A Daily Network publication
Explore the network
Private Wealth Daily
Independent Intelligence on the Private Wealth Industry
Wednesday, September 30, 2026The Morning Brief →Sign in
RIA

Fitch says higher rates stand to lift wealth manager cash earnings

The September 29 report assesses Schwab, LPL Financial, Raymond James, Ameriprise and Stifel, and flags higher deposit costs and cash sorting as offsets to the spread.

A sustained stretch of higher interest rates stands to lift client-cash earnings across the largest US wealth managers, though the degree and timing of that benefit will vary significantly from firm to firm, Fitch Ratings said in a September 29 report. The firms it assessed carry ratings spanning Schwab's A/Stable down to LPL Financial's BBB/Stable, with Raymond James and Ameriprise each at A-/Stable and Stifel Financial at BBB+/Stable.

The mechanics are mundane and worth stating plainly: wealth managers earn on client cash by investing or lending uninvested balances at yields higher than the rates they pay clients, so climbing rates lift yields on loans, floating-rate assets and reinvested fixed-income securities, widening the spread that drives net interest income. Fitch's view of who sees that gain first rests on mix — greater exposure to floating-rate assets, faster reinvestment of maturing holdings and less reliance on rate-sensitive funding — while the timing and magnitude turn on each firm's asset mix, funding profile and sweep program structure.

A 3.5-year duration and a $485.7 billion sweep base

Fitch singled out Schwab as carrying the largest absolute earnings exposure to client cash, a function of its substantially larger sweep-related deposit base. Its bank investment portfolio runs a 3.5-year duration alongside 4% floating-rate securities, so the gain arrives through loan repricing and the gradual reinvestment of fixed-rate holdings as they mature. Schwab generated nearly $3.4 billion of net interest revenue in the second quarter of 2026, largely on approximately $485.7 billion held in sweep accounts.

Raymond James holds primarily floating-rate securities and corporate loans along with certain variable-rate sweep fee arrangements, a profile that by Fitch's framework should reprice sooner when short-term rates move. The figures do not line up as a pair: Schwab's is net interest revenue, largely booked against a bank balance sheet, while Raymond James's client-cash exposure runs through fee arrangements. Fitch attributes Schwab's revenue largely, not entirely, to its sweep base.

Sorting pressure eases, sweep balances stay low

Two offsets cut against the benefit. Higher deposit costs and cash sorting, the migration of low-yield idle balances into money market funds and other products offering better returns, erode the earnings gain. Net interest income rose sharply at wealth managers during 2022 and 2023 as asset yields climbed, then moderated as clients moved cash out of low-cost sweep accounts. That pressure has since abated as interest rates and client allocations stabilized, but aggregate client cash, and cash as a share of total client assets, remain below historical levels, which means balances have not fully returned to sweep accounts.

For an advisory practice the spread Fitch describes is the same spread a client feels as forgone yield on uninvested cash, and sorting is the client's answer to it. Deposit costs are where that conversation reaches the firm's own income statement. Quarterly reports will show whether a sustained higher-rate environment arrives at clients as a better sweep rate or stays on the margin, with Schwab's roughly $485.7 billion sweep base and the industry's below-historical cash ratios as the numbers to watch.

Continue your research

Save this analysis and keep the funds you follow together in My Desk.

Sign in to save articles or follow funds.
Sources & further reading
InvestmentNews
More from PWD
RIA

XYPN adds Income Lab as a member benefit for more than 2,300 planners

Retirement income planning reached the top of the network's benefit request list in 2026, and more than 300 members already use Income Lab.
RIA

XYPN partners with Jump to offer members discounted AI practice tools

AI efficiency tools were the network's most-requested partnership category in 2025 and 2026, with Jump the most requested product, according to XYPN.
The Close

Merrill prices shelf access at up to $1.4 million as Raymond James embeds alternatives

Merrill's updated Form ADV discloses shelf fees as high as $1.4 million and an incentive to recommend products from firms that pay for data analytics.
Elsewhere in the networkAll titles →
Every weekday · 6:30 a.m. ET

The Morning Brief

The private wealth industry in four minutes, every weekday at 6:30 a.m. ET. Free.