What the changes say
- Schwab plans expanded digital-asset access, including select cryptocurrency spot trading, beginning in 2026.
- Fraud and financial-crime exposure is newly highlighted, including unauthorized account access, transactions, and money movement.
- Outsourced custody providers are now included among critical service providers.
- Interest-earning assets now include margin loans and PALs, broadening interest-rate exposure.
What changed since the prior 10-K
New
- NewOperational Risk
We may suffer financial loss from fraud and financial crime
Fraudsters may use phishing, compromised devices, data breaches, or social engineering to access client accounts and move money or trade securities.
- NewOther Business Risks
We intend to offer clients direct access to select digital assets, which exposes us to new and uncertain financial, operational, legal, and regulatory risks that could adversely affect our business and financial results
Planned 2026 access to select cryptocurrency spot trading creates custody, private-key, liquidity, fraud, irreversible-loss, and uncertain regulatory risks.
Dropped
- DroppedOperational Risk
We rely on financial intermediaries to execute and settle client orders and transactions with financial intermediaries are a significant source of revenue
Reworded
- 54% rewrittenCompliance Risks
Legislation or changes in rules and regulations could negatively affect our business and financial results
Digital assets were added to the regulatory risk discussion, reflecting planned expanded client access to select cryptocurrency trading.
- 53% rewrittenOperational Risk
We rely on outsourced service providers and financial intermediaries to perform key functions, and failure of these entities to perform as expected could result in financial or reputational harm to us or financial harm to our clients
Custody functions were added to the outsourced activities covered by this risk.
Was: We rely on outsourced service providers to perform key functions
- 33% rewrittenEconomic and Market Risks
A significant change in client cash allocations could negatively impact our income
The wording now describes client cash as a funding source for revenue rather than saying Schwab relies heavily on it.
- 31% rewrittenLiquidity Risk
A significant decrease in our liquidity could negatively affect our business as well as reduce client confidence in us
No substantive change is shown in the provided text.
- 30% rewrittenEconomic and Market Risks
Significant interest rate changes could affect our profitability
Margin loans and pledged-asset loans were added to the listed interest-earning assets exposed to rate changes.
- 28% rewrittenOperational Risk
Security breaches of our systems, or those of our clients or third parties, may subject us to significant liability and damage our reputation
No substantive change is shown in the provided text.
All 19 risk factors
Headings as the filing states them, in filing order.
Economic and Market Risks
- 01Developments in the business, economic, and geopolitical environment could negatively impact our business
- 02A significant change in client cash allocations could negatively impact our income33% rewritten
- 03Significant interest rate changes could affect our profitability30% rewritten
- 04Problems encountered by other financial institutions and responsive measures to manage such problems could have direct adverse effects on financial markets generally and our financial position or results of operations, as well as indirect adverse effects on us
Liquidity Risk
- 05A significant decrease in our liquidity could negatively affect our business as well as reduce client confidence in us31% rewritten
Operational Risk
- 06Security breaches of our systems, or those of our clients or third parties, may subject us to significant liability and damage our reputation28% rewritten
- 07Technology and operational failures or errors and other operational risks could subject us to losses, litigation, regulatory actions, and reputational damage
- 08Our investment management operations may subject us to fiduciary or other legal liability for client losses
- 09We rely on outsourced service providers and financial intermediaries to perform key functions, and failure of these entities to perform as expected could result in financial or reputational harm to us or financial harm to our clients53% rewritten
- 10We may suffer financial loss from fraud and financial crimeNew
Credit Risk
- 11We may suffer significant losses from our credit exposures
Compliance Risks
- 12Extensive regulatory supervision of our businesses may subject us to significant penalties or limitations on business activities
- 13Legislation or changes in rules and regulations could negatively affect our business and financial results54% rewritten
- 14Failure to meet capital adequacy and liquidity guidelines could affect our financial condition
- 15We are subject to litigation and regulatory investigations and proceedings and may not be successful in defending against claims or proceedings
Other Business Risks
- 16Potential strategic transactions could have a negative impact on our financial position
- 17We intend to offer clients direct access to select digital assets, which exposes us to new and uncertain financial, operational, legal, and regulatory risks that could adversely affect our business and financial resultsNew
- 18Our industry is highly competitive and characterized by aggressive price competition
- 19Our stock price has fluctuated historically, and may continue to fluctuate
Other Schwab Charles 10-Ks
- FY2024 10-K risk factors20 risks
Client cash balances, interest rates, and securities values directly drive Schwab’s revenue, profitability, and client confidence.
Filed Feb 26, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.