Schwab Pledged Asset Line Balances Reach $37.3 Billion in Q3 2026 10-Q, Up 40% From December 2025

The balances, broker by broker

Securities-based lending (SBL) lets a client borrow against stocks, bonds and funds in a brokerage account without selling them. Brokers book it through a bank affiliate, so the numbers are in their bank-loan tables. We took the latest balance, the December 31, 2025 balance and the September 30, 2025 balance from each broker's own filings. The lines are not identical: Morgan Stanley's includes "Other" lending, Raymond James's fiscal year ends September 30 so its latest 10-Q is June 30, 2026, and Stifel reports in thousands.

Three readings, each limited to what the filings show.

• Schwab's growth is the outlier. PALs rose $10,693 million in nine months, which is more than three times Stifel's entire securities-based book (our arithmetic). Schwab's 10-Q ties bank-loan growth to "strong client demand for pledged asset lines" and first mortgages. Receivables from brokerage clients, mostly margin loans, rose to $128.1 billion, up 22% from year-end 2025, so clients are borrowing against portfolios in both forms.
• Share of the loan book. PALs are $37,296 million of $72,330 million of Schwab bank loans (51.6%). At Stifel securities-based loans are 11.6% of $25.9 billion of gross bank loans, down from 12.1% at December 31, 2025 because fund banking grew faster.
• What the table does not show. None of these filings says what the money was borrowed for, how many clients borrow, or how close any portfolio is to a call. Balances are a measure of the broker's exposure, not of borrower stress.

What the filings say about losses and delinquency

Schwab discloses a past-due table for PALs; Raymond James does too. Morgan Stanley and Stifel give a qualitative statement. LPL gives none.

Schwab's wording is the useful part. It says it charges off "any unsecured balances no later than 90 days past due," that "substantially all PALs are also subject to the collateral maintenance practical expedient," and that "all PALs were fully collateralized by securities with fair values in excess of borrowings as of September 30, 2026 and December 31, 2025, and no allowance for credit losses for PALs as of those dates was required." In Q3 2026 PALs show a $4 million recovery and no charge-off. The 10-K says the credit loss in this portfolio is limited because "collateral market value is monitored on a daily basis and a borrower's credit line may be reduced or collateral may be liquidated if the collateral is in danger of falling below specified levels." That protects the lender; what it does to the borrower is the next section.

Morgan Stanley says its Wealth Management "securities-based lending portfolio remains well-collateralized and subject to daily client margining." Raymond James says SBL "are primarily collateralized by the borrower's marketable securities at advance rates consistent with industry standards," and shows $39 million of SBL rated special mention at June 30, 2026 with nothing substandard. Stifel says its allowance method for these loans looks at the liquidity and trading volume of the collateral, position concentration and "personal guarantees." The absence of losses in a calm quarter says little about a quarter in which prices fall; these loans are designed so that the lender is repaid first, by selling the collateral.

How each broker sets the rate and what the line cannot be used for

Only Schwab publishes a rate formula we could date. Everything here comes from the brokers' own pages, retrieved November 9, 2026, and FINRA's investor insight dated January 3, 2024. Pages change without notice; check the live page before relying on any figure.

Two details matter more than the rate. First, Schwab's rate table is by the loan value of the collateral at origination, not by what you draw: a $1,000,000 portfolio and a $200,000 draw are priced as the collateral tier. Second, Schwab states the APR "is variable and may change weekly," and that it may change the SOFR reference, the spread or the post-demand spread after the line is open. FINRA adds that interest is "usually charged monthly," that payments are interest-only, and that if rates rise "it could cause a spike" in the rate on your loan. The Federal Reserve's Regulation U, which Stifel's 10-K cites for its securities-based loans, is the rule behind the ban on using these loans to buy margin stock.

Who uses it and why

The filings do not profile borrowers. What the brokers' own pages describe is a client with a large portfolio and a cash need that does not justify selling.

• Buying a home or property without selling. Morgan Stanley lists "make an all-cash offer when buying a new home." Stifel says many clients "present real estate contracts as a "cash buyer" and then secure a permanent mortgage after closing," and that a SPA loan "can be used as short-term, low-cost funding to bridge the gap between making a purchase today and then selling down the road." Schwab names home purchase or renovation and tax payments.
• Avoiding a taxable sale. Morgan Stanley's page presents the line as financing "potentially without the tax implications of liquidating your assets," and Schwab's says it can help "avoid the tax consequences that come with selling securities." FINRA's counterpoint is that a forced sale after a call can bring capital gains tax, often without notice.
• A 1031 exchange. The reader brief for this page assumed borrowing could bridge a 1031 exchange. None of the broker pages we saved says so, and an exchange has its own 45-day and 180-day clocks and rules on how sale proceeds are held; see our 1031 exchange timeline and our comparison of the companies that hold exchange funds. If a lender says a line can be used for an exchange, ask for that in writing.
• Investment property. Stifel mentions "managing the purchase and construction of commercial or investment properties." For lenders who underwrite the property rather than the portfolio, see our analysis of portfolio loans for investment property in HMDA data.

A call scenario (our arithmetic)

Every input below is an assumption of ours except the Schwab rate tier and SOFR date. Schwab publishes advance rates per security, so the 50% is only an illustration inside the 50% to 95% range FINRA describes as typical.

The point of the example is the distance to the call, 20% here, which depends entirely on the advance rate and how much of the line is drawn. With a 70% advance rate and the same $400,000 draw the call comes at a 43% fall; with a 50% advance rate and a $450,000 draw it comes at 10% (our arithmetic). A concentrated portfolio can fall faster than the index, which FINRA flags.

What a reader can do with this

• Ask for the advance rates in writing, for your own securities, not the broker's average. Schwab has an Advance Rate Lookup tool; the lookup page says the rates in your account "may be different."
• Ask who can call the line and on what notice. The four sources we read say any time, with no right to an extension at Stifel; FINRA's typical cure period is two or three days.
• Ask whether the rate is variable weekly, what the spread is for your collateral tier, and whether discounts are in the quote. Schwab's table excludes its discount of 0.25% to 1.00%.
• Price the call, not the draw. Work out the portfolio value at which you would be called and what you would sell, and the tax on that sale.
• Do not count on the line in a stress year. Because the lender can demand repayment at any time, it may be least available when prices are falling.
• Check who the lender is. At each broker the loan is made by a bank affiliate, not the brokerage; FINRA suggests asking who monitors the account and how you would be notified.

This is analysis of public documents, not investment, legal or tax advice.

If you are weighing a line against your holdings, or a call would force a sale in a taxable account, a second opinion on your own numbers may help.

FAQ

Sources: Charles Schwab Corporation Forms 10-Q for September 30, 2026 (0000316709-26-000038) and September 30, 2025 (0000316709-25-000051) and Form 10-K for 2025 (0000316709-26-000009); Morgan Stanley Forms 10-Q (0000895421-26-000293, 0000895421-25-000539); Stifel Financial Corp. Forms 10-Q (0001193125-26-446268, 0001193125-25-266891) and 10-K for 2025 (0001193125-26-067130); Raymond James Financial Forms 10-Q (0000720005-26-000070, 0000720005-26-000035) and 10-K for fiscal 2025 (0000720005-25-000093); LPL Financial Form 10-Q (0001628280-26-068226); the Schwab Pledged Asset Line pages (schwab.com/pledged-asset-line, /rates, /faqs), Morgan Stanley's Liquidity Access Line page and Stifel's private client lending page, all retrieved November 9, 2026; and FINRA's "Securities-Backed Lines of Credit Explained," January 3, 2024. Raymond James's own SBL product page could not be retrieved, so its terms are not compared.