Charles Schwab vs Morgan Stanley: Revenue, Profit and Business Model
Charles Schwab reported $23.9B of revenue in FY2025 and $8.9B of net income. Morgan Stanley reported $70.6B of revenue in FY2025 and $16.9B of net income.
Latest financial snapshot
Charles Schwab
- Latest revenue
- $23.9B (FY2025)
- Net income
- $8.9B
- Net margin
- 37.0%
- Revenue growth
- +15.4% a year, FY2020–FY2025
Morgan Stanley
- Latest revenue
- $70.6B (FY2025)
- Net income
- $16.9B
- Net margin
- 23.9%
- Revenue growth
- +8.2% a year, FY2016–FY2025
Financial summary
Charles Schwab
Schwab is a spread-and-fee business. In FY2025, net revenues rose 22% to $23.921 billion and net income rose to $8.852 billion from $5.94 billion in 2024, as client cash stabilized, high-cost bank funding was paid down, and trading hit records. Momentum carried into 2026: first-half net revenues reached $13.554 billion (up 18%) and Q2 2026 GAAP EPS hit a record $1.54, with an annualized return on equity of 25%. Schwab returned $11.8 billion of capital to shareholders in 2025 through buybacks and dividends.
Morgan Stanley
Net revenues rose from $34.6B in 2016 to $70.6B in 2025, with net income reaching $16.9B in 2025. Under James Gorman (CEO 2010-2023) the firm added Smith Barney, E*TRADE, and Eaton Vance to build recurring fee revenue. Under Ted Pick, results accelerated: Q2 2026 net revenue of $21.35B was up 27% year over year, net income of $5.58B was up 58%, and first-half 2026 revenue was about $42B with ROTCE near 27%.
Revenue and profit by year
Charles Schwab
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2025 | $23.9B | $8.9B | 37.0% | +22.0% | Source |
| FY2024 | $19.6B | — | 0.0% | +4.1% | Source |
| FY2023 | $18.8B | — | 0.0% | -9.3% | Source |
| FY2022 | $20.8B | — | 0.0% | +12.1% | Source |
| FY2021 | $18.5B | — | 0.0% | +58.4% | Source |
| FY2020 | $11.7B | — | 0.0% | — | Source |
Morgan Stanley
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2025 | $70.6B | $16.9B | 23.9% | +14.4% | Source |
| FY2024 | $61.8B | $13.4B | 21.7% | +14.1% | Source |
| FY2023 | $54.1B | $9.1B | 16.8% | +0.9% | Source |
| FY2022 | $53.7B | $11B | 20.6% | -10.2% | Source |
| FY2021 | $59.8B | $15B | 25.2% | +22.6% | Source |
| FY2020 | $48.8B | $11B | 22.6% | +17.4% | Source |
| FY2019 | $41.5B | $9B | 21.8% | +3.6% | Source |
| FY2018 | $40.1B | $8.7B | 21.8% | +5.7% | Source |
| FY2017 | $37.9B | $6.1B | 16.1% | +9.6% | Source |
| FY2016 | $34.6B | $6B | 17.3% | — | Source |
Where the revenue comes from
Charles Schwab
- Net Interest Revenue49%
$11.750 billion in FY2025. The spread between what Schwab earns on client cash swept to Charles Schwab Bank, its investment portfolio, margin loans, Pledged Asset Lines, and mortgages, and what it pays clients on those balances. It is the most rate-sensitive line and fell during the 2023 cash-sorting period before recovering in 2024-2025.
- Asset Management and Administration Fees27%
$6.506 billion in FY2025. Fees on Schwab ETFs, mutual funds, and money market funds, managed and advisory programs such as Schwab Wealth Advisory, and third-party funds on the Mutual Fund OneSource platform. This line grows with markets and net new assets, so it partly offsets rate risk. It reached $1.8 billion in Q2 2026, up 16% year over year.
- Trading Revenue16%
$3.921 billion in FY2025. Options contract fees, payment for order flow, futures, and fixed-income markups. Online stock and ETF trades have been commission-free since October 2019, but record activity (11.9 million daily average trades in Q2 2026) has made trading a growing contributor again.
- Bank Deposit Account Fees4%
$977 million in FY2025, mostly fees earned from the insured deposit account arrangement under which certain client cash is swept to TD Bank.
- Other Revenue3%
$767 million in FY2025, including software and data fees, exchange processing fees, and other items.
Morgan Stanley
- Institutional Securities
Advisory, underwriting, sales and trading, prime brokerage, lending, and capital markets services.
- Wealth Management
Advisor fees, brokerage commissions, net interest income, lending, deposits, E*TRADE, and workplace services.
- Investment Management
Asset-management fees from institutional and individual investors, including Eaton Vance and Parametric products.
- Banking and lending
Net interest income and lending products connected to wealth and institutional clients.
Business model and strategy
Charles Schwab
How it makes money
Schwab offers $0 online commissions on U.S.-listed stocks and ETFs and earns revenue from five lines (FY2025 figures): 1) Net interest revenue, $11.75 billion: the spread between what Schwab earns on client cash swept to Charles Schwab Bank, margin loans, Pledged Asset Lines, and mortgages, and what it pays on those balances.
Growth strategy
Under CEO Rick Wurster, Schwab is focused on doing more for each client rather than just adding accounts. The playbook: grow wealth and advice (Schwab Wealth Advisory net flows rose 80% year over year in Q2 2026), expand lending through Pledged Asset Lines and mortgages, widen product access with Schwab Crypto and private-company shares via the $660 million Forge Global acquisition (closed March 2, 2026), keep winnin…
Competitive advantage
Schwab's edge is scale plus a low cost base. It held $13.08 trillion in client assets at June 30, 2026, and its expenses run at roughly 0.11% of client assets, so it can charge $0 commissions and still post a 51.9% GAAP pre-tax margin (Q2 2026). It is also the largest custodian for independent registered investment advisors, a sticky business-to-business franchise that grew with the TD Ameritrade deal.
Morgan Stanley
How it makes money
Morgan Stanley reports three segments. Institutional Securities earns advisory and underwriting fees, equity and fixed-income trading revenue, prime brokerage financing, and corporate lending income. Wealth Management earns asset-based advisory fees, brokerage commissions, and net interest income on client deposits and loans across its advisor network, E*TRADE, and Morgan Stanley at Work.
Growth strategy
The strategy is to grow client assets across the wealth and investment management franchise, use Morgan Stanley at Work and E*TRADE as feeders into advisor-led accounts, and keep share in equities, advisory, and underwriting. The firm also deploys AI tools for advisors, including assistants built with OpenAI.
Competitive advantage
Morgan Stanley's edge is the combination of a leading equities and advisory franchise with one of the largest wealth platforms in the US. Workplace stock plans and E*TRADE bring in employees and self-directed investors early, and advisor-led wealth management retains them as their assets grow. That mix of fee-based wealth revenue and cyclical Wall Street revenue gives it steadier earnings than a pure investment bank.
Questions about Charles Schwab vs Morgan Stanley
Which company has higher revenue — The Charles Schwab Corporation or Morgan Stanley?
The Charles Schwab Corporation reported $23.9B (FY2025), while Morgan Stanley reported $70.6B (FY2025). By last reported revenue, Morgan Stanley is the larger business, with The Charles Schwab Corporation reporting a smaller revenue base.
What is the market cap of The Charles Schwab Corporation vs Morgan Stanley?
The Charles Schwab Corporation's market capitalisation stands at $171.0B, while Morgan Stanley's is $330.9B. Morgan Stanley carries the higher market valuation, reflecting investors' expectations of its future earnings power relative to The Charles Schwab Corporation.
Which is more financially efficient — The Charles Schwab Corporation or Morgan Stanley?
The Charles Schwab Corporation generates $725k / employee in revenue per employee, while Morgan Stanley generates $851k / employee. Morgan Stanley shows higher revenue efficiency per headcount, though this reflects business model differences — capital-light software companies routinely outperform labour-intensive manufacturers on this metric.
How do The Charles Schwab Corporation and Morgan Stanley make money?
The Charles Schwab Corporation and Morgan Stanley generate revenue in fundamentally different ways. The Charles Schwab Corporation: Schwab offers $0 online commissions on U. Morgan Stanley: Morgan Stanley reports three segments.
Which company is valued higher relative to revenue — The Charles Schwab Corporation or Morgan Stanley?
On a price-to-sales (P/S) basis, The Charles Schwab Corporation trades at 7.1x P/S and Morgan Stanley at 4.7x P/S. The Charles Schwab Corporation commands a higher revenue multiple, typically indicating that investors expect faster growth or higher future margins compared to Morgan Stanley. A higher multiple is not inherently better — it may also signal that the stock is priced for perfection.
Is The Charles Schwab Corporation bigger than Morgan Stanley?
By last reported revenue, Morgan Stanley ($70.6B (FY2025)) is the larger company compared to The Charles Schwab Corporation ($23.9B (FY2025)). Revenue scale is one dimension of size — market capitalisation, employee count, and geographic reach are also relevant depending on the context.
Figures come from each company's filings and the sources linked beside them. Amounts reported in another currency are shown in US dollars at an approximate rate and marked with ~. Back to the Charles Schwab vs Morgan Stanley overview