Schwab Blocks Outside AI Agents From Client Accounts

Charles Schwab is blocking outside artificial intelligence agents from accessing client accounts and directing investors to its own assistant, Charley, over security concerns linked to automated logins and browser access.

Chief Executive Rick Wurster told analysts on a Thursday earnings call that Schwab would not allow external agents to use clients’ credentials to enter its systems. The company permits some large language models, including ChatGPT, to connect with Schwab and complete certain transactions, but they cannot move money into or out of accounts.

“In terms of [large language models], we want to deliver AI to clients in a safe and secure way,” Wurster said. “And there’s one way we think is not safe, and that’s just an agent coming to our site and trying to log in on behalf of a client. We are not going to allow that.”

Schwab plans to introduce Charley in the coming months. The assistant currently provides information and summaries using external large language models and Schwab’s data. Its first client actions are expected to include changing an address and naming a trusted contact.

Wurster described future versions of Charley as a way for clients to complete a broader range of tasks through text or voice conversations on Schwab’s website. He called it a potential primary connection between clients and Schwab’s services.

The policy follows the release of Meta’s Muse assistant more than a month ago. Muse can make online purchases and prepare financial reports and budgets. It cannot move money from bank or brokerage accounts without the account holder’s permission. Security experts have raised concerns about agents that can access several online accounts.

JPMorgan Chase Chief Executive Jamie Dimon told analysts on Tuesday that the bank would not allow outside agents to enter its systems because of risks to clients and the company. Schwab receives notifications when it blocks an AI-driven agent, Wurster said. Such incidents remain infrequent because most clients do not use agents for financial activities.

The restrictions could affect how brokerages manage client cash. Through cash-sweep programs, brokerages transfer uninvested cash from client accounts to banks and retain part of the interest earned from lending it. An independent agent could identify idle cash and move it into higher-yielding investments.

Tim Welsh, founder of consulting firm Nexus Strategies, described the difference between the two types of agents this way: “An outside agent works for the client. Charley works for Schwab.”

Schwab reported nearly $3.48 billion in net interest revenue in the third quarter and held about $493 billion in cash-sweep accounts. Wurster said clients who use AI for trading are keeping more cash at Schwab because they are buying stocks more actively.

Schwab’s net new assets, excluding market gains and one-time events such as acquisitions, reached a record $190.4 billion in the third quarter, up 38% from a year earlier. Net revenue rose 17% to nearly $7.2 billion, while net income increased 23% to $2.9 billion.

Last month, Schwab announced that Anthropic’s Claude for Advisors assistant would become available to more than 16,000 independent registered investment advisers supported through its Schwab Advisor Services division.