Schwab: AI adoption accelerates, compares to 1996 web trading boom

Schwab reports that AI use among the more than 16,000 advisory firms it works with is moving beyond trial phases into everyday operations. The head of its advisor services unit predicts the speed of adoption will hit a peak by the time of next year's IMPACT, the firm's yearly advisor gathering.

Speaking with CNBC in Boston, Jon Beatty, who leads Schwab Advisor Services, said AI is meant to assist advisors rather than take their place. Still, the expense of implementing the technology rests with the RIA firms, and Schwab is covering some of that cost.

Could Schwab's 1996 online trading debut foreshadow AI's trajectory?

Schwab launched web trading on March 31, 1996, and within a month had attracted 100,000 customers. According to the firm's own timeline, online accounts had grown to 2 million by 1998.

That same timeline indicates Schwab captured 41% of online brokerage assets within four years, double the share held by competitor E-Trade.

Beatty characterized the shift in speed like this.

“Last year at impact it felt like we were crawling. This year it feels like we’re walking maybe at a fast walk.”

The comments were made by Jon Beatty, head of Schwab Advisor Services, in an interview with CNBC.

Per the timeline, the dot-com bust revealed Schwab's cost model was not sustainable. Dave Pottruck stepped down as CEO in 2004, and Charles Schwab resumed the role.

Who covers the cost of quicker AI adoption this round?

Schwab is providing a $4,800 credit until November 30 to firms that sign up for Anthropic's Claude AI assistant.

The credit pays for one year of seats on the 20-seat enterprise plan, though usage fees are charged separately.

About 11,000 out of the roughly 17,000 RIAs that custody client assets with Schwab have less than $100 million in assets under management. These firms usually have under 20 advisors, which is below the plan's minimum seat count.

Geoff Moore, CIO of Valmark Financial Group, says the usage costs run between $75 and more than $300 per month for each advisor.

According to Schwab's announcement, it is the only RIA custodian currently part of Anthropic's advisor program. If the 1996 precedent repeats, that early advantage could attract additional advisory firms, unless the usage fees outweigh the time savings.