Schwab CEO on Prediction Markets, Client Engagement, and Market Outlook

Record Quarter and Client Engagement

• 📈 Charles Schwab reported a record quarter with earnings up 50% year-over-year and net new client assets reaching $519 billion annually.
• 🤝 The firm is experiencing a "bull market for convenience," with clients consolidating more of their financial lives (investing, trading, wealth, banking, lending) with Schwab for a more integrated experience.
• 💡 This consolidation leads to increased client satisfaction and business growth, a win-win scenario.

Stance on Prediction Markets

• 🎯 Schwab is "absolutely open" to incorporating event-based prediction markets focused on economic indicators like employment or inflation, viewing them as potentially hedging or accentuating investment portfolio positions.
• ⚠️ However, these types of prediction markets are not a high priority for clients, so Schwab is focusing innovation on areas of greater client interest.
• 🚫 The firm explicitly distinguishes prediction markets from sports gambling, which constitutes about 95% of current prediction market volume and is not something Schwab is interested in offering due to its mission to improve clients' financial lives.
• 💰 Less than 5% of users on gambling apps profit, contrasting sharply with Schwab's focus on client wealth growth.

Innovation and Client Priorities

• 🚀 Schwab has focused on significant innovations in 2025, including 24/5 trading for active traders and enhanced mobile app capabilities.
• 💼 For wealth clients, new capabilities in tax, trust, and estate planning have been launched, including investment in trust services.
• 🛠️ Innovations for advisor clients have also been a priority, making it easier for them to work with Schwab.
• 🌍 The acquisition of Forge Global to democratize access to private company investments is highlighted as a more significant client priority than prediction markets.

Market Outlook and Geopolitical Noise

• 📊 Despite geopolitical events and market volatility, Schwab's clients are not showing undue concern, and the firm thrives in such environments.
• 🗣️ Schwab emphasizes its role beyond just an investment app, providing extensive client support through calls and local community presence to help navigate market noise and build long-term wealth.
• 🌐 While open to 24/7 trading, Schwab notes that most trading activity occurs within current market hours, and the efficiency of concentrated market times is beneficial for tight spreads and trading efficiency.
• 👍 The economic outlook for the year is viewed as optimistic, with the economy on strong footing and markets having performed well.