A new report from Fitch Ratings concludes that a prolonged period of elevated interest rates will bolster client-cash earnings at the largest U.S. wealth-management firms, though the magnitude and speed of the benefit will differ sharply depending on each company's balance-sheet structure and funding mix. The September 29 analysis covers Charles Schwab Corporation (rated A/Stable), LPL Financial Holdings (BBB/Stable), Raymond James Financial (A-/Stable), Ameriprise Financial (A-/Stable), and Stifel Financial (BBB+/Stable).
Wealth managers generate revenue on client cash by investing or lending uninvested balances at yields above the rates they credit to clients. When interest rates climb, yields on loans, floating-rate securities, and newly reinvested fixed-income holdings rise, widening the spread that drives net interest income. Fitch notes that net interest income surged at these firms during 2022 and 2023 as asset yields repriced upward, but the gains moderated as clients shifted low-yield sweep balances into money-market funds and other higher-paying products—a process known as cash sorting.
That sorting pressure has since eased as rates and client allocations have stabilized, but Fitch cautions that aggregate client cash and cash as a share of total client assets remain below historical norms, meaning balances have not fully returned to sweep accounts. The report identifies two key offsets to the earnings upside: higher deposit costs—what firms pay clients on retained balances—and the incomplete reversal of cash sorting.
Where the gains land—and how quickly
The timing and size of the benefit hinge on each firm's asset mix, funding profile, and sweep-program design. Schwab has the largest absolute earnings exposure to client cash, reflecting its substantially larger sweep-related deposit base. Its bank investment portfolio carries a 3.5-year duration alongside 4% floating-rate securities, so it benefits from loan repricing and the gradual reinvestment of fixed-rate holdings as they mature. In the second quarter of 2026, Schwab generated nearly $3.4 billion in net interest revenue, largely on approximately $485.7 billion held in sweep accounts.
Raymond James, which holds primarily floating-rate securities and corporate loans along with certain variable-rate sweep-fee arrangements with third-party banks, is positioned for more immediate earnings gains when rates rise, as its repricing responds faster to short-term rate movements. The firm reported $656 million in sweep-related profit on roughly $42.2 billion in swept cash in the same quarter. LPL, which does not operate its own bank and instead places client deposits with partner institutions that pay it a fee, holds about 40% of its insured cash account balances under variable-rate agreements as of the second quarter of 2026, according to Fitch. That structure means a portion of its earnings reprices relatively quickly, though the fixed-rate segment lags. LPL generated $1.66 billion from client cash—including sweep and money-market accounts—in 2025, per its annual report.
Ameriprise's bank investment portfolio, with a 4.2-year duration and 6% in floating-rate securities, is weighted toward fixed-rate assets, so repricing would be more gradual. Stifel's mix of commercial, fund-banking, and venture deposits makes it harder to isolate the revenue contribution from sweep balances specifically, Fitch noted.
Regulatory and litigation overhang
The report also flags ongoing regulatory and legal scrutiny over sweep practices as a layer of uncertainty. The SEC has focused on cash sweep account options for several years, with sizable settlements including a $187 million agreement with Charles Schwab in 2022 over misleading disclosures related to its robo-advisor cash program. More recently, the commission closed its probe into LPL's cash sweep program without enforcement action, according to a disclosure LPL made in January 2026.
Despite these pressures, Fitch's view is that higher yields on retained balances should support client-cash earnings growth relative to a lower-rate environment, provided firms manage their funding costs and sweep-program structures effectively. For advisors who custody with these firms or advise clients holding cash in sweep accounts, the broader debate over cash sweep transparency and pricing remains a live issue. The SEC's sustained focus on sweep disclosures, combined with a wave of litigation against major firms over allegedly low client yields, means the question of who benefits from rising rates on uninvested cash is unlikely to fade from client conversations anytime soon. As wealth managers face operational hurdles in other areas, and as advisors broaden ETF exposure amid shifting market dynamics, the cash-sweep issue remains a key point of focus for the industry.
