Schwab’s Subscription-Based Financial Planning Service Delivers Strong Early Results

Schwab Intelligent Portfolios Premium™ Brings in $1 Billion in Assets Since March Debut

Thursday, July 11, 2019 7:00 am PDT

Dateline:

SAN FRANCISCO

Public Company Information:

NYSE:
SCHW
"Today’s consumers expect simplicity, transparency and value – and how they invest should be no different."

SAN FRANCISCO--(BUSINESS WIRE)--Since introducing new subscription-based pricing at the end of March, Schwab Intelligent Portfolios Premium has added $1 billion in new assets under management, reinforcing the significance of Schwab’s move to a more modern way to deliver financial planning. In addition to strong asset growth, the service has seen a 25 percent increase in account opens, a 40 percent increase in average household assets enrolled, and a 37 percent rise in new-to-Schwab household enrollments.*

Overall client assets managed by Schwab’s digital advisory solutions total $41 billion, up 23% year-over-year.*

Schwab Intelligent Portfolios Premium offers unlimited 1:1 guidance from a CERTIFIED FINANCIAL PLANNER™ professional who can provide personalized financial advice based on current goals and circumstances, a comprehensive and customized financial plan, access to the financial plan 24/7 via a comprehensive digital planning experience, and a diversified portfolio of low-cost exchange-traded funds (ETFs) that automatically rebalances over time.

“The move to subscription-based financial planning came as a direct result of client feedback about the appeal of this pricing approach, and it’s clear from these early results that we’ve struck a chord,” said Cynthia Loh, Charles Schwab vice president of digital advice and innovation. “Today’s consumers expect simplicity, transparency and value – and how they invest should be no different.”

Schwab Intelligent Portfolios Premium is designed for people who want a combination of automated portfolio management and comprehensive guidance and financial planning. Clients using the service represent a wide range of ages and asset levels, and their planning conversations can include a mix of financial goals from retirement and college savings to shorter-term topics like travel, purchasing a home, and funding home improvements.

“The wealth management industry is changing rapidly – consumers are expecting to tailor services to their needs and pay based on consumption,” according to Alois Pirker, research director for Aite Group's Wealth Management practice. “Schwab is at the forefront of this change. The subscription-based pricing they introduced in their digital advisory service lowers the barrier for many consumers that would benefit from financial planning by making it very easy to understand from a service and pricing perspective.”

“We’ve seen many new clients sign up who knew they needed help with financial planning but hadn’t found an advisory model that fit them – either because they prefer a more digital approach, are cost-conscious, or find traditional planning services overly complex,” noted Loh. “These investors were managing their investments on their own but not necessarily by choice, so we’re excited to give them a new way to get the help they need.”

In March, pricing for Schwab Intelligent Portfolios Premium was changed from an asset-based advisory fee to an initial one-time $300 fee for planning, and a $30 monthly subscription (advisory) fee ($90 billed quarterly) that does not change at higher asset levels.

Just as if they'd invested on their own, clients pay the operating expenses on the ETFs in the portfolios — which includes Schwab ETFs™. Schwab believes cash is a key component of an investment portfolio. Based on a client’s risk profile, a portion of their portfolio is placed in an FDIC-insured deposit at Schwab Bank. Some cash alternatives outside of the program pay a higher yield. See additional cost information below.

More information about Schwab’s digital advisory services is available here.

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.

*Schwab data as of June 30, 2019

Disclosures

Please read the Schwab Intelligent Portfolios Solutions™ disclosure brochures for important information, pricing, and disclosures related to the Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium programs.

Schwab Intelligent Portfolios® and Schwab Intelligent Portfolios Premium™ are made available through Charles Schwab & Co. Inc. (“Schwab”), a dually registered investment advisor and broker dealer. Portfolio management services are provided by Charles Schwab Investment Advisory, Inc. ("CSIA"). Schwab and CSIA are subsidiaries of The Charles Schwab Corporation.

Additional Cost Information

There is no advisory fee or commissions charged for Schwab Intelligent Portfolios. For Schwab Intelligent Portfolios Premium, there is an initial planning fee of $300 upon enrollment and a $30 per month advisory fee charged on a quarterly basis as detailed in the Schwab Intelligent Portfolios Solutions™ disclosure brochures. Investors in Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium (collectively, “Schwab Intelligent Portfolios Solutions”) do pay direct and indirect costs. These include ETF operating expenses which are the management and other fees the underlying ETFs charge all shareholders. The portfolios include a cash allocation to a deposit account at Schwab Bank. Our affiliated bank earns income on the deposits, and earns more the larger the cash allocation is. The lower the interest rate Schwab Bank pays on the cash, the lower the yield. Some cash alternatives outside of Schwab Intelligent Portfolios Solutions pay a higher yield. Deposits held at Schwab Bank are protected by FDIC insurance up to allowable limits per depositor, per account ownership category. Schwab Intelligent Portfolios Solutions invests in Schwab ETFs. A Schwab affiliate, Charles Schwab Investment Management, receives management fees on those ETFs. Schwab Intelligent Portfolios Solutions also invests in third party ETFs. Schwab receives compensation from some of those ETFs for providing shareholder services, and also from market centers where ETF trade orders are routed for execution. Fees and expenses will lower performance, and investors should consider all program requirements and costs before investing. Expenses and their impact on performance, conflicts of interest, and compensation that Schwab and its affiliates receive are detailed in the Schwab Intelligent Portfolios Solutions disclosure brochures.

The cash allocation in Schwab Intelligent Portfolios Solutions™ will be accomplished through enrollment in the Schwab Intelligent Portfolios Sweep Program (Sweep Program), a program sponsored by Charles Schwab & Co., Inc. By enrolling in Schwab Intelligent Portfolios Solutions, clients consent to having the free credit balances in their Schwab Intelligent Portfolios Solutions brokerage accounts swept to deposit accounts at Charles Schwab Bank through the Sweep Program. Charles Schwab Bank is a FDIC‐insured depository institution affiliated with Charles Schwab & Co., Inc. and Charles Schwab Investment Advisory, Inc.

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. Edelman Intelligence is not affiliated with the Charles Schwab Corporation or its affiliates. More information is available at www.schwab.com and www.aboutschwab.com.

Investment Products: Not FDIC Insured • No Bank Guarantee • May Lose Value.

© 2019 Charles Schwab & Co., Inc., All rights reserved. Member SIPC.

(0719-91EK)

Contact:

Marianne Ahlmann
Charles Schwab
415-667-1115
Marianne.ahlmann@schwab.com

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