quarterly flows that we're seeing now into Schwab Wealth Advisory are about triple what they were only 18 months ago. So it's really an acceleration that we've seen. And we continue to have more and more investors enroll in that offer. And I would say, be delighted and deliver that 88 CPS score. How have we done it? We've invested pretty significantly. And we've invested in digital capabilities. We've introduced a discretionary offer. We've actually expanded locally. So some of you might have the history here, but this was an offer that was always hybrid or virtual. So we had our wealth advisers located in 4 locations across the country. We're now in 20 markets, actually, we'll be in 30 markets by the end of the year, which does a lot in terms of building that local relationship with clients in all the affluent markets that we want to be in. We've also invested significantly in sales and wholesaling and distribution. This is something a few years ago we actually didn't have a business development function supporting Schwab Wealth Advisory. We now do and it's proven to be quite successful. And that business development function, by the way, has the opportunity to develop relationships with our financial consultants on the side of the RIAs working with our relationship managers but also being able to educate clients directly on all the various solutions that we bring. And that's why 1 of the interesting things we see with Schwab Wealth Advisory is not only do we see flows coming in and satisfied clients at Schwab Wealth Advisory. But Schwab Wealth Advisory tends to be the highest consumer of a lot of our other products and services. So for example, Schwab Personalized Indexing, our direct indexing offer, 40% of the flows that go into Schwab Personalized Indexing comes through Schwab Wealth Advisory. Or Pledged Asset Lines, about -- even though Schwab Wealth Advisory households only comprise about 1% of overall Schwab households, they comprise about 10% of originations of Pledged Asset Line. So when you have this holistic relationship with the client, you're able to not only satisfy their needs, but you're also able to introduce them to other solutions across the Schwab spectrum. The other thing I would say is we've been hiring. And actually, last year, I think we hired over 200 wealth advisers across many markets. Again, we're hiring about at that pace this year given the growth that we're seeing. And all that hiring goes to support the relationships and the types of interactions that we're trying to deliver for our clients. I'll talk in a few minutes about how we're scaling that growth as well, which is really exciting when you think about what we can do with digital, automation, AI and all of it together. But I will also point out 1 other specific on this page, which is the economics. This is really good for clients. When they deliver us an 88 CPS score, we know that they're happy, but this is also really good for our business. The ROCA of these clients, the average ROCA of the clients that enroll in Schwab Wealth Advisory is 3x what a typical self-directed investor delivers to Schwab. So happy client is paying us an explicit fee and also helping us drive diversified revenue growth. So as I mentioned, Schwab Wealth Advisory is also an entree into Pledged Asset Lines and mortgages and other lending products. But the great thing is we're seeing momentum across the board when it comes to our lending products. And when it comes to Pledged Asset Line, the investments that we've made over the last few years, whether it's reducing the cycle times to under a day, I think right now, the average is 0.7 days, is actually what it is for cycle time, increasing the eligibility. So we made separately managed accounts, for example, pledgeable assets. We're in the process and have just started rolling out the structured asset line, which allows alternative investments to be pledgeable. Those enhancements have really opened up the flood gates in some ways to more and more advisers and retail investors being attracted to that offering. And especially if you think about what's happened in equity markets is a really attractive way for our clients to be able to get access to liquidity. The other thing is when you look at the consumers of the Pledged Asset Line, it's pretty balanced actually across the retail client base as well as the RIA client base. We see engagement and opportunity in both. And I'll talk a little bit about the penetration numbers in a minute here. Mortgage also is a great opportunity for us. You can see also double-digit growth there. And obviously, that moves around a little bit with rates, but we continue to see a lot of engagement for our clients there. There, we've actually launched the ultra-high net worth experience. So to improve and create a little higher touch experience for investors who want -- who need that and are engaging with us on the mortgage side. And then I'll touch on the trust side as well. We haven't talked as much about trust in some of these forums. But if you think about the demographic trends and the growth of estate planning, trust plan and kind of generational wealth transfer, the trust part of our business is something that we think is a real opportunity. And again, as we've been having more and more engagements with tax trust in the state, we kind of are often in the position to introduce our trust services capabilities. And right now we have that opportunity again across the retail client base as well as on the RIA side. So it really is a very synergistic opportunity as we continue to grow our Wealth Advisory and have the opportunity to bring more of these banking and trust products into the fold as well. So as we look forward, I won't spend a lot of time here, but I think it's important to kind of think about the kind of just the secular trend that we see that really is the tailwind behind a lot of the growth that we're seeing. The demand for advice, sometimes I talk about the willingness to pay for advice and we see that willingness to pay has grown dramatically. But we were just looking at some of the most recent data. And it really kind of -- if you step back and think about why do we think this growth is sustainable, it's because more and more investors need help. And that willingness to pay number, which only a decade ago was about 38% of affluent investors willing to pay for advice is now 68%. So in the world of AI, where you can get all this information by plugging in your data into cloud and for your positions and all of that, more and more investors are saying, I want help. I want guidance, and they're coming to Schwab for it. And by the way, over 80% of those investors tell us that they want a one-stop experience. So that goes back to our value proposition. We're bringing wealth, banking, investing, trading altogether can be so powerful. Andrew is going to talk a little bit about product solutions, so I won't spend much time there, but that is something we continue to hear from our investors as product solutions and the sophistication, personalization. Again, something that we're very well positioned for. And then I get excited about the wealth tech ecosystem because I think what it allows us to do is introduce new capabilities to our clients and that buy-build partner equation that we do every time, we have more and more opportunities to partner to license to invest in companies like we did with Wealth.com to be able to bring more capabilities to our clients, whether they are a retail investor or an RIA. And as I mentioned, we're just scratching the surface. This is, I think, the most exciting slide to me because it shows you just how small our share is when we think about some of these areas. So on the left side of the slide, right now, we have about $840-or-so billion you saw in management investing assets. It's a $37 trillion market, and it's grown by the way, by 8% or so a year. So a huge opportunity. If you look at all of retail managed investing, it's like 2%. So it's a huge opportunity for us when you think about, again, that secular trend and our ability to capitalize on that. We've actually doubled the organic growth rate that we're experiencing in that area. So we have a lot of opportunity still ahead. And then when you think about lending penetration, someone asked the question, I think, earlier today around lending penetration across our client base, we have about 0.5% of lending penetration. Competitive benchmarks kind of -- it's hard to find, but what we see is around 4% industry average when it comes to lending penetration. And when we see a client, especially an RIA engaged with the Pledged Asset Line, for example, we see that once they engage 1 client and they're like, Oh, this is really a great solution. Oh, let me engage another client, and it really builds quickly. So today, about 23% of our RIAs have engaged in a pal, but that means that could be as little as 1 client so far. And so again, when you think about that opportunity, that leaves a lot of opportunity for us to continue to engage the RIAs, as well as help them educate more and more of their clients about the opportunity with a product like PAL. So let me talk quickly about where we're headed and why we're so excited about capitalizing on that opportunity I shared. First of all, we're going to continue to expand and invest in the offering. And there, the priorities are around bringing new capabilities into the wealth management space. I talked a lot about state planning, actually tax planning is a real opportunity for us, and there's some great capabilities that our colleagues at Wealth.com have introduced that we will be introducing into the Schwab Wealth Advisory experience. We're doing a lot -- Jonathan talked a little bit about segmentation, well specializations, ultra high network, lots of opportunities there that we're investing in. I would say on the banking side, I mentioned the structured asset line. But the other one I mentioned is, on the registered independent adviser side, we are making it easier for our RIA clients to engage in banking relationships with Schwab. In the past, historically, there hasn't been as much connectivity between the RIA platforms and our banking platforms, and we are working aggressively on fixing that and kind of filling that gap so that we can continue to drive more penetration there. Awareness. That is a big opportunity for us. You saw the numbers. We have a lot of clients at Schwab who are excited. We have a great CPS score. We have a great value proposition. We have to build awareness. And some of that is about getting into local markets. Some of that is about leveraging Stacy Hammond and her team and how we market and get very segmented and targeted about how we reach clients who might have a need or life event. Some of that is actually about really targeted and successful distribution and sales and wholesaling efforts, which, again, as I mentioned, we've grown pretty significantly over the last few years. So there's a lot of opportunities in growing awareness. And then finally, I would say, scaling and supercharging. And this is where technology and some of you know, I have a background in digital, I get very excited about the opportunity of when we bring the digital capabilities, automation and AI. And a supercharger human talent, it changes the game because now our advisers can do so much more, have deeper conversations, spend more time asking the question behind the question. And less time doing leading prep and documentation and trust document that would have taken 2 hours to review now takes a couple of minutes. I mean it's amazing what we can do. And just a testament, it's really important that our advisers have a great experience as well. Just a testament to how much this is all helping. We do a rep experience score as well as we all do the satisfactions for our clients. Our rep experience for our wealth advisers has gone up 21 points in 2 years as we've been investing in these capabilities. So it really is kind of a virtuous cycle as we invest in these capabilities to create a better experience for clients as well as a better experience for our advisers. I will just end by kind of bringing it all together because I really think this is such a big opportunity when we think about how large we have. I call it that within the Schwab House, we have a big pond right within the Schwab House. And that's not even counting the $37 trillion market that's out there. We have a lot of opportunities to continue to bring awareness to our products and services, and we're going to continue to transform those products and services to make sure that they're meeting the needs of clients. The other thing is we have a proven record over the last few years, we've really been able to show how, as we engage clients and we actually meet their specific needs and the way that they want them to be met, we're able to convert them into an enrolled client into a managed investing offer or engage them in a PAL or a mortgage. And then finally, our value proposition, you've heard this across all day. I think is really unmatched. And a lot of the things that are important to an investor who's a self-directed investor are also important to an advised client but it's actually a higher bar, if you think about it. If you're willing to take advice from someone, you really better trust them. And that's where I think we have a unique spot here and a unique opportunity to capitalize on. So with that, I'm going to hand off to my dear colleague, Andrew D'Anna, who's going to talk a little bit about investment products, and then we'll come back for Q&A. Andrew?

All right. Thank you, Neesha. Fantastic to be here with all of you. I'm Andrew D'Anna. I've been at Schwab for more than 10 years now, but I'm a new face on the management committee. So meeting you -- meeting many of you for the first time. I lead an organization focused on our investment platforms, solutions and strategy. And while Neesha just spent a lot of time talking about what we're doing to deepen client relationships with our wealth solutions and our banking solutions, I'm going to pick up where she left off and focus now on our investment products and platforms. And similarly, talk about what we're doing to grow and expand the shelf to meet the ever-evolving set of client needs that we see. While also thinking a lot about how we continue to enhance monetization of the scaled platforms that we already have. Hope in the time that we have together you come away with a couple of takeaways. The first is that the breadth of our product platform really matters. And that we're using that breadth to drive growth and revenue diversification and as an important tool to deepen clients with our -- and their relationships. In a world where Rick talks a lot about the bull market for convenience, in a world based in convenience, it's really important that we offer our clients the tools that they need, all in 1 place. And when we do that, we know our clients are rewarding us with more of their assets and more of their loyalty. So we're seeing a lot of momentum in clients doing exactly that as we've expanded our product suite in a number of areas. Next, I'm going to talk about our priorities for where we're going next. And here, we're really thinking about where the puck is going. And we're making targeted disciplined investments in the places that we see our clients' needs evolving, too. And with those investments, we're going to take advantage of the growth that we see in those areas. And finally, around monetization. We see a meaningful opportunity to monetize the scaled third-party platforms that we have already built over time and we're working in a disciplined way to do that, and I'll talk a little bit about ETF monetization that's undergoing -- that is underway right now and other areas, we're going to take that strategy next. So let me start with our -- how we drive earnings growth through the cycle. And you have all seen this in a number of presentations. And I want you to come away with why our product suite really matters and helps fuel -- to fuel this cycle. And the first is around how our product suite helps us drive and acquire new clients. Quite often, our clients tell us that of all the reasons they come to Schwab, the breadth of our product suite is one of the most important -- and one of the things that brings them here for the first time. But more than that, often our investment products are some of the first experiences that our clients have, whether that's using our ETF or mutual fund selector to build a portfolio or a whole suite of tools to build a bond ladder and many other resources. This is often the very first interaction our clients are having with us. But more than that, it's a really important part of how we deepen relationships with our clients over time. And this is all about being there as their life changes and evolves and their needs evolve with them, again, enabling them as they grow to consolidate more of their investment activity with us at Schwab. I met a client at a panel a few weeks ago. She had been at Schwab for 30 years. I wish I could have brought her on the stage with me because I asked her how our experience with Schwab evolved over those 30 years, and what she said just perfectly captures this point around the importance of our product platform. What you said was, to her Schwab is a lot like the Tesla Financial Services. We have a model for every phase of her life. She said he started with us and something like her Model 3, buying individual stocks and bonds on the platform. As she grew up and maybe outgrew that Model 3, she opened a 529 accounts and began to work with more sophisticated ETF and mutual fund solutions. Eventually, she was tired of doing it on her own and she opened a Schwab Intelligent Portfolio account. And that enabled her to start doing more and more of that by herself. She's now in the space of transitioning into retirement and thinking about how do I take this growth portfolio and turn it into one that I can de-accumulate and live off in my retirement. She's actually working with Neesha's team and is working directly with a wealth adviser. And actually, it continues to be taking a lot of the products off our shelf including Wasmer solutions for income and is even thinking about some of our alts products. I think that story is playing out across our 30 million client base every single day and is reflective of the mission that we're on to help and serve clients through that life cycle. So why this product breadth matter? I think we're really proud to offer 1 of the largest, most comprehensive platforms in the industry. And if Schwab was a supermarket of solutions, this is really our investment product aisle. And on it, you should expect to find anything you can find out there in the investing universe chances are we have it in -- somewhere on this aisle, whether it's proprietary, advisory solutions across managed portfolios, direct indexing, digital advice or a whole suite of mature third-party product platforms in alts, ETFs, fixed income, et cetera. And increasingly emerging product areas in private markets and digital assets, which I'm going to cover in just a few minutes. We really aspire through this menu and through a combination of build, partner and buy to really be a place that we are able to give our clients the tools to meet their needs throughout their entire investing life cycle. And the breadth of this portfolio is really translating into a really meaningful momentum. And we're seeing that across the board. First, third-party mutual funds and ETFs. They continue to be a core building block for so many of our clients and advisers in how they build their portfolio. And we today have grown to almost $4.6 trillion and remain one of the largest and most mature platforms in both of those asset classes. SMAs continue to be an asset class that more clients are looking to for personalization as well as tax-efficient strategies and much more. We have grown nearly 30% over the last 3 years on our SMA platform, which is a combination of our proprietary and third-party solutions and have reached almost $600 billion in asset size on that platform. And finally, alts become an important part as clients of portfolios as clients look for outsized returns and the diversification that comes with mapping private markets again in a portfolio with public markets. And we have seen really outsized growth in that space, almost 40% over the last 3 years, reaching over $90 billion in assets. And I'm going to talk a little bit more about what we're doing to accelerate more of that growth in the years to come. But it's not just third-party solutions that is driving this growth. We are increasingly seeing an openness among our clients, and you've heard this from Neesha and others as well to look to Schwab solutions to meet more of those needs. And we're really seeing it across the board. We look at Schwab Personalized Indexing, our direct indexing solution, helping clients with tax-efficient strategies. It grew almost 80% year-over-year. As clients continue to look for help in fixed income, our Wasmer strategies have been a fantastic solution and have been growing rapidly, more than 20%. And more than 10 years after launch, our Schwab Personalized Indexing -- sorry, our Schwab Intelligent Portfolio solution, our digital asset solution is continuing to grow at more than 20%. These are not ultimately niche offerings. All these together represent scaled client demand for advice and personalization and really represent where we are going in the products and solutions we've built. So we haven't been standing still, for sure. And a lot of this momentum is the result of the disciplined investing that we've been doing to improve our platforms and expand them to meet more of our needs. And we've been doing a lot. Last year, we, of course, launched our retail alternatives platform, Schwab select, Schwab Alternative Select. That platform, we've more than doubled the number of funds and is driving strong growth this year. We're making similar investments on the AS side, both expanding the fund offering in alternatives as well as making important investments in the digital experience to make it easier for advisers to access those funds. We've also meaningfully expanded the universe of institutional share class funds available on our no-transaction-fee mutual fund platform for institutions. We've now -- that now exceeds more than 2,000 funds available to those clients. And we did a lot of investments in our AS business and the platform that they have available to them, especially in more complex products. You heard from Rick and you heard from John, what we've done to make sure that we're open for business and available for clients in new and emerging areas like long/short strategies, and that's an area that we're committed and investing to support our advisers to grow. But you all know the industry is moving fast, and we are focused on where the puck is going. And I think we're -- that means 2 things in terms of our priorities in the investment product space. The first priority is focusing on where client demand is evolving and emerging, and beginning to make investments in those areas so that we are ready to scale as that client demand emerges and grows. There are 3 areas of focus that I'll talk about in the next few minutes. The work we're doing around alternative investments, what we're doing in private markets and of course, with our launch of spot crypto, what we're doing in the digital asset space. We're also focused very much on our monetization strategy, as I said, and I'll talk a little bit about where we are with ETF monetization. So let's start with alternative investments. So this is clearly an area of dramatic growth across the industry, and one that we see ourselves today as underpenetrated in and have a meaningful opportunity for upside growth. Really estimates that the retail and the wealth channels will be the fastest-growing segments in alternative assets, and that will reach $3.7 trillion by 2029. We have an outside opportunity for growth, though because of where our penetration is today and where we see it potentially growing. Retail investors tell us that more than half of them believe that they will have more than a 5% allocation to alts by the end of the decade. We are just getting started in the launch of our retail alts platform, and that will give us an opportunity to capitalize on that growth. On the AS side, only 35% of our advisers have an alts exposure on our platform today. At the same time, our average allocation to alts is about 1/4 of what the industry average is in the RIA space. Both of those statistics mean that we have a lot of upside as there is underlying momentum and growth in this asset class to also outpace that growth as we improve penetration. Private market is a subset of alternatives and another area that we see meaningful opportunity. There's been a number of articles in the news about big IPOs coming up that you won't be surprised to know we're driving a lot of interest in energy in the pre-IPO space. But beyond client demand, I think I'll -- I want to focus on the mission that we've been on for the last 50 years that Rick talked about earlier today, which has really been oriented around democratizing investing for the average American and the average investor. And we've done that in so many ways to increase access, lower cost and add transparency. And as we look at the private market space and the pre-IPO space, what it looks like today and how difficult it is to invest in it, it is a ripe opportunity for us to take that playbook that we've executed so successfully in the public markets and now apply it to this new frontier. We, of course, acquired Forge Global and announced that and closed earlier this year. That's a key step in helping to accelerate against that mission. Forge brings us a lot of capabilities like a digital platform for trading private shares, like an asset management team that has been building private market funds, like the whole data research and education environment that will allow us to together build private market offering in a way that we're really proud of that represents how we build product for Schwab. If you combine that set of capabilities with the 5 -- more than $5 trillion in assets on retail, the more than $5 trillion of assets in advisory services, that gives us a tremendous opportunity to scale that business. And ultimately, the big goal is to change private markets for the better. In addition to private markets and alts digital assets, no surprises. A meaningful opportunity. We have had a crypto offering and offered our clients access to digital assets in a variety of ways over the years, whether it be futures, options, exchange traded products, we are -- we have more than 20% market share in some of those products today. And so it's been an area that we've been in for a number of years. However, the last 18 months, a lot has changed in the industry. We started to get more clarity on the regulatory side with the GENIUS Act passing Congress last year, the CLARITY Act now making its way through Congress. Lots of pilots are beginning to mature in the industry. The pilot with Nasdaq on tokenized equities, more and more consortiums coming together for things like tokenized deposits. These developments are giving us the additional clarity that we need to begin to move more deliberately into this space. And we are also in a tremendous position to do that, given the scale and experience and trust that we've built with our clients. So the investments we're making right now is going to lay the groundwork. So as client demand begins to emerge in some of these spaces, we will be in the opportune position to move deliberately and that speed. And not surprisingly, there's a lot of areas that we're looking at, like stablecoins could potentially be another way that clients move digital assets inside and outside of Schwab. As we launch digital assets, we're going to, of course, be looking through our bank to potentially lend against those assets. In our asset management business, we're going to be thinking about how tokenization might enable us to reach new clients and show up in new markets. And through all of these, the same approach that we've taken to all of our investment products will apply. We're going to start with what our clients are asking us for and where are the true benefits, and that's what's going to drive our prioritization as we work through this space. Spot Crypto, of course, is our first proprietary entry into the space, and I'm really happy to be here this week because just earlier this week, we introduced our very first clients to our spot crypto offering, and we are on our path for general availability later this year. We're really proud of what we've built in spot crypto because I think it represents that Schwab way of delivering products, combining a trusted brand with a proven track record in a space where security matters so much. Coming out the business with competitive and transparent pricing, becoming one of the lowest priced competitors to enter of our major competitors and offering a solution that is tremendously transparent in the way that we price with only a commission and no spread. And then finally, what our clients are really looking for from us is the convenience. The convenience to buy and hold their crypto assets in the same place as the rest of their investments and the integration that we're doing across our platform is going to enable our clients to do that. I end with monetization. We talked a little bit about the variety of places we're going to think about monetization and ETFs really represent our nearest-term opportunity. As I shared earlier, we are a scaled player in ETF. We have more than $2.5 trillion in ETF assets on our platform, and we have more than a 20% market share in that space. It's also an area that we're delivering tremendous value to both our clients and the asset managers that we partner with on those platforms, ranging from the technology and platforms that we have in place, the service that we provide our clients, the research and data that we provide, the data we provide our asset managers, we're generating tremendous value for both the asset managers and our clients. And this effort is really about rightsizing the economics that we see when we look at that platform and aligning it better with the value that we believe that we are generating in that business. As we approach this opportunity, we see a lot of rights to win not only did we execute a similar strategy when it came to mutual funds several years ago. We also continuously see the environment more and more moving in the direction of shareholder servicing in the ETF space as well with a number of our biggest competitors already forging ahead with programs similar to what we're thinking about. We have started conversations already with our more than 400 asset managers on the platform, and we have firm commitments from some of our closest partners. I expect those conversations are going to continue through the course of this year and material impact will begin to start in 2027 and then in the outer years. Mutual funds are the place we're starting, but it's not where we're going to end when it comes to monetization opportunities. We see similar opportunities in both the alts space as well as the SMA space as we think about the playbook that we're executing in ETFs. In both of these areas, our strategy is going to be similar. We're going to think about investments that we can make to deliver outsized value in the way clients are accessing our third-party platforms. And with that value, we're going to create economic models to ensure that we're capturing our fair share. And just in case John didn't say it enough times, this is what I think it means to go beyond custody. This idea that we're going to be investing in value-added services and using those services to drive our growth and revenue diversification. So as we turn now to Q&A, I'm going to invite Neesha back up to the stage and maybe just land 3 takeaways for you. One, our product breadth, we believe really matters and is a core feature in how we fuel our growth, and how we deepen relationships with our clients. Two, we're being really deliberate in investing where the puck is going and getting ahead of where we see client demand emerging and ensuring that we are in a position to win as those trends play out. And finally, monetization matters. And we are making deliberate efforts to ensure that we are driving durable long-term value creation on the third-party platforms that we've built and are now running at scale. So thanks. I'm going to invite Neesha up, and then we will kickoff Q&A.

It's Brian Bedell, Deutsche Bank. Maybe a question for Andrew on the alternative side. Can you talk about some of the differences in the cadence of your growth plan for the retail alternatives on the Schwab platform versus the one in the RIA channel. I believe the ones on the Schwab platform or maybe potentially faster monetization or I shouldn't say faster, but of longer-term stronger monetization potential, but does that require getting into mass affluent usage? And if you could just talk about the cadence of growth of this RIA channel versus the retail channel and alts?

Yes. I think similar to the strategy I was laying out a few minutes ago that our modernization strategy is aligned with the value that we're creating on these platforms. And if you think about our retail platform relative to our adviser platform, retailers where we are going the furthest in building a curated shelf that we've done the full degree of due diligence on the funds and putting ourselves in a position to actually recommend those funds to end clients. It's also where we have built a team of specialists that support client conversations in this area and a whole ecosystem of education and support to ensure that our clients are being well served by that platform. That's different than the advisory context, where mostly what we're doing is we're supporting advisers in playing that role for their clients, and we're building value-added services to make it easier for those advisers to access those platforms. And what that means is the economic opportunity that we have on the retail side is more meaningful. To the question about do we need to go all the way to mass affluent to realize that opportunity, we are just scratching the surface on that opportunity. As I mentioned, our penetration is, it gives us a lot of upside on both the retail as well as the advisory services side. And our current focus on retail, at least at $5 million and above gives us a lot of runway for growth before we begin to expand that further and do more to democratize the asset class.

Jacquelyne Cavanaugh with Putnam. While I appreciate Rick's comments at the beginning that the concerns around cash sweep are potentially [ missounded ] or unfounded. I am curious how you're thinking about is your thinking on monetization of products or offering changed? Because it feels like for a long time, Schwab built functionality to create stickiness, client customer acquisition, grow NNA and maybe there's things you've offered is that you can go back and take another look at how do you monetize them? Are you monetizing them sufficiently. And how is the thinking around new opportunities? Has it changed at all as a result of sort of this more recent fear? Or has it been sort of steady state as you go?

I would say -- and maybe I'll start and Neesha, please jump in. I would say it's changed. I'd say it's accelerated in part because of how fast the industry is changing in some of the areas that I talked about. And I think, two, it hasn't changed because still, I think we're still grounded in the same core approach of starting with what our clients are asking for and where we believe we can create unique benefit for them to meet their needs across their life cycle. And that is what's guiding us into the areas that I talked about. And it continues to be the area that we're primarily focused. They are -- I'd say, where we are evolving is the level of complexity and sophistication of new products that we are building. Neesha, I think you said we are not -- in any way, a plain vanilla platform, and our clients are coming to us asking us for some of the most sophisticated things that they can find anywhere. And with that, that has us looking more carefully and more deliberately about building ecosystems around alts, around private markets, in a way that we can really bring what's unique to our value proposition to those new areas. And so that's probably another area where we are changing and evolving as we accelerate.

The only thing, Jackie, I might add is that, I think the other opportunity, as we introduce new capabilities, we look at kind of the cost of that capability to provide it, right, versus the value created and where it's a labor-intensive capability, right? We may think how do we potentially preserve this capability for a relationship, experience, Schwab Wealth Advisory. If you think about Wealth.com and a lot of things we're doing for introducing them into Schwab Wealth Advisory. It doesn't mean that some of those capabilities, we may not introduce to self-directed investors but we're being very thoughtful and methodical about thinking about the scalability and back to Andrew's point, the need of the client. And if you're a $1 million client, do you actually need that capability? Or is it better for you to enroll in a holistic offer and then you get access to that experience?

The presentation was near and dear to my heart. So I very much appreciate the words of wisdom. So Ken Worthington from JPMorgan. So really on ETF access and marketing fees, ETF managers don't want to pay these fees. Do you anticipate ETF fees initially being on sales? And if so, how long does it take to transition these fees to ETF assets? That's sort of number one. And then number two, are you partnering with some asset managers to help them build ETF share and assets and are you willing to charge fees similar to what Fidelity is charging that might irritate your clients initially to demonstrate Schwab's value proposition to the ETF managers?

Both good questions. I think on the first part, we're approaching this as [ in spirit of ] partnership with partners that we have had, asset management partners that we've had working with us on this platform for many years. Without going to the specifics of the each negotiation, I think what I will say is all of them are going to be a little different. We're going to approach them based on what the asset manager needs and is looking for. But at the end of the day, expect we'll walk away from those negotiations, feeling like that we have captured a share of the economics that aligns with the value we're creating in distributing their funds. As I said, we are at the beginning of the process of engaging those asset managers but are beginning to have a lot of early traction with commitments from some of our biggest partners. And I think no surprises given what's already happened elsewhere in the industry that many of them have been expecting this conversation from us, and so not surprised at all that we'll now be getting it. To the question about fees and how we would introduce fees. We're thinking about all of the levers that we have in these negotiations, both the carrots and the sticks to make sure that we deliver those outcomes. And we're also doing it through the lens of the value proposition that we ultimately are also protecting around low-cost simplicity for our investors and also choice, offering choice for our investors. And we're confident that we'll be able to balance both of those things as we come out of those negotiations.

David Smith from Truist Securities. Neesha, you spoke to a big gap in lending penetration for Schwab compared to some of your bank competitors. Is there any expectation that Schwab can fully close this gap over time? Or is there just a lower ceiling given the different business models here. And how do you rank putting out new lending offerings versus just driving increased awareness or other methodologies in terms of the importance for you to keep closing this gap?

Yes, let me start with the second part of your question first in terms of capabilities. I think we feel pretty good about the capabilities that we have. And the investments that we've made over the last few years, especially, again, around eligibility, the quality of the experience, you think that's really kind of created kind of best-in-class products and the facilities that we have there. It doesn't mean that we won't explore others if our clients are asking for them, and there are some opportunities that we hear about occasionally. But I think we feel very good about the steps that we have. A lot of the focus now is about awareness and building the experience, as I mentioned, make sure it's easy for RIAs to engage with these products. But given the rate of adoption that you're seeing in the growth rate, we think that we've hit the mark on that. And so we're going to continue focusing on that. With regards to your first question on penetration. We don't -- I think you know Schwab, we don't set product goals, we don't have targets. But I would say that there -- the market is enormous. And given the fact that only 23% of the RIAs that work with us even have a single power with a single client, there's a big opportunity. And I think between the RIA business as well as our retail business, as I mentioned, the distribution is actually quite even. We have a lot of, as you know, very wealthy clients in retail with very concentrated positions where this is an extremely attractive offering. So I think we feel very confident about the level of penetration we can get to. And hopefully, it will look a lot better the next time you see that chart.

All right. I think that was our last question, and let me get the pleasure of releasing you all for a short break, and we'll see you back again at 1:30 PM. [Break]

Coveted spot right after lunch -- I have to cover the spot right after break and before the CFO you want to hear from. So I will try to keep you entertain until then. I'm the Chief Technology Operations and Data Officer. I've been with Schwab since 2014. I've been the Chief Information Officer since 2016 and recently moved into this role earlier this year. And glad to be here. Thanks for coming. I wanted to talk a little bit about how our priorities and technology align to the context you've heard today. There's a lot more, of course, in technology that are priorities, cyber, et cetera. This is really about how we fit into the discussion today. And that first is how are we an enabler of growth, how do we support clients. We are technology operations and data, these single large support function for the client-facing enterprises. Everything from build and technology to operational support, to data analytics, et cetera, is in this organization. We are prioritizing efficiency. And by doing that, we've actually had a series of transformation programs happening across the organization. Mostly to do 2 things: one, find direct savings; two, find capacity unlock or people capacity unlock that can be applied to new initiatives and new business priorities. Of course, the savings can too, and you'll hear a little bit more about that from Mike, but he makes a decision whether that goes to the bottom line or into investments. But the goal for us in technology is to self-fund as much of the new things that the company wants to do as possible. We have a pretty diverse road map. And in that road map, we've got to do everything from efficiency, scale, support growth, do innovation, launch AI, all the things you've heard today and seen, we've got to be able to support. And in doing that, we're having to find balance around run, grow and optimize spend. You'll hear Mike talk more about this. But within technology, what we're having to do is really balance those competing interests to make sure we're returning those savings, building all the new cool things you've heard about today, as well as running all of this support apparatus behind the scenes. So maybe a quick detour on why TOD? So this is not really an unusual structure in financial services. It's not unusual for Schwab either. We've been structured like this before. If you remember Joe Martinetto, these functions were under his umbrella at the time. But what we've seen now is that particularly with AI, particularly with the things you've heard that we're trying to do, these functions are moving together at breakneck speed, I might add. And so we brought them together to be better integrated, scalable to break down some of those silos that might exist and really be able to service the business, drive growth, continue to drive momentum. So Andrew showed this slide as well. Maybe I could go through this quickly to tell you how we are contributing to earnings growth. Serving a growing number of clients is clearly something we've been doing for a while. Going back to the TD Ameritrade integration, we were preparing for years to take on a whole new client set, almost a client set the same size as ours, frankly. And in doing that, we had a really big challenge. We weren't just moving and migrating assets and client accounts. We were integrating 3 trading platforms into our ecosystem. We were able to step back, re-architect, completely change our data center footprint and really build something that scaled during the pandemic when no one could really predict what was happening with volumes. It's something that could scale to meet just about any demand. And what's worked out very well is we've reduced the amount of expense it takes to do that scale. So when we've got to meet new volumes, we're much -- we're applying much less new expense to that than we were in the past. So we had a great opportunity, and we took that to build out a lot of scale, a scale advantage, I would say. But we came out of the integration. And of course, after spending the better part of $1 billion to do the integration, we had to tap the brakes. Technology has been on a huge kind of build bender, if you will. And what that meant was we had to now come in compliance with what the firm was committing to the Street, which was mid-single-digit annual expense growth. Well, tech has been growing a lot faster than that. So we really had to come into compliance quickly and slow down after -- it was really hard for tech after a long build cycle. So we've been able to do that, been able to bring our annual expense growth down in those figures, and we've continued to do that since integration, which is, of course, helping overall with spend. But because we're returning and constantly finding savings through transformation programs, we're able to still spend more in technology but without increasing the budget. And then deepening existing client relationships, we feel like a lot of what you heard today, we built a lot of what you heard today, the operations team support the TOD organization is very much in deepening the client relationships by virtue of what we're doing to support the business. So maybe a few examples on some of these priorities. So the first one, supporting client growth, pretty obvious. I will go into a little bit more detail on that. Enabling efficiency, enabling growth through efficiency, I should say, and then driving scale. So let me kind of walk through each one of those. So Jonathan mentioned that really one of the things that helps client growth is resilience and availability of our systems. And resiliency has been good. We did have some bumps after TD Ameritrade. We recovered from that. And as you can see on the right, recent volatility and what I was talking about with the scale that we were able to build, we've been able to handle that and be there when our clients needed us most. Now it's always great to have the growth we've seen from '24 to '25, having 18% more logged ons, 31% daily average trades. That's fantastic, but where we really have to perform is making sure that in those pretty massive peaks that we can support the client. So talking about enabling growth through efficiency. One of the things that we're trying to do is understand and measure both savings and efficiency. And of course, one of the best ways we can do that is looking at our cost per account. Rick mentioned this quickly in his slides. He didn't provide as much data. And this is enterprise-wide data. So this is not broken out by organization. But as you can imagine, the TOD organization is a significant contributor to cost per account. So one of the things we do is monitor how we're affecting cost per account at the same time that we're seeing significant asset growth, significant account growth. In the past, we would be a much bigger contributor. Accounts went up, assets went up. We saw a corresponding increase in tech costs, in particular. But now what we've been able to do, and you can see we had -- there's a tail from TD in '23, we've been able to start to bring down that cost per account and maintain it at flat. And of course, our goal is to continue to bring it down. And the TDA tail is important because a lot of that build-out I talked about, I mean, clearly, there's D&A associated with that. How have we done this? Because in many cases, that tail should show us continuing to go up. We actively manage all of our compute. We're removing things from the data center from the floor when we need to. We're actively managing cloud consumption, AI consumption. We're doing things like setting up the GCC in India, which I think Rick mentioned as well. That will completely change our staffing model and reduce costs. Operations is removing paper from a lot of its business processes and flows, which is actually a big deal in our industry. And of course, we're trying to do a lot more with AI, which I'll talk a little bit more about. But our transformations, we think, is working because it's showing results. And of course, this organization can move the needle on cost per account. So we see that this is a big win. Driving scale through employee productivity and evolving client experiences. We are all in on AI. We do see it, as you've heard many times today, as a scale advantage for Schwab for our business model. And there's a lot we are currently working on, as you've heard today, and hopefully, you've been able to see. But there's a few things I wanted to mention specifically about what's happening with AI that is beyond just the products and helping our reps. We are, from an enterprise perspective, rolling out capabilities. So Microsoft Copilot is with all employees now, playing a significant role in building fluency, AI fluency across all of the employee base. GitHub Copilot, which is the software development tool is out with all developers. We've actually rolled it out to a lot of people in the business who work with technology as part of our big changes in our operating model, which we've evolved to ensure that our tech and ops work with the business, aligns with the new world of how we're going to assess and build things in AI. So we've got a couple of enterprise tools there. We've got smaller ones as well, but we've even allowed Copilot users selectively to have additional capabilities to build apps, to build agents within that ecosystem. So lots happening on the enterprise front besides the things on the list that you saw and you've seen throughout the day. What I think is really interesting, and Rick mentioned that I had this number is our CTO, Tim Heier, who's leading a lot of the AI work, I think he would tell you, man, we were making a lot of great progress in '25. I thought so. But to look at what we've done from '25 into Q1, 4x the amount of usage of LLMs is a significant lift and shows, I think, how committed we are to what we're trying to achieve in AI. So maybe to close things out a little bit, I mean, we are clearly an enabler of the business. We are the supporting apparatus. We have a significant impact on bottom line. The savings that we're drawing from our efficiency and in our transformation programs is being reinvested or moving to the bottom line. That is, by the way, that's not just something we're doing this year. That's a 5-year program. We have commitments out 5 years. A lot of that's being driven by AI. And of course, it's a complex world to try to do all of this plus all of our new product development, but it's certainly something we're trying to achieve. And thus far, we are. So maybe with that, I will open it up to questions.

All right, Dennis, we're going to start with one from the web console. How should investors think about your technology modernization priorities over the next few years? What's changing in terms of platforms, architecture or ways of working? And how will you measure progress?

There's a lot in there. So yes, let me start with modernization in general. So modernization, I get this question from the Board and actually from even some of the -- our employees. Modernization is no longer a milestone or single event. It is a constant. So everything we're doing to manage our environment takes continuous monitoring. We have an entire planning process that looks at nothing but modernization needs and legacy technology. So that is just the way we operate, standard operating procedure now. What we're doing in terms of other priorities, if I heard the question correctly, we've clearly got a number of initiatives around transformation in how we work. That was one part of the question. AI is changing some of that, just good process and methodology is changing that. And so we're completely changing the way we work. In fact, if you look back just a few years when we were doing TDA, we are working, planning, funding activities much differently than we were. Most of that is driven by what we're trying to do with AI. But also, we started some of this journey several years ago. I think I hit the big items there.

How do you think about AI risk and containing it? And it sounds like it's a constant battle, but how are you addressing that?

Yes. It's a very important question. So in the world of Mythos now or I should say the post Mythos world, we're working hand-in-hand with our vendors. Most of the large vendors that are in Project Glasswing testing Mythos are partners, vendors of ours. So we're having conversations with all of them. I think there's a couple of things we're doing specifically internally to prepare. One, we know there's an onslaught of patches coming. In fact, online, I think it's being called vulnerability apocalypse, we're going to -- we are completely changing our patching processes to adapt to what needs to happen now in hours or days instead of potentially weeks, months, which is the case today. Active conversations with the rest of the banks, all the way up at the CEO level as well as down into our security organization. And there's a lot of best practices that the industry is sharing, most of which we all engage in that we've all doubled down on. So whether it's scanning our systems and our code, whether it's checking vulnerabilities across what are massive tens of thousands of servers in our environments or going to cloud providers and making sure they're doing what needs to be done, all of that we are on top of. The one thing that I think continues to be a risk, though, is we're at the mercy of -- actually, I'd say there's 2 things. We're at the mercy of the vendors to patch their issues. And so we're going to have to understand prioritization of those vulnerabilities and do that patching. The second part of this is it's not just about Mythos. I think any frontier model now is looking like it's going to be a risk. This is coming. And I think we all knew in technology, this was coming, just coming at us a lot faster than we anticipated. So we are certainly fully engaged and have all hands on deck. Okay. With that, I'm going to introduce our CFO, who you really want to hear from, Mike Verdeschi.

Good afternoon, everyone. And welcome again. Thank you for spending the day with us here in Westlake, Texas. We appreciate everybody in the room making the trip down. We know that's a big commitment. So thank you very much. Those that have joined us virtually, thank you as well. We appreciate your participation. We are in the home stretch. This is it. So last presentation, and I'll get through this and look forward to your questions as well. It's hard to believe it's been 2 years since our last Investor Day. And the reason I say that is when you heard from all of my colleagues today, it's amazing how much we've accomplished in just that short period of time. We're doing so much for clients. We've had so much success, new products, new experiences and the same exceptional industry-leading platform and that same differentiated client service. All of that comes together and has helped us deliver record financial results. To wrap up today, we're going to talk about why Schwab is so compelling. We believe no one is better positioned than we are for the future. So let's dive right in. We've got a lot to cover. So we heard from everyone talking about all the innovations, all the priorities that we're doing. We'll talk about how those pieces come together to drive not just revenue growth, but diversification as well and how that growth is profitable based on how we manage expenses in that balanced fashion. We'll talk about the deliberate steps we've taken to improve the durability of earnings through a range of environments and how that feeds our financial formula to drive strong earnings growth through the cycle. Our financial formula. It is quite straightforward. It starts with our through Clients' Eyes strategy and has helped us grow organically, new clients coming to the firm, asset gathering and clients are doing more across our platform. As they do more across our platform, we are deepening our relationship with those clients as they embed themselves in our platform. That gives us strong revenue diversification as well. We are investing in scale and efficiency. And of course, we've taken actions to enhance our capabilities in managing the balance sheet to support durable earnings in a range of environments, and we've also returned capital in multiple forms. All of that comes together to drive strong earnings growth through the cycle. Over the past decade, that focus on clients, new clients coming to the firm, engagement across our platform has delivered strong financial results, mid-teen percentage growth in revenues as well as earnings per share. And of course, the steps we are now taking to improve the durability even further. This has been enabled by the evolution of our platform. That evolution has been based on organic investment as well as targeted acquisitions to give us an industry-leading platform across wealth, trading, banking, asset management, including now digital assets, alternatives and even private shares. This industry-leading platform supports over $12 trillion in client assets, over 47 million client accounts is going to continue to power our financial results in the future. So within our financial formula, we'll cover revenue, expenses and of course, the balance sheet and capital as well. So let's just touch on 2025 revenue for a minute. Key drivers continue to be strong engagement from clients. And those near-term revenue drivers has been the momentum in lending across both our bank and nonbank platform. It's also been about that bull market for advice that we heard throughout the day, record flows coming into managed investing as well as good flow into our asset management solutions. And of course, as we heard from James and Jonathan earlier, the continued resilience of the Trader segment. All of that was helpful in driving strong revenue growth in 2025. We're going to talk about how doing so much more for clients is going to continue to drive revenue growth and diversification within each of those segments. So let's start off with net interest revenue. A lot of times, I hear the question, how are we diversifying away from net interest revenue. Let's talk about how we're diversifying within net interest revenue. Net interest revenue more and more is being driven by strong lending activities across our bank and nonbank platform. Let's start with the bank. Neesha covered this as well. We're now over $60 billion in lending in the bank, and that's doubled in the past 5 years. Yet the pledged asset line utilization, roughly 10% is still a low utilization rate, and we're very confident that's going to move higher. We heard from Rick at the beginning of the day, how easy we made it for clients to access funds through a pledged asset line. And importantly, we're earning a good spread over the benchmark rates in the bank lending, so more than 100 basis points. In the broker-dealer, of course, with that very active trader base, we see good engagement across margin lending, but not just margin lending, securities lending and, of course, other strategies such as long/short. Taken together, over $200 billion of lending activities. And what's important is within net interest revenue, more of the economics are being driven by the lending which has limited credit risk and net interest revenue is less driven by the path of interest rates, given we reduced our sensitivity to the path of rates by roughly 1/3. So the durability of net interest revenue is improving. Okay. Let's move to asset management and administration fees. There are a number of opportunities within this space to continue to drive fee revenues and diverse fee revenues within this segment. So we talked about the bull market for advice. There is enormous upside here and the amount of utilization in retail households, again, is a low 5% with -- definitely with room to move much higher. Of course, positive trends as well with our in-house Schwab Wealth Advisory solution as well. Beyond advice, again, we talked about the allocation to alternatives, still upside in that space as well. And of course, as we heard from Andrew as well, monetization across the trillions we have on platform in mutual funds and ETFs. So taken together, this is a good, diverse fee revenue source that is going to continue to grow and provide us diversification. Let's move on to trading. We have the #1 retail trading platform in the industry, #1 in daily average trades, #1 in equity volume, #1 in options contracts, and we're still going to be doing more for clients. James alluded to many of the new experiences that we're offering, including spot crypto and with the acquisition of Forge, access to private markets as well. When you combine that with our platform, the education we provide this segment, with the customer service, with traders supporting traders, the risk management capabilities, this is proving to be a more resilient group. And the more resilience we have with this group, the stronger the engagement and consistency around that, that is also providing durability to revenues. So taken together, that strong organic growth, new clients coming to the firm, asset gathering and of course, market appreciation as well, combine that with revenue diversification from the increased engagement across our platform, we feel highly confident in generating that high single-digit to low double-digit revenue growth through the cycle. But we also expect favorable trends in revenue per account and revenue on client assets as well. So very strong momentum in revenue, and I expect that to continue. So let's move to expenses. Schwab has a history of both being balanced and disciplined in managing its expense base. We make resources available to invest, to innovate, to grow our franchise, but we're also investing in efficiency. And you can see here, we've continued to make progress in driving down that cost, that expense on client assets to an industry low 12 basis points. And that 12 basis points is a very favorable level compared to a whole range of peers. So this is obviously enormously helpful in terms of our competitive advantage in the industry and helps us maintain that low cost to serve our client base. So looking across our expense framework, we have run, grow and optimize buckets. That run bucket, of course, are the expenses needed to operate the day-to-day franchise. It also includes the expenses that are volume-based. And of course, those expenses can range as market sentiment shifts and client engagement evolves. In that grow bucket, these are the investments we're making to help bring new clients to the firm and to help those clients do more across our platform. And then optimize, 2 items with optimize. We're freeing up resources to reinvest in the franchise. And of course, we're investing in efficiency that gives us the flexibility to do more for clients or to allow that to fall to the bottom line in certain environments. Overall, our focus here, constant improvement, scale efficiencies and of course, investing in our future. And any given year, of course, our ultimate spend is going to be informed by our strategic priorities, the macro environment and, of course, client engagement. But we feel really good about this balanced approach to expense management. A few examples or several examples in both grow and optimize and grow, you've heard us talk about expanding branches, hiring financial consultants and wealth advisers. That's going to help bring new clients to the firm and do more across our platform, especially as we invest in wealth and that opportunity in advice, and of course, the use of AI to reach many more clients and do more for them as well. In optimize, Dennis just talked about all the efficiencies and the investments we're making in our infrastructure to free up those resources as well, in part enabled by artificial intelligence. But as we saw in the videos earlier today from Jonathan, we're doing so much more in artificial intelligence that is going to free up resources. It's going to make our client-facing reps much more efficient with tools like knowledge assisted. So again, we have a good amount of grow and optimize initiatives to drive us forward. So in total, in expenses, that focus on profitable growth as well as the efficiency has been able to generate strong positive operating leverage through the cycle. And also here, again, favorable trends that we expect in that cost per account as well as that expense on client account, the ability to continue to grind that lower and also gives us the flexibility to shift resources in that labor mix, meaning that we can continue to invest in people and have people-facing clients to bring new clients to the firm and do more across our platform. Okay. Let's move on to the balance sheet. Since I joined here 2 years ago, an enormous amount of focus on the balance sheet. We've taken deliberate steps to enhance our capabilities, and they've been guided by 3 basic principles. Our balance sheet is going to be managed in a way that's going to continue to support our client needs, that activity can be managed on a foundation of safety and soundness. And lastly, through our balance sheet capabilities, we're also going to support durable financial outcomes through a range of environments. Here, we have a set of examples of what we've been able to achieve with this approach with the balance sheet. We've supported strong client engagement in lending. Lending has been up 45% since the end of 2024 and again, with limited credit exposure. In ALM, that's had an enormous amount of focus. In fact, I think 2 years ago, I think it was my third day on the job was the question I got, what are you going to do about ALM? Well, we focused a lot on ALM. We've reduced our interest rate sensitivity by roughly 1/3. We've enhanced our understanding of client behavior and how they manage their cash in a range of environments that improved understanding of how clients move their cash around in different environments informs that investment portfolio duration range of 2 to 4 years. For example, if you see spikes in cash that you expect to be temporary, you may not invest that at all or maybe you invest that in the very short end of that range. And last example, our enhanced funding diversification. Our client cash remains our primary source of funds, but we purposely complement that primary source of funds with a diverse set of funding programs deliberately. We have programs in our bank as well as in our nonbank. We have secured and unsecured funding programs as well as short-term and long-term programs. The reason we have these programs in place, it helps us meet our evolving client needs, which can certainly be dynamic, especially in the broker-dealer with an active client base and traders that engage in margin lending, but also having a broad set of funding solutions, it allows us to put together a mix of sources of funding to be the most economically efficient in meeting our client needs. So a good set of activities that we've been engaged in on the balance sheet. We are very well positioned in capital as well. Capital is there to support the growth of the franchise and to meet our clients' evolving needs. But at the same time, given our strong earnings momentum, we've been able to return capital in multiple forms. We've increased our dividend. We've selectively redeemed preferred securities, another way in which we've returned capital. And of course, we've been opportunistic and have done stock buybacks as well. So we've done close to $15 billion in returning capital to shareholders since the end of 2024. Again, this has been important capital to meet our client needs, but at the same time, an important part of our financial story as we return capital in excess of what we need to operate the franchise. So taken together, the balance sheet durability, the focus on returning capital in addition to supporting our client needs further bolsters our financial story and durability of our financials. Okay. Our financial formula in summary, that focus on organic growth and the ability to have achieved diverse monetization, which is only going to continue, gives us great confidence in driving high single-digit to low double-digit revenue growth through the cycle. That balanced approach to expense management, investing in our future as well as investing in efficiency, that allows us to achieve continued positive operating leverage, and the discipline around managing our financial resources, our balance sheet, our capital, that also adds to our financial story. It gives us confidence in our mid-teen EPS growth through the cycle. The focus on clients, the industry-leading platform, all the capabilities that we've enhanced all come together to drive outcomes in this financial formula. And I want to be very clear. We are very focused on continuing to drive strong earnings outcomes. Okay. So the part you've all been waiting for. I had said that perhaps we weren't going to do a financial scenario until July, and we will do another financial scenario refresh in July. But given how much the markets have been moving. And I did hear from some of you that if you were coming all the way to Westlake, you wanted to talk about financials. So here we go. Let's go, financial scenario update. Just a quick recap of where we were in the winter. At this time, 2 cuts had been priced into the market, okay? And at the same time, I'm sure you've gone through this already, so I won't hit every point, but that client engagement in terms of those daily average trades, we had assumed at 7.4 million. We've been wrong on that. And of course, a couple of notes there on the bottom in terms of what was excluded at that time. Now let's move forward to today. No rate cuts are priced into the market today. No hikes either, but no cuts at this point. So flat Fed funds. Equity markets rebounded very nicely in the month of April. So we are assuming a roughly 10%, but we know equity markets continue to be on the move. Of that same organic growth rate of roughly 5%, we lifted daily average trade somewhat to 8.7 million. But as you've seen, that has been incredibly strong. And then when we get to the bottom section, again, we continue to exclude any buybacks we may do in the future, but now we include Forge because we closed on Forge. So what you see in the financials is a lift and shift of their revenue and expenses on to our revenue and expense base, which you see come through on the next page. Okay. So where does this leave us? Strong revenue growth, 14% to 15% versus the prior year, and that's up from 9.5% to 10.5% from the winter business update. Also, given the strong engagement in lending and the lack of rate cuts, we're getting a lift in net interest margin as well, 3% to 3.10% for the full year and 4Q average NIM in that 3.25% to 3.30% range. On expenses, 8.5% to 9.5%, again, that is up from the winter business scenario. Important to note, though, the underlying expense versus what we showed you in the winter business update is unchanged. So everything is playing out as planned. The lift is coming from that strong client engagement. It's lifting volume-related expenses, including performance-based compensation. But of course, it's more than offset on the revenue line and it's certainly accretive to our earnings. And then lastly, that lift in Forge by taking their expense base, putting it on to ours, it lifts that expenses by 100 basis points. On the revenue side, that would have been roughly 50 basis points. So strong full year expectations through this particular scenario. And again, as I said, when you look at those daily average trades, they certainly have been on the move. We include sensitivities in the materials that you could model your own assumptions on daily average trades and the additional revenues that you could perhaps achieve. Then a couple of comments on 2Q as well. Same drivers, sustained strength, giving us a strong revenue expectation of 16% to 17% year-over-year and another expense lift 10.5% to 11.5%. And again, there are a couple of onetime factors in here. Once again, you have the lift of Forge onto our expense base. And then you had the return of the SEC 31 fee. Remember, that fee had been suspended. It comes back in 2Q that adds to that expense lift. And of course, those other volume-related expenses that we've talked about. I think for 2Q, your EPS, you're around that $1.50 level in this particular scenario. So very good momentum. I feel good about the financials. And again, coming off record results in 2025, great first quarter. That client engagement has remained robust. I feel very good about the strength of our financials and what we see going forward. So with that, let's go into Q&A.

Brennan Hawken from BMO. Mike, I'm curious, when you first came on board, there were some thoughts around maybe shrinking the balance sheet. Have you had any updated thoughts on that, particularly given all the anxiety around what the future state of cash optimization and what the value might be of having a larger balance sheet than you would need to facilitate some of the client engagement that you talked about?

Thank you for the question, Brennan. And as we've talked about throughout the day, that bank platform is important to help us meet our client needs. We are meeting our client needs on both the asset side and the liability side of their needs. Obviously, the bank provides a place for them to have cash to be redeployed. It provides FDIC insurance. And at the same time, there's been demand for bank lending products, solutions, pledged asset line, which we've made incredibly easy as well as mortgages. When we've talked about the balance sheet, what's important to remember is that we have enhanced our capabilities. And importantly, some of that cash through that bank deposit program with TD, it allows us to move cash off our balance sheet when we desire to do so. It allows us to move cash back on to that balance sheet. And so that gives us a great deal of flexibility to manage cash that we say, hey, if it's temporary, we can leave that on balance sheet and leave that very short term, we can move that off balance sheet. We have a lot of flexibility. But of course, part of that balance sheet, I would say, headwind, if you will, to growth was paying down those expensive supplemental borrowings. And I think those peaked close to $100 billion. So bringing that down had been really creating a headwind to the balance sheet. From here, the most important part is understanding what is happening to those deposits that you referenced. And we track those all the time. We talk to our clients. We are very informed about that deposit base and therefore, how do you deploy it. So we feel really good about our bank, the capabilities that we're building. It's going to be continuing to serve our client needs, and that is part of our growth story. We feel very good about it. Thank you for the question.

Alex Blostein from Goldman. Thank you for the day, by the way, really informative. So I appreciate you guys doing this. I wanted to ask a bit of a 2-part question and the interplay between NNA growth and ROCA. In the past, you guys talked about the 5% to 7%. It doesn't sound like there's an update to that, but curious how you think about net new asset growth for the firm as a whole. And it feels like there is a lot more today about ways you're looking to monetize the assets that you've built over the years. So when we think about the ROCA on the business, how should that evolve over the next couple of years, acknowledging that NII will give it a natural lift, but there might be other things that could help that ROCA dynamic as well. So how do you think about both of those?

Absolutely, Alex. Thank you for the question. So both are important. We feel good about the momentum in NNA. As you saw in our scenario, we assume that roughly 5%. That's unchanged from the beginning of the year. So NNA is important, bringing those either new clients to the firm or the asset gathering is critical. So that is still a focus area. It's something we're still investing in. Again, opening new branches, hiring FCs, all of that is going to continue to fuel that type of growth. And then again, once those clients come to us, equally important is on our platform, our clients once they become familiar with our products, our solutions, our level of service, they're doing more across our platform. And that's enabling us to drive revenue. It's diversification. Diversification means durability in most environments. So that all comes together quite nicely. ROCA, as we said, positive trends, revenue per account, overall revenue growth, we feel good about. ROCA as well will trend favorably. Of course, the thing about ROCA, though, it's over client assets. And so when you talk about what client assets have done, not just the asset gathering, but the appreciation of markets has moved that higher, that's great. We have more assets on platform, supporting more clients. That's great. Overall, we expect favorable trends though in that ROCA given everything we're doing for clients and the revenue strength that we have from that.

Echoing Alex's earlier remarks, I appreciate the day, certainly a very comprehensive update. I wanted to unpack the mid-teens earnings growth algorithm, Mike, because that's something that you -- the company has highlighted very consistently. And at the same time, the ROCA expansion appears to be accelerating and the potential for AI efficiencies and bending the cost curve is arguably even greater than what we had seen before. I was hoping you could speak to what the implications are for incremental margins, how you're thinking about striking that balance of passing on the benefit to the customers versus the shareholders and at the same time, whether there's a credible path to maybe seeing some acceleration beyond that mid-teens given the revenue tailwinds combined with the AI efficiencies?

Steven, thank you for the question. We gave you a through-the-cycle picture. I think if you look at last year and even with this new scenario, what that implies, clearly, you're above that. So there's going to be environments where certainly we could be above that. We feel really good about the revenue strength and the earnings momentum. And again, we're trying to give you a sense of where you are through the cycle. But certainly, in the right environments, we could be above that. And I think these are good examples of where we are today. That margin growth, again, we've talked about that as not being a target, but rather a result of a well-balanced approach to managing our financials. We're investing in growth. We're investing in innovation. And with those investments, we're bringing more clients to the firm, doing more across our platform. So that gives us great confidence in that revenue growth. And we're making sure we're making those investments. We are an industry leader. We're going to stay that way. We're going to make the investments we need to continue to solve, I would say, to meet our clients' evolving needs. That has been something that's always been a driver of what has informed what we do, meeting that client need. At the same time, investing in that efficiency is a priority. And to your point, AI makes that even much more efficient. So we've seen favorable trends in operating leverage. In that financial scenario, the winter business update financial scenario had 400 basis points of operating leverage. The updated financial scenario, 550 basis points of operating leverage. So I think you are seeing evidence of that growth. But again, that also gives us the flexibility to invest in growth, and we're making sure we're going to do that as well. So thank you for the question.

Devin Ryan with Citizens. As we think about the environment that we're in right now, a lot of today is talking about artificial intelligence and really the, I think, the bar rising to be competitive in kind of this future world that we're in, technology costs and just innovation that's going to be required. And obviously, I think, hopefully, today, that impression comes through that Schwab is prepared for that. As you look around the universe of all the areas where Schwab competes, how do you think about the competitive landscape and also the ability and interest in doing M&A or even like what that pipeline looks like? I'm guessing there's firms that are probably looking at themselves and saying, we haven't made these investments that we're not capable to or we don't have the scale to compete. So just talk a little bit about M&A appetite and then also just capacity now that the capital ratios are in a strong place.

So first, on your AI point, of course, we've been focused -- AI is going to be a competitive advantage for us. We're AI-enabled. We're investing in it. You can see all the capabilities that are being enabled by AI. So we're going to continue to invest and stay out in front. It's also enabling efficiency. When it comes to M&A activity, we're always going to look at our strategic priorities. What are the areas that we want to focus on, and we'll look at many different ways to do it. And I think Adele summed it up very nicely. We're going to look at what does it take to build organically, what does it take perhaps to consider an acquisition or what may be better suited for a partnership. So we're always going to be exploring different capabilities. Of course, we'll be focused on the market valuations for those as well. But I think that has served us well. I think as Schwab has grown over time, those acquisitions have been informed by perhaps capabilities. It's informed by scale, maybe a combination of the 2. And I think in this space now, the combination of doing more for clients and focusing on those efficiencies as well, we're going to use that lens as well every time that we look at the enhanced capabilities and what we may be able to do with industry, either partnering or acquiring as needed.

All right. Let's close out with one final question.

Brian Bedell, Deutsche Bank. I echo everyone else's comments. Great, great day, really informative. Maybe just big picture longer term, as you think about the revenue mix between fees and NII. And obviously, it's an output of a lot of conditions. But how are you thinking strategically about growing the fee revenue base potentially faster than NII with the objective of potentially improving Schwab's valuation given -- even though you said NII is more durable and that makes a lot of sense, but still it has a lower valuation tied to it than fee revenue. So how strategically are you thinking about growing that? And then if -- it's good to see that there's not a lot of movement in cash in terms of cash sorting and that seems to be the case for at least a while. But if that changes at some point, how flexible can you be to offset some of that with an acceleration of fee revenue?

A couple of points. We are seeing positive momentum in fee revenue. That is becoming a bigger part of our revenue stream, and we're going to continue to see that grow. I think over time, as a percentage, and you made the right point, the market conditions that you're in, the client engagement will ultimately inform that revenue generation. I think over time, you're probably seeing the percentage of asset management and administration fees increasing certainly relative to net interest revenue. But all of that will depend, of course, how the market plays out and how client engagement evolves as well. But I would say that what I look at is the overall platform, how we're doing more for clients, how we're creating that revenue diversification. It is an industry-leading platform and clients are coming to us for the capabilities we have, for the service we provide, for the trust they place in us to help them build and manage their wealth. So that's a very strong place to be in. I also know that our -- we have people in the field helping our clients manage that cash. And we know that, a lot of that cash where clients are seeking a higher yield, that money has already been deployed. And we've seen meaningful rate cycles in the last few years, and that's given us a good lens on how that money can move around. So again, I think everything we're talking about since coming to the firm, focus on the balance sheet and then focusing as we do more for clients, a natural outcome of that is strong revenue diversification. I think these trends are incredibly favorable. And given we have an industry-leading platform, again, over 47 million client accounts and over $12 trillion of assets, that puts us in a very strong position. So thank you for the question, and we will wrap up here. Thank you all again for joining. It was great having you here. I'll just leave you all with a few closing remarks. It's hard not to be excited about how well positioned we are. This is a fast-moving industry. It's competitive, but our platform is unique. We have a competitive advantage. We have a differentiated level of service. We are a trusted financial leader in this industry with an exceptional platform. That platform operating at scale puts us in a competitive advantage where we are winning. So we are winning today. We're seeing growth on all fronts. We are seeing our strategy executed. And with that, we're going to continue to drive strong earnings through the cycle. I will close there. Thank you all again very much.