Charles Schwab CEO: AI agents trading on your behalf need 'rules of the road'

The rise of AI-driven trading on platforms such as Robinhood ( HOOD ) and Coinbase ( COIN ) is not lost on Charles Schwab ( SCHW ) CEO Rick Wurster. (Disclosure: Yahoo Finance has a partnership with Coinbase.)

He's down with it — as long as there are proper guidelines.

"I think if you have an AI agent that is trading on your behalf, you have given it a lot of thought. I think an AI agent should only trade on your behalf if you give them the rules of the road," Wurster said on Yahoo Finance.

"You work with them to build a process, just like you come on our site today and research a stock, put in a limit order. That's how I think you're going to need to work with an agent," he added. "The idea that you would just say to an agent, 'Hey, go buy me stocks and trade for me,' I think that is risky. But to be able to say, 'Hey, here's how I want to buy stocks. Here's my methodology. Here's my process, and I'm going to oversee this,' I think that makes sense. But just handing the keys over, I think that, to me, that's a leap too far. It is risky."

The brokerage giant will soon debut Charley, the company's new AI-powered conversational assistant. It will not be an agentic trading bot .

Out of the gate, Charley will be able to take action on a client's behalf for some administrative tasks, such as changing an address or naming a trusted contact. Over time, the company envisions it becoming a "front door" to the Charles Schwab platform.

Charles Schwab had a generally solid third quarter without AI agents trading on behalf of humans, though Wall Street saw a few yellow flags.

Adjusted earnings rose 29% year over year to $1.69 a share, topping Wall Street expectations. Revenue climbed 17% to a record $7.17 billion, just shy of analyst estimates.

The company benefited from a surge in trading activity, fresh client assets, and higher interest income.

Charles Schwab attracted a record $190.4 billion in core net new assets, up 38% from a year ago, as daily average trading volume jumped 44% to 10.7 million trades. Net interest revenue increased 14% to $3.48 billion.

The company said full-year revenue and expense growth would be toward the low ends of its prior ranges of +17.5–18.5% and +9.5–10.5%, respectively.

"An expense driven EPS beat was overshadowed by the net interest income miss and softer fiscal year guidance. In our view, the main takeaway is that organic growth looks strong, with record NNA of $190 billion, and client lending demand remains healthy, but slower client cash growth is increasing reliance on higher-cost wholesale funding and pressuring the near-term NIM outlook," Evercore ISI analyst Glenn Schorr said.