New hybrid advisory service joins people and technology to give investors an easier and more affordable way to create and implement financial plans
Public Company Information:
SAN FRANCISCO--(BUSINESS WIRE)--Charles Schwab today announced plans to expand its suite of wealth management and advisory services with the launch of Schwab Intelligent Advisory, a hybrid advisory service that combines live credentialed professionals and algorithm driven technology to make financial and investment planning more accessible to consumers. Schwab Intelligent Advisory will provide investors with a financial plan tailored to their situation and goals, ongoing guidance and expertise from Planning Consultants who are all CERTIFIED FINANCIAL PLANNER™ professionals, and a fully automated and diversified portfolio − all at a very low cost. The service is expected to launch in the first half of 2017.
“Schwab Intelligent Advisory fully leverages what technology and people can deliver in tandem, focusing on serving clients based on their unique needs while delivering the kind of value they know they can expect from Schwab,” said Neesha Hathi, executive vice president with Schwab Investor Services. “This is a modern approach to financial planning and wealth management that mirrors what today’s consumers have come to expect in other aspects of their lives; how they invest should be no exception.”
According to Hathi, Schwab Intelligent Advisory is designed for an emerging or mass affluent investor focused on keeping costs low who doesn’t have a highly complex financial situation, but does have multiple goals and understands the importance of developing a personalized plan. The service will also appeal to those who enjoy leveraging technology to get things done, want to be in control of their finances, and appreciate having the ability to engage with a salaried financial professional when needed.
Schwab Intelligent Advisory, which will have a $25,000 investment minimum, includes:
- A comprehensive financial and investment plan. Clients will complete a self-guided online planning tool focused on their specific financial situation and goals including both Schwab and non-Schwab accounts, followed by a 1-1 conversation with a credentialed Planning Consultant to review the plan, prioritize goals, and discuss investment choices.
- Ongoing guidance from Planning Consultants. Schwab Intelligent Advisory clients will have access via phone or videoconference to a team of Planning Consultants – all of whom are CERTIFIED FINANCIAL PLANNER™ professionals. In addition to working with clients on their initial financial plan and investment choices, Planning Consultants can provide guidance on a range of wealth management topics including overall goals and saving targets, retirement planning, college savings, long-term care planning, and budgeting. Regular check-ins can be scheduled online and will typically occur annually, but clients can engage with Planning Consultants as needed, and they also have access to live service support via phone, chat, and email − 24 hours a day, seven days a week.
Fully automated, diversified portfolios. Based on their
financial plan, clients will be invested in a fully-automated,
diversified portfolio using Schwab
Intelligent Portfolios. The portfolios are comprised of low-cost
exchange-traded funds (ETFs) from Schwab and third-party providers
including Vanguard, iShares and PowerShares which are selected based
on quantitative criteria such as size, bid-ask spread, tracking
consistency, and operating expense ratio. Investors will have access
to up 20 globally diversified asset classes in each portfolio
including equities, fixed income, real estate, commodities, and an
FDIC-insured cash allocation to manage volatility and risk. The
portfolios also use a combination of fundamentally weighted and market
cap-weighted ETFs, giving investors an additional layer of
Schwab Intelligent Advisory clients will be able to open accounts for multiple goals – all based on their financial plan. While the minimum to enroll in Schwab Intelligent Advisory is $25,000, clients will be able to open additional individual accounts in the service for as little as $5,000. Clients can activate automated tax loss harvesting for each account starting at $50,000.
- A customized dashboard. Once the plan is in place and investments funded, clients will access a customized digital dashboard to view their plan, their progress toward goals, and portfolio performance – from both a desktop and mobile device.
- Low cost. Advisory fees under Schwab Intelligent Advisory are 0.28% of a client’s managed assets with a $900 quarterly fee maximum, making it one of the lowest cost advisory solutions available to investors today. The service will charge no trading commissions or account service fees, and the ETFs included are based on the lowest fees in the ETF industry once they meet size, spread and tracking consistency criteria. The weighted average operating expense ratio for the portfolios currently range from 0.08% for a conservative portfolio, 0.19% for a moderate portfolio, and 0.24% for an aggressive portfolio.
In addition, Schwab Intelligent Advisory will offer a completely paperless account opening and account management experience, and clients will be able to establish automated account funding on a reoccurring basis, as well as fund accounts using mobile check deposit.
“There’s an entire population of self-directed investors who aren’t self-directed by choice – they simply haven’t found an advisory model that works for them yet,” said Hathi. “The barrier might be lack of trust and transparency, cost, complexity or general inertia, but there’s a real need to make financial planning and advice more accessible. Schwab Intelligent Advisory democratizes the process by making it easier and more affordable to build and maintain a plan, stay invested, and access professional guidance along the way.”
About Charles Schwab
At Charles Schwab we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.
Diversification strategies do not ensure a profit and do not protect against losses in declining markets. Deposit Balances held in the Sweep Program at Schwab Bank are eligible for FDIC insurance up to allowable limits.
Schwab Intelligent Advisory charges no commissions or account service fees. Schwab affiliates do earn revenue from the underlying assets in Schwab Intelligent Portfolios accounts. This revenue comes from managing Schwab ETFs™ and providing services relating to certain third party ETFs that can be selected for the portfolio, and from the cash feature on the accounts. Revenue may also be received from the market centers where ETF trade orders are routed for execution.
Please read the Schwab Intelligent Advisory™ disclosure brochures for important information about this program.
Schwab Intelligent Advisory™ is made available through Charles Schwab & Co., Inc. (“Schwab”), a dually registered investment adviser and broker-dealer. Portfolio management services for Schwab Intelligent Portfolios™ are provided by Charles Schwab Investment Advisory, Inc. ("CSIA"), a registered investment adviser, and offered through Schwab Wealth Investment Advisory, Inc. (“SWIA”). Please refer to the disclosure brochures for details about Schwab Intelligent Advisory. Free credit balances are swept into deposit accounts at Charles Schwab Bank (“Schwab Bank”). Brokerage products and accounts are offered by Schwab, Member SIPC. Deposit and lending products are offered by Schwab Bank, Member FDIC and an Equal Housing Lender.
Schwab, CSIA, SWIA and Schwab Bank are affiliates and are subsidiaries of The Charles Schwab Corporation.
Through its operating subsidiaries, The Charles Schwab Corporation (NYSE: SCHW) provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, www.sipc.org), and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; compliance and trade monitoring solutions; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at www.schwab.com and www.aboutschwab.com.
Brokerage Products: Not FDIC Insured • No Bank Guarantee • May Lose Value