What dominates the section
- Client cash balances, interest rates, and securities values directly drive Schwab’s revenue, profitability, and client confidence.
- Financial-institution stress, liquidity needs, and credit exposures could pressure funding, lending, settlement, and market confidence.
- Cybersecurity, technology, outsourcing, regulation, and competition create significant operational, legal, and pricing risks.
The risks most specific to Schwab Charles
A significant change in client cash allocations could negatively impact our income
Clients moving cash out of deposits could reduce funds available for margin lending and bank investments, weakening a major revenue source.
Significant interest rate changes could affect our profitability
Falling interest rates could reduce net interest revenue and bank deposit account fee revenue.
securities portfolios. Increased unrealized losses on investment securities or other assets on our balance sheet can reduce market or client confidence in us, which could limit our ability to attract new client assets and accounts or result in the transfer of client assets and accounts from the Company
Higher rates can create unrealized securities losses and prompt clients to move bank deposits into higher-yielding investments.
A significant decrease in our liquidity could negatively affect our business as well as reduce client confidence in us
Insufficient liquidity could disrupt transaction settlement, custody obligations, lending commitments, and client confidence.
- Operational Risk
Security breaches of our systems, or those of our clients or third parties, may subject us to significant liability and damage our reputation
Cyberattacks on Schwab, clients, or third parties could expose confidential information, trigger liability, and damage its reputation.
- Operational Risk
Technology and operational failures or errors and other operational risks could subject us to losses, litigation, regulatory actions, and reputational damage
Technology or operational failures could disrupt processing, recording, and monitoring of Schwab’s large transaction volumes.
- Operational Risk
We rely on financial intermediaries to execute and settle client orders and transactions with financial intermediaries are a significant source of revenue
Failures by market makers, exchanges, clearinghouses, or dealers could impair order execution, settlement, and significant transaction-related revenue.
- Operational Risk
We may suffer significant losses from our credit exposures
Clients, counterparties, or issuers may default, while collateral may prove insufficient to cover Schwab’s exposure.
- Operational Risk
Extensive regulatory supervision of our businesses may subject us to significant penalties or limitations on business activities
Extensive securities, banking, and financial-services supervision could impose penalties, higher compliance costs, or limits on activities.
- Other Business Risks
Our industry is highly competitive and characterized by aggressive price competition
Aggressive competition could pressure Schwab’s deposit and loan rates, advisory fees, fund expenses, trading commissions, and other pricing.
All 20 risk factors
Headings as the filing states them, in filing order.
Other
- 01Developments in the business, economic, and geopolitical environment could negatively impact our business
- 02A significant change in client cash allocations could negatively impact our income
- 03Significant interest rate changes could affect our profitability
- 04securities portfolios. Increased unrealized losses on investment securities or other assets on our balance sheet can reduce market or client confidence in us, which could limit our ability to attract new client assets and accounts or result in the transfer of client assets and accounts from the Company
- 05Problems encountered by other financial institutions and responsive measures to manage such problems could adversely affect financial markets generally, could have an adverse effect on our financial position or results of operations, and have indirect adverse effects on us
- 06A significant decrease in our liquidity could negatively affect our business as well as reduce client confidence in us
Operational Risk
- 07Security breaches of our systems, or those of our clients or third parties, may subject us to significant liability and damage our reputation
- 08investigate and remediate vulnerabilities or other exposures. We may also be required to pay ransom to threat actors to restore or prevent dissemination of data
- 09Technology and operational failures or errors and other operational risks could subject us to losses, litigation, regulatory actions, and reputational damage
- 10Our investment management operations may subject us to fiduciary or other legal liability for client losses
- 11We rely on outsourced service providers to perform key functions
- 12We rely on financial intermediaries to execute and settle client orders and transactions with financial intermediaries are a significant source of revenue
- 13We may suffer significant losses from our credit exposures
- 14Extensive regulatory supervision of our businesses may subject us to significant penalties or limitations on business activities
- 15Legislation or changes in rules and regulations could negatively affect our business and financial results
- 16Failure to meet capital adequacy and liquidity guidelines could affect our financial condition
- 17We are subject to litigation and regulatory investigations and proceedings and may not be successful in defending against claims or proceedings
Other Business Risks
- 18Potential strategic transactions could have a negative impact on our financial position
- 19Our industry is highly competitive and characterized by aggressive price competition
- 20Our stock price has fluctuated historically, and may continue to fluctuate
Other Schwab Charles 10-Ks
- 2026 10-K risk factors
23 risks. Schwab relies heavily on client cash allocation and interest rates for profitability and revenue generation. The business faces extensive regulatory supervision, complex cybersecurity threats, and increasing competition in financial services. Strategic digital asset offerings planned for 2026 introduce new regulatory and operational risks.
Filed Feb 25, 2026
About this page
Item 1A of the 10-K on EDGAR was split into its risk factors and, where the company's previous 10-K is on file, each heading was matched to last year's and the text compared word for word. The headings are the filing's own. The one-line readings and the overview were written by a language model from the text of the new, dropped, and rewritten risks; they refer to risks by position and cannot misquote a heading.