Products

Schwab Expands Hybrid Advisory Service

The package provides access to human advisers as well as an automated managed account built with ETFs from Schwab and other providers.

By Javier Simon editors@assetinternational.com | March 15, 2017

Charles Schwab announced it has expanded access to its Schwab Intelligent Advisory, which offers access to human professionals as well as a fully automated diversified portfolio to help investors meet their financial needs.

The solution is designed to construct a financial plan tailored to individual investors based on their situation and goals. They will also receive ongoing guidance from certified financial planners (CFP). The service requires a $25,000 minimum and an annual advisory fee of 0.28% of assets, with a quarterly maximum of $900.

“Planning is critical to successful investing, but not enough people have a financial plan,” says Neesha Hathi, executive vice president with Schwab Investor Services. “For some, the roadblock might be high costs and minimums; for others, planning may seem like a dull and daunting task. Schwab Intelligent Advisory democratizes and modernizes the process by making it easier and more affordable to build and maintain a plan, stay invested, and access professional guidance along the way.”

A December 2016 survey of about 1,000 Schwab clients revealed that a majority said they prefer an investing platform that combines technology and a relationship with a financial professional instead of solely relying on either one. Seventy-one percent said cost is “extremely” or “very” important when it comes to getting financial advice.

Schwab Intelligent Advisory, which initially was announced in December 2016, aims to devise a broad financial plan that begins with a self-guided online planning tool, followed by a conversation with a Planning Consultant. These advisers offer ongoing guidance via phone or videoconference.

The automated portfolios are comprised of exchange traded funds (ETF) from Schwab and other providers including Vanguard, iShares and PowerShares. It utilizes Schwab Intelligent Portfolios asset allocations. Clients can view their plans and track goals as well as portfolio performance through a single dashboard accessible from a desktop or mobile devise. The service offers paperless account opening and account management. Clients can establish automated account funding on a recurring basis, as well as fund accounts using mobile check deposit.

The firm says “Schwab Intelligent Advisory is designed for an investor who is focused on keeping costs low, has multiple goals but doesn’t have a highly complex financial situation, and understands the importance of developing a personalized plan.”

Schwab will continue to offer its automated investing service Schwab Intelligent Portfolios, offered through Schwab Wealth Investment Advisory, as a separate service for investors who already have a financial plan in place or have straightforward goals and want purely software-driven, automated, discretionary portfolio management without an advisory fee charged.

More information about Schwab Intelligent Advisory is available at Schwab.com.