Stock swings tied to the potential impact of artificial intelligence and other questions looming over the economy have sent shares of some of the largest wealth management firms tumbling.
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But a half dozen publicly traded U.S. retail brokerages and wealth management firms reached record combined client asset levels, boosted net revenue by 17% and pushed up their pretax earnings by 21% through their “solid performance” last year, according to a study released earlier this month by the independent Fitch Ratings agency.
Despite the recent stock volatility and varying impacts of economic factors like AI, interest rates, inflation and tariffs, the analysis suggested the underlying strength of the firms’ businesses will buoy them in 2026 and beyond.
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Beyond the daily stock blips
The Fitch study focused on Ameriprise, Edward Jones’ parent company, LPL Financial, Raymond James, Charles Schwab and Stifel Financial. With the exception of Edward Jones’ parent, which is a privately held partnership that discloses its earnings but isn’t traded in public markets, the five other wealth management giants’ stocks have all fallen in value so far this year.
The Feb. 10 rollout of an AI-powered tax tool by custodian firm Altruist triggered a selloff across wealth management stocks. The episode followed and preceded selloffs linked to the effects of AI on it and any number of other industries, and concerns about private credit and what form tariffs will take after the Supreme Court’s decision last week are adding to the turmoil.
“Market volatility typically shifts earnings drivers, rather than uniformly pressuring earnings. The sector has demonstrated notable resilience despite macro volatility, though earnings sensitivities differ by business model and revenue mix,” Henry Ye, a Fitch director who co-authored the report, said in an email interview. “Heightened volatility has supported transactional revenues: Trading volumes surged to record levels in 2025 amid increased market activity. However, these revenues could normalize if volatility subsides and/or investor sentiment weakens.”
Regardless of momentary or long-term pressures on stocks, metrics like the record client assets stand out to industry executives like Raj Bhattacharyya, the CEO of San Francisco-based registered investment advisory firm Robertson Stephens Wealth Management. His private equity-backed firm notched a 23% bump in its assets under management in 2025 to $8.7 billion thanks to two acquisitions, market appreciation and organic growth. In general for a highly correlated industry, bull-market gains in stocks have always helped wealth management firms’ margins. That’s what drove the industry’s success last year, Bhattacharyya said.
“The simplest answer to that is that America gets wealthier every year,” he said. “The one I care about is the client assets — what do our clients trust us with as a company?”
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The strong business metrics
Other metrics tracked by the Fitch analysis are “not all that relevant” to most independent advisory practice and wealth management firm owners, he said. To outside stock analysts and credit-rating agencies closely tracking the earnings among large publicly traded firms, however, figures like the level of cash balances, interest margins and trading activity loom large.
To that point, industry transaction volume set a record in 2025 because of “heightened market volatility, record equity markets and expanded product access,” according to the Fitch study, which pointed out that Schwab’s “dominant scale and increased utilization of trading and wealth solutions” in particular fed its business. “Broader access, including extended-hours trading and digital asset exposure, supported volumes. Fitch expects continued platform innovation to underpin client engagement and transactional activity in 2026.”
Those innovations, asset appreciation, recruiting and that “strong client activity” fueled the record asset levels, as wealth management firms “continue investing in technology and platform modernization to enhance advisor efficiency and support further growth,” according to the report. But higher expenses can take a toll as well.
Higher acquisition and financial advisor onboarding and recruiting costs for LPL dented its profits last year, and a one-time regulatory charge cut into Stifel’s bottom line. On the other side of the coin, Schwab is pressing its advantages through rising net interest margin that stems from client cash, securities-backed lending and its own borrowing.
“Interest rate moves remain a key swing factor: Schwab has proactively repositioned its balance sheet to reduce rate sensitivity, and NIM has been expanding largely helped by paydown of supplemental borrowings,” Ye said, noting that the firm is forecasting expanded net interest margin in 2026 even after adjusting for the possibility of two more rate cuts by the Fed this year. “Even in a more dovish scenario with much lower Fed funds rate, Schwab projects solid earnings growth in ’26. Other diversified wealth managers may experience different near-term NIM outcomes based on their funding mix and balance-sheet actions.”
In terms of their balance sheets, the half dozen firms display diversified portfolios and “conservative securities-based lending practices with strong collateral requirements” that have held up in earlier times of volatility, he noted. Those strong capital structures could provide publicly traded firms with an edge as they wage fights on the advisor recruiting trail for top talent and seek to fend off the threat of AI startups vying to disrupt their businesses.
“On AI investments, we view substantial technology investments as increasingly essential for competitive positioning,” Ye said. “For example, Raymond James’ $1.1 billion technology spend in ’26 and recent deployment of AI tools demonstrate how scale advantages are widening, and these investments should drive medium- to longer-term efficiency benefits.”
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Outlook the rest of the year
Ongoing M&A consolidation among wealth management firms buying up smaller rivals or companies from related fields like fund management and technology could add further to those scale advantages in 2026.
With “so much wealth out there,” players like Robertson Stephens largely don’t view other independent firms as competitors, Bhattacharyya said, adding the caveat that there is a struggle for advisor talent among them.
A group of investors led by Long Arc Capital launched the firm about eight years ago, when the RIA was “1/20th or 1/30th the size of what we are,” he noted. The founders sought to cater to high net worth clients and other customers with comprehensive, fiduciary planning that had fewer conflicts of interest than the traditional industry firms.
“We just set out to build that in 2018 with a very, very small asset base,” Bhattacharyya said. “We will continue to grow, we will continue to acquire new clients and we will continue to acquire advisor teams.”
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