* August trading volumes down 31 pct year-over-year
* Client assets rise, in line with gains in S&P 500
NEW YORK, Sept 17 (Reuters) - Charles Schwab Corp said on Monday its trading volumes fell 31 percent in August from a year earlier, highlighting the difficult environment for brokerage firms due to disengaged retail investors and low volatility in the markets.
Schwab, one of the largest U.S. brokerages, said its clients made an average of 375,900 trades a day in August, down 31 percent from August 2011 and down 5 percent from July.
The trading levels were 8 percent below the forecast of JMP Securities analyst David Trone and around 5.5 percent below the estimate of Macquarie Securities analyst Ed Ditmire.
Schwab, which had 8.7 million active brokerage accounts at the end of August, said its total client assets rose to a record $1.86 trillion. That was up 12 percent from a year earlier and up 2 percent from July, in line with the rise in the S&P 500 in the month.
The San Francisco-based firm said net new assets in August totaled $6.9 billion.
While the markets edged higher in August, trading levels at equities exchanges hit multi-year lows as concerns about the health of the economic recovery kept retail investors largely on the sidelines.
Online brokers TD Ameritrade Holding Corp and E*Trade Financial Corp both said last Tuesday their trading volumes were down 37 percent from a year earlier.
In August a year ago, volatility spiked on concerns over Europe's debt crisis and the downgrading of the U.S. credit rating, leading to a big increase in trading as investors tried to keep up with wild market swings.
Trading represents about 20 percent of annual revenue at Schwab, 40 percent at TD Ameritrade, and nearly 30 percent at E*Trade.