The Charles Schwab Corporation

“Schwab is the operating infrastructure of independent wealth management in the US, with $9.9T in client assets, near-impenetrable RIA custody switching costs, and a scale cost advantage that structurally disadvantages challengers. The 2022-2024 NII compression was self-inflicted and temporary — the balance sheet is healing rapidly, with debt cut by $28B in two years and earnings rebounding to $8.85B in 2025. At 12.5x forward earnings and a recovering 19% ROE, the market is pricing in either regulatory disruption to sweep economics or a structural decline in competitive position — neither of which is well-supported. The only plausible path to permanent impairment is a regulatory overhaul of uninvested cash economics (~10-15% probability over a decade), and that risk appears already discounted at current prices. A 3-5% portfolio position in measured tranches is appropriate for long-term investors.”