Meta launched a consumer artificial-intelligence assistant called Muse in late September, and among the shares that fell hardest were those of a company whose largest earnings engine is holding other people's idle cash. Charles Schwab, the retail brokerage and custodian for independent advisers that also owns banks, dropped 6.1% on 22 September to close at $100.35, on 16.9m shares against a typical 5m to 9m, its heaviest-volume down day of the quarter. LPL Financial fell 7% and Raymond James 3.5% on the same reasoning; the Nasdaq Composite rose 0.45% that day.

The trade priced a belief — that an assistant managing a household's money erodes demand for paid advice. Schwab's own revenue decomposition says that is the thinnest part of the franchise. Managed investing solutions produced $707m of the record $7.07bn of net revenues reported for the June quarter, about a tenth. Net interest revenue was $3.4bn, 47% of the total and up 19% on the year.

The line that got sold is not the line that pays

That $3.4bn is a banking spread wearing a brokerage's clothes. Uninvested client balances are swept off the brokerage statement into Schwab's own banks, reinvested, and paid back to the client at a rate Schwab sets. Transactional sweep cash ended June at $485.7bn, roughly 3.7% of $13.08trn in client assets, with on-balance-sheet bank deposits of $249.7bn and a further $70.6bn parked at third-party banks, where fees rose 35% on improved net yield. Margin loans add a second spread, at $165.1bn of client balances.

Six days before Muse, the Federal Reserve raised its target range 25bp to 3.75-4.00% in a unanimous vote, its first increase since 2023. A higher funds rate lifts the reinvestment yield on swept cash while the client rate stays administered. Net interest margin had already widened 12 basis points in the quarter to 3.00%, with management guiding fourth-quarter margin to 3.25-3.30%.

One caution the pitch usually omits: the cheap part of that repair is done. Higher-cost bank supplemental funding fell $44.8bn during 2025 to $5.1bn, so further expansion has to come from securities repricing and the policy rate. Asset gathering, meanwhile, accelerated: $120bn of core net new assets in the quarter, then a record August gather of $64.8bn, up 46% year on year.

Schwab lost 9.9% over the thirty sessions to 9 October, to $96.70. Interactive Brokers lost 3.8% in the same stretch and an S&P 500 index fund rose 2.2%, so the de-rating was Schwab's own.

Robinhood is paid rebates — and so is Schwab

Robinhood Markets, the 2,900-employee US platform for stocks, options, gold and crypto, is the supposed mirror: order-flow rebates instead of commissions. The mirror is cloudy. Schwab booked $528m of commissions and $624m of order-flow revenue in the June quarter, and that order-flow line alone exceeded Robinhood's entire $342m options business.

Robinhood's net revenues rose 32% to $1.31bn with net deposits of a record $21.7bn, while crypto revenue fell 38% to $100m and event contracts — regulated betting on outcomes — rose more than tenfold to $156m. Its cash spread is the laggard: net interest revenues grew only 9% to $389m, held back by lower short-term rates and weaker securities lending. Where the two firms differ is deliberate. Schwab chief executive Rick Wurster told the 21 July call the firm would support financial-event and economic-data products but has "no interest" in sports gambling or non-financial betting.

Robinhood fell 6.7% over the same thirty sessions, as bitcoin broke below $81,000 on 8 October and crypto liquidations approached $1bn. At 49.6x forward earnings against 47.2x trailing, consensus has FY26 earnings up 7.7% after 2025's 114%.

Nu's benchmark sits in Brasília

Nu Holdings, the São Paulo digital bank with 139m customers, shares the sector label and none of the plumbing. Its cost of deposits was 88% of the Brazilian interbank CDI rate, three percentage points better than a year earlier, funding an unsecured card and lending book: net interest income of $3.7bn and margin up 180 basis points to 22.9%. Copom cut the Selic to 13.75% on 16 September, the same week the Fed hiked. The blemish is credit — 90-day-plus non-performing loans rose 35 basis points to 6.9%. Nu rose 6.8% over the thirty sessions, trades at 18.5x forward against 21.8x trailing on a 33% return on equity, and reported-dollar revenue growth of 49.9% against 39% excluding currency, so roughly ten points of the headline was the real.

Which anchor you pick decides the answer

The business results account for none of Schwab's fall and arguably argue the other way. What they cannot settle is value, because Schwab's two anchors disagree. On earnings it is 14.9x forward against 17.5x trailing, the gap implying consensus FY26 earnings per share of $6.49, a third above FY25. On bank capital it is near 6.9x tangible book value of $14.10 a share, against a ten-year median of 5.29 — a premium, not a discount. Sell-side opinion split accordingly: Piper Sandler cut its target to $100 on 2 October while Bank of America raised its to $95 and stayed at Underperform.

The three names did not move together because they are not paid alike: Schwab on an administered deposit rate the Fed just made more valuable, Robinhood on volatility and product launches, Nu on a discount to a falling Brazilian benchmark.

Schwab reports third-quarter results before the open on 15 October, with consensus looking for $1.67 a share. The number that matters is the margin on cash, which is the one line Meta's assistant cannot touch.