Schwab CEO Says Firm Blocks Tens of Outside AI Agent Attempts a Week, Calls Building AI Trading Strategies a 'Fool's Errand'

Since Schwab and JPMorgan joined the list of financial firms shutting out outside AI agents, Schwab CEO Rick Wurster has put numbers and limits on the policy. He did it on the company's third-quarter earnings call and in a Bloomberg Television interview on Friday, Oct. 16.

What Schwab is blocking

"We are blocking unauthorized agents who try to log in on behalf of clients," Wurster told analysts on the earnings call.

He told Bloomberg TV the problem is clients handing their passwords to an agent, such as Meta's Muse, that then acts for them. "We can't control it, the client can't control it, something could go wrong and who's liable?" he said.

Wurster said he gets a weekly report on the blocks. The big agents are stopped "in the tens and twenties" each week, he said.

His read of that figure: clients are not yet ready to hand their accounts to AI.

The read-only door

Schwab is not shutting AI out entirely. It plans to let a client's chosen AI model connect through Model Context Protocol (MCP) servers, which operate under permissions Schwab sets.

Through those links, outside tools could pull account balances and research. They could not move money, Wurster said.

Schwab's own assistant, Charley, announced Sept. 30, follows the same line. It can answer questions and handle some administrative tasks. It cannot execute transactions.

There is a sanctioned route already. Wurster said a subset of active traders connect their own large language models to Schwab through its APIs and a managed client platform layer. The number of clients trading that way "has doubled in about the last six months." Schwab also plans a pilot letting traders connect the AI model of their choice, starting with Claude, plus an AI assistant for its thinkorswim platform.

Not in the alpha business

Wurster also ruled out Schwab building its own AI trading strategies. "I don't think we want to be in the game of trying to produce quantitative alpha for our clients," he said, calling the idea a "fool's errand."

He favors AI that acts like a careful human investor: researching stocks and placing limit orders under rules the user sets, with someone watching.

The cash question

Wurster addressed a fear he says exists about Schwab's business. "I know one of the fears in the market about us is that as AI takes off, it will impact cash levels," he said.

His response: "We're actually seeing the opposite impact, that the more people use AI, the more cash they hold because they're more active in buying stocks." Those clients, he said, are "focused on finding their next great investment."

That claim comes from Wurster alone. Schwab has not published the underlying cash figures for AI-connected accounts.

A related worry comes from Apollo Global Management chief economist Torsten Slok. In September he warned that capable financial assistants could produce an "agentic bank run," in which software constantly shifts household cash toward higher-paying alternatives.

JPMorgan's line

JPMorgan CEO Jamie Dimon took a similar position on the bank's Oct. 13 earnings call. "You don't want rogue agents, and there could be thousands of them," he said.

Dimon also warned customers who give third-party agents access to their accounts that they own that choice. "There's a liability transfer. They should understand the liability transfer," he said.

JPMorgan already lets some third-party tools view account data but not send money or pay bills, according to Cybernews.

Open liability and security questions

The liability question Wurster raised has no settled answer. AI agent liability is still being debated in Congress. Forkast's policy analysis says bills including the Warner AI AGENT Act and the Hawley-Murphy AI Agent Accountability Act have stalled in committee.

The read-only approach has its own risk. MCP links have had security flaws, and Google and JPMorgan were among those that fixed the same one, The Next Web reported.

The quarter behind the comments

Schwab reported client assets of $13.3 trillion at the end of the third quarter. Revenue rose 16.9% from a year earlier to $7.17 billion, in line with Wall Street expectations. Non-GAAP earnings were $1.69 per share, 2.1% above the consensus estimate.

The firm added 1.2 million new brokerage accounts. The stock closed down 2.73% at $94.16 on Thursday, Oct. 15, after trading near $96.80 before the report. It is down 12.64% over the past month and 5.76% so far this year.

CFO Mike Verdeschi said future results will depend on deposit trends, lending growth and interest rates.

The next concrete marker is the Claude pilot. Schwab has not said when it will launch or how many traders will be admitted.

Its rollout will show whether a firm that blocks credential-sharing agents can still attract the AI-driven traders Wurster says are doubling.