Charles Schwab vs. Morgan Stanley: how they make money

• Borrowers and bond issuers (net interest revenue) · 49.1% of revenueInterest on bonds, margin loans and bank loans funded mostly by client cash, minus interest Schwab pays
• Fund investors and advice clients (asset management and administration fees) · 27.2% of revenueFees based on balances in Schwab and other funds, managed portfolios, trust and 401(k) recordkeeping
• Traders and trade execution venues (trading revenue) · 16.4% of revenueCommissions, order flow payments from venues that execute client orders, and bond trading
• TD's banks (bank deposit account fees) · 4.1% of revenueFees for client cash swept to TD's banks under the 2023 agreement
• Other · 3.2% of revenueService fees, gains on investments and other items, net of the provision for credit losses

• Companies, governments and institutions (Institutional Securities) · 46.8% of revenueCorporations, governments, financial institutions and ultra-high net worth clients pay for deal advice, underwriting, trading and financing.
• Individual investors and businesses (Wealth Management) · 44.9% of revenueIndividual investors, including high and ultra-high net worth people, plus businesses and institutions, pay fees on assets, commissions and interest.
• Institutions and intermediaries (Investment Management) · 9.2% of revenuePension plans, foundations, endowments, government entities and investors reached through intermediaries pay management and performance fees.

FY2025

FY2025

Not on the Charles Schwab page.

Not on the Morgan Stanley page.

• One class of shares.
• Officers and directors as a group: 6.3% of shares (as of Mar 3, 2026).
• Vanguard Capital Management: 7.2% (as of Mar 31, 2026).
• Charles R. Schwab, founder and Co-Chairman: 5.9% (as of Mar 3, 2026).
• BlackRock, Inc.: 5.6% (as of Jan 31, 2024).

• One class of shares.
• Officers and directors as a group: 0.2% of shares (as of Feb 27, 2026).
• Mitsubishi UFJ Financial Group (MUFG): 24.1% (as of Jul 15, 2026).
• State Street: 7.2% (as of Jan 30, 2024).
• Vanguard: 6.9% (as of Feb 13, 2024).
• 1 more holders on the Morgan Stanley page.

• Clients moving cash out (liquidity)Client cash is Schwab's main funding. When rates rose, bank deposits fell from $443,778 million at the end of FY2021 to $289,953 million at the end of FY2023, and Schwab used higher-cost borrowing.
• Loans backed by securities and homes (customer or supplier concentration)Margin loans were $187.9 billion at Sep 30, 2026, including $60.7 billion tied to long-short strategies. 41% of first mortgages and home equity lines were in California at Dec 31, 2025.
• Price competition (competition)The 10-K lists aggressive price competition as a risk factor. Trading revenue was $3,921 million in FY2025, 16.4% of revenue.
• Cyber attacks and outages (technology)The 10-K names security breaches and technology failures as risks; Schwab serves 40.26 million active brokerage accounts.

• Revenue that follows the markets (demand)Trading and investment banking made $26,755 million, or 37.9% of FY2025 net revenues. Investment banking revenue fell 49% from FY2021 to FY2022, and net income for common stockholders fell from $14,566 million to $8,530 million between FY2021 and FY2023.
• Losses on loans (other)Net charge-offs were $106 million in Q3 FY2026, up from $63 million a year earlier, mainly on certain corporate and commercial real estate loans, the company said. Loans held for investment reached $298,455 million at Sep 30, 2026.
• A large shareholder (governance)MUFG held 24.12% of the common stock in July 2026, designates two directors and is Morgan Stanley's partner in a Japan joint venture in which Morgan Stanley has a 40% economic interest.