Charles Schwab Unveils Institutional Intelligent Portfolios Details

Automated investment management solution for RIAs offers broad customization; competitive pricing at 10 basis points; no fee for advisors with $100MM+ custodied at Schwab

Monday, March 23, 2015 11:00 am PDT

Dateline:

SAN FRANCISCO

Public Company Information:

NYSE:
SCHW
"Automated investment management is a transformative topic in our industry today. Technology advancements, new market entrants and shifting consumer preferences for conducting more of their business online are driving this movement to investment automation"

SAN FRANCISCO--(BUSINESS WIRE)--More than 3100 Schwab Advisor Services clients registered for a company webcast today to hear details on Institutional Intelligent Portfolios™ – the company’s automated investment management solution for independent registered investment advisors (RIAs). Among its robust feature set, Institutional Intelligent Portfolios will offer advisors the opportunity to create a diverse set of client portfolios utilizing more than 200 ETFs across all major fund families, a sophisticated advisor-branded digital experience for clients of advisors, integration with Schwab systems, and a two-tiered pricing structure based on total assets custodied with Schwab – all supported by the strength and expertise of the industry’s leading custodian. Institutional Intelligent Portfolios will be available in Q2 2015.

Advisor Services’ executive vice president, Bernie Clark, Schwab Intelligent Portfolios executive vice president, Naureen Hassan, and Advisor Services technology and strategy senior vice president, Neesha Hathi led today’s webcast, which addressed the changing investing landscape and details of Schwab’s advisor platform.

“Institutional Intelligent Portfolios provides RIA firms with access to a sophisticated, technology-based solution that can help RIAs capture and serve the transfer of wealth between generations, enable them to reach a broader market segment, and perhaps even serve some existing clients’ needs,” said Bernie Clark, executive vice president and head of Schwab Advisor Services. “With this in mind, Institutional Intelligent Portfolios can be deployed by RIAs in a way that suits their business and can play a valuable role in serving more clients in an efficient and profitable way, while complementing the invaluable wealth management services and client experience RIAs currently provide. More than just a new technology, this solution is an opportunity for RIAs to continue to transform the advisor office to better serve new and existing clients.”

With more than one-third (36%) of independent registered investment advisor (RIA) firms doubling their assets under management and revenues in the past five years1, RIA firms are actively seeking ways to institutionalize their business operations and processes to support firm growth and meet the evolving needs of existing and emerging clients. According to Schwab research, most advisors (56%) believe automated investment management solutions could supplement their current offerings and help drive growth2. Furthermore, 79 percent of firms are serving clients with assets below their firm’s stated minimum.3

“Automated investment management is a transformative topic in our industry today. Technology advancements, new market entrants and shifting consumer preferences for conducting more of their business online are driving this movement to investment automation,” said Naureen Hassan. “We designed Institutional Intelligent Portfolios to deliver scale and seamless integration to advisors in addition to what we believe is a hard-to-match feature set to help advisors maximize their investing and client expertise, while also expanding their reach as efficiently as possible.”

Robust ETF portfolios — portfolios designed by RIAs

With Institutional Intelligent Portfolios, advisors will make a number of decisions that reflect their investment philosophy and how they want to use the solution for their clients. Advisors can design portfolios for their clients selecting, at their discretion, from a broad set of more than 200 ETFs and 28 asset classes across all major fund families using four strategies; taxable and IRA-specific portfolios, municipal bond portfolios, or income portfolios. Advisors may choose to offer tax-loss harvesting. Portfolios must maintain a minimum of four percent in cash. Cash will be held in Schwab Bank, is FDIC-insured, and pays an indexed, market-based interest rate.

Sophisticated advisor-branded digital experience for advisor clients

Advisors will be able to add their own brand identity including their firm’s name, logo and contact information for use in an end-client web portal and mobile app. Advisors will have tools that help facilitate conversations with clients via co-browsing and the platform will be integrated with Schwab Alliance, the company’s website for advisor clients. Performance reporting will be available through the client web portal and mobile app. The platform also offers 24/7/365 customer service when advisors are unavailable.

Unmatched value, competitively priced to help firms grow and serve clients efficiently

The platform will have a two-tiered pricing structure based on total assets custodied with Schwab outside the Institutional Intelligent Portfolios program. For those 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 above and beyond Institutional Intelligent Portfolios AUM, there will be no fee. Advisors will determine their appropriate management fees, which will be billed through the standard Schwab custodial billing process. No account service fees, trading commissions or custody fees will be charged to advisors’ clients.

Streamlined, automated rebalancing, tax-loss harvesting and client onboarding

Institutional Intelligent Portfolios will provide a paperless account open and funding experience for advisors’ clients. Advisors will have robust client management tools, including automated rebalancing and the opportunity for tax-loss harvesting for accounts greater than $50,000. Institutional Intelligent Portfolios will work with advisors’ existing workflows and integrate with Schwab Advisor Center - a website that provides custody, trading, and support services for independent registered investment advisors who custody with Schwab. Account data will also be included in Schwab data downloads and can be imported into advisors’ portfolio management systems. Additionally, Schwab will provide advisors with a specialized service team to help with set up and ongoing support for their firm and their clients.

“Automated investment management is here to stay and our goal is to ensure that our advisors are prepared to participate in this potential growth opportunity on their terms in the most seamless way possible,” said Clark. “We have been working closely with advisor groups over the past year to shape our offer so that it meets RIA’s needs. Institutional Intelligent Portfolios is one of many innovations we’re investing in to support RIA firm growth. It is designed to help advisors continue to do what they do best – serve their clients.”

Advisors can go to institutionalintelligent.schwab.com/advisor to sign up for ongoing updates about the platform and its availability.

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

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.

Schwab affiliates earn revenue from the underlying assets in Institutional Intelligent Portfolios accounts. This revenue comes from managing Schwab ETFsTM 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.

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

Diversification and rebalancing strategies do not ensure a profit and do not protect against losses in declining markets.

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

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 are not owned by, affiliated with, or supervised by Schwab.

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

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

(0315-2431)

1 2014 RIA Benchmarking Study from Charles Schwab

2 Schwab Independent Advisor Outlook Study, June 2014

3 2014 RIA Benchmarking Study from Charles Schwab

Contact:

Charles Schwab
Susan Forman, 415-699-1654
susan.forman@schwab.com
or
The Neibart Group
Sarah Gormley, 718-875-2122
sas@neibartgroup.com

Multimedia Files:

Preview image
Institutional Intelligent Portfolios(TM) - automated investment management solution for independent registered investment advisors. For illustrative purposes only. (Photo: Business Wire)
Preview image

Corporate Public Relations
Contacts for Journalists Only

 

888-767-5432

Subscribe

Business Wire NewsHQ℠