Charles Schwab Announces Availability of Institutional Intelligent Portfolios – Automated Investment Management Platform for Independent Registered Investment Advisors

Charles Schwab combines new automated investment management technology with its industry-leading custody platform in a fully integrated and highly customizable platform for Registered Investment Advisors (RIAs)

Tuesday, June 23, 2015 11:00 am PDT

Dateline:

SAN FRANCISCO

Public Company Information:

NYSE:
SCHW
"Institutional Intelligent Portfolios is a pivotal addition to the breadth of offerings for RIAs at Charles Schwab"

SAN FRANCISCO--(BUSINESS WIRE)--Today Charles Schwab announced the launch of Institutional Intelligent Portfolios™ -- an automated investment management platform designed specifically for RIAs and sponsored by Schwab Wealth Investment Advisory, Inc. Institutional Intelligent Portfolios enables firms to reach new market segments and scale their businesses, while complementing the invaluable wealth management services and client experience advisors already provide today.

Institutional Intelligent Portfolios offers RIA firms flexibility across portfolio construction, ETF selection, and branding for their client experience. Firms can create their own set of portfolios, reflecting their investment philosophy and choosing from more than 450 ETFs across 28 asset classes and all major fund families at their discretion. Those ETFs represent more than 80 percent of the total ETF assets currently held by advisors’ clients at Schwab, and cover nearly 100 percent of advisors’ clients’ assets invested in ETFs selected for the 28 asset classes represented in Institutional Intelligent Portfolios.

“Advisors see the opportunities ahead of them – whether the transfer of wealth from one generation to the next, the emergence of Generation Now investors, or the shifting investment priorities of retired clients,” said Bernie Clark, executive vice president and head of Schwab Advisor Services. “Recent research1 found that 70 percent of advisors believe that technology advancements enable firms to provide clients with a better experience, and many firms have identified automated solutions as a key opportunity in their firm’s growth strategy. Personally, I am very excited to see how entrepreneurial advisors use Institutional Intelligent Portfolios to expand their reach and to scale some elements of their practice.”

Customized platform

With Institutional Intelligent Portfolios, advisors can customize the platform to meet their business needs by determining their portfolio strategies and account features, setting each portfolio’s asset allocation and selecting their ETFs. They can also brand the client experience with their firm’s logo and contact information.

Upon completion of an initial Investor Profile Questionnaire – a series of questions about the investor’s investing goals and risk tolerance – the advisor’s client is mapped to one of the advisor-designed portfolios. Advisors then make a final review of the client’s profile and portfolio assignment and adjust it if necessary before approving it, at which time money can be invested. All portfolios must maintain a minimum allocation of 4 percent in cash.

Once established, these accounts can be automatically enrolled, with the advisor’s client’s agreement, for electronic delivery of trade confirmations, statements, communications and other documents, and advisors’ clients can access their account using Schwab Alliance or through a dedicated website and mobile app.

Integration with existing Schwab systems

Institutional Intelligent Portfolios accounts will be displayed in Schwab Advisor Center (Schwab’s desktop client management system for RIAs), alongside the advisor’s other client accounts. Data on Institutional Intelligent Portfolios accounts will be available for download through Schwab Data Delivery to use in advisors’ portfolio management systems, including those offered through Schwab Performance Technologies such as PortfolioCenter, Schwab’s portfolio management tool for advisors. Users of Schwab OpenView Gateway also will be able to access real-time information on these accounts through all participating third-party applications.

Unmatched value

The program’s pricing structure is based on total assets custodied with Schwab outside of the Institutional Intelligent Portfolios program. For advisors with less than $100 million in assets under management (AUM) with Schwab, there will be a 10 basis point platform fee. For those firms who maintain more than $100 million in AUM at Schwab, there will be no fee. No account service fees, trading commissions or custody fees will be charged to advisors’ clients by Schwab.

Support for advisors and their clients

Schwab will also provide extensive resources and support to RIAs to help them evaluate and set up Institutional Intelligent Portfolios for their firms. A dedicated, specialized advisor service team will support technical and platform functionality. For clients of advisors, Institutional Intelligent Portfolios offers 24/7 customer service when the advisor is unavailable.

“Institutional Intelligent Portfolios is a pivotal addition to the breadth of offerings for RIAs at Charles Schwab,” said Clark. “Using technology to automate portions of the investment process can create efficiencies and scale for firms and enables them to augment their full-service wealth management capabilities for a broader range of clients.”

1 Charles Schwab Independent Advisor Outlook Study, June 2015

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.

More information is available at www.aboutschwab.com. Follow us on Twitter, Facebook, YouTube and LinkedIn.

Disclosures

Schwab affiliates earn revenue from the underlying assets in Institutional 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.

Cash Balances are held in the Sweep Program at Schwab Bank and are eligible for FDIC insurance up to allowable limits.

Schwab investment professionals are employees of Charles Schwab & Co., Inc.

See the Institutional Intelligent Portfolios™ disclosure brochure for important information.

Brokerage Products: Not FDIC-Insured · No Bank Guarantee · May Lose Value

Institutional Intelligent Portfolios™ is made available through independent investment advisors and is sponsored by Schwab Wealth Investment Advisory, Inc. ("SWIA"), a registered investment advisor. SWIA is an affiliate of Charles Schwab & Co., Inc. (“CS&Co.”) and is a subsidiary of The Charles Schwab Corporation.

Independent investment advisors and Schwab are independent of each other and are not affiliated with, sponsored by, endorsed by, or supervised by each other.

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.

Schwab Advisor Services™ serves independent investment advisors and includes the custody, trading and support services of Charles Schwab & Co., Inc., Member SIPC.

Media Inquiries
Anita Fox
Charles Schwab
415-667-1308
Anita.Fox@schwab.com

Institutional Intelligent Portfolios™ Media Fact Sheet

The emergence of automated investment management is a key consideration for advisors today, fueled by the evolution in technology, new market entrants and changing client expectations. Schwab Wealth Investment Advisory, Inc. sponsors Institutional Intelligent Portfolios to meet the needs of independent registered investment advisors (RIAs) - to help them grow more efficiently, while complementing the invaluable wealth management services and client experience they already provide.

Diverse set of portfolios designed by RIAs to reflect their investment philosophy

  • Built by advisors from a selection of more than 450 Exchange Traded Funds
  • ETF’s across all major fund families and representing up to 28 asset classes
  • Up to 45 unique portfolios per firm which can include:
    • Taxable and IRA-specific portfolios
    • Municipal bond portfolios
    • Income portfolios

Seamless and simple client onboarding

  • Paperless and streamlined account opening and funding process
  • Clients of RIAs answer a profile questionnaire to assess investing goals and risk tolerance
  • Maps clients to one of the advisor-designed portfolios
  • Provides flexibility for clients to adjust portfolio selection, but with final approval from advisor
  • Works with the Schwab systems and services an RIA uses every day

Advisor-branded, digital experience for clients of RIAs

  • Dedicated website and mobile app experience where a firm can place their logo, select a color scheme, and post firm contact information
  • It will also:
    • Provide visualization of portfolio asset allocation, along with an activity feed
    • Display dynamic, on-demand performance reporting for clients
    • Facilitate conversations via co-browsing, where clients can grant access for their advisor to see what they see
    • Clients can also see all of their accounts displayed on SchwabAlliance.com
    • Provide 24/7/365 customer service support from Schwab financial professionals for clients of RIAs

Automated account alerts, rebalancing and tax-loss harvesting

  • Electronic delivery of trade confirmations, statements, communications and other documents
  • Accounts must maintain a minimum balance of $5,000 to be eligible for automatic rebalancing
  • Automated tax-loss harvesting for accounts over $50,000 if the advisor chooses to offer to client base; clients enroll if their advisor makes this service available
  • All portfolios must maintain a minimum allocation of 4 percent in cash

Unmatched value to help firms grow and serve clients efficiently

  • No account service fees, trading commissions or custody fees charged to clients
  • RIAs determine management fees, which can be billed through the standard Schwab custodial billing process
  • Advisor pricing is based on assets custodied at Schwab above and beyond any funds invested in
  • Institutional Intelligent Portfolios:
    • No program fee for advisors with firms that maintain more than $100 million in custody with Schwab, above and beyond Institutional Intelligent Portfolios assets
    • 10bps program fee for advisors with firms that custody less than $100 million with Schwab

Supported by the strength of the industry’s leading custodian—Schwab

  • Nearly 30 years serving advisors, and the leading custodian for clients of RIAs
  • The service, safety and security RIAs depend on every day from Schwab
  • Dedicated advisor support team that understands RIAs’ unique needs

Intended for media use only

Schwab affiliates do earn revenue from the underlying assets in Institutional 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.

Tax-loss harvesting is available for clients with invested assets of $50,000 or more in their Institutional Intelligent Portfolios account. Clients

must be enrolled to receive this service.

Accounts must maintain a minimum balance of $5,000 to be eligible for automatic rebalancing.

Cash balances held in the Sweep Program at Schwab Bank are eligible for FDIC insurance up to allowable limits.

Schwab financial professionals are employees of Charles Schwab & Co., Inc.

Brokerage Products: Not FDIC-Insured • No Bank Guarantee • May Lose Value

Institutional Intelligent Portfolios is made available through independent investment advisors and is sponsored by Schwab Wealth Investment Advisory, Inc.(“SWIA”), a Registered Investment Advisor. SWIA is an affiliate of Charles Schwab & Co., Inc. (“CS&Co.”) and a subsidiary of The Charles Schwab Corporation.

Charles Schwab & Co., Inc. and Charles Schwab Bank are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation. Brokerage products, including the Schwab One® brokerage account, are offered by Charles Schwab & Co., Inc., Member SIPC. Deposit and lending products are offered by Charles Schwab Bank, Member FDIC and an Equal Housing Lender. Schwab Advisor Services™ serves independent Investment Advisors and includes the custody, trading and support services of Charles Schwab& Co., Inc., Member SIPC. Independent investment advisors and Schwab are independent of each other and are not affiliated with, sponsored by, endorsed by, or supervised by each other.

©2015 Schwab Wealth Investment Advisory, Inc. All rights reserved.

(0615-4426)

Contact:

Charles Schwab
Susan Forman, 415-699-1654
susan.forman@schwab.com
or
The Neibart Group
Shree Dhond, 718-801-8301
sas@neibartgroup.com

Multimedia Files:

Institutional Intelligent Portfolios™ Media Fact Sheet
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