Charles Schwab Launches Schwab Intelligent Portfolios(TM)

Charles Schwab today launched a fully automated investment advisory service, Schwab Intelligent Portfolios™, the only investment advisory service using sophisticated computer algorithms to build, monitor, and rebalance diversified portfolios based on an investor’s stated goals, time horizon and risk tolerance – without charging any advisory fees, commissions or account services fees.

Naureen Hassan, executive vice president and head of the team responsible for Schwab Intelligent Portfolios. (Photo: Business Wire)

Schwab Intelligent Portfolios applies the insights of Charles Schwab Investment Advisory (CSIA) experts to algorithms to build and manage client portfolios of low-cost Exchange Traded Funds (ETFs) with up to 20 asset classes, as well as an FDIC-insured cash allocation to manage volatility and risk. Investors with as little as $5,000 will receive a portfolio recommendation after answering a short set of questions that quickly assess their goals and risk tolerance, and the portfolio is automatically rebalanced as market dynamics change.

“We know there are three controllable variables that have an impact on the long-term success of investors – being and staying invested; having access to quality investment advice and money management; and keeping costs low,” said Schwab executive vice president Naureen Hassan, who leads the team responsible for Schwab Intelligent Portfolios.

“Schwab Intelligent Portfolios addresses each of these key components of success,” Hassan continued. “It’s easy for investors to get started and stay invested. It keeps investors’ portfolios on track as markets change without requiring any action on their part and uses advanced technology to create and manage portfolios based on the same sophisticated, time-tested approaches to portfolio management used by institutional investors. It keeps costs down to a new low, while providing access to Schwab investment professionals 24/7/365.”

She noted that fewer than 30 percent of Americans have consulted a financial professional about savings or investments within the past five years, according to a report by FINRA’s Investor Education Foundation. “Investors are far more likely to succeed if they are getting help, and Schwab Intelligent Portfolios is an easy-to-use, low cost, and high-quality offering designed to get advice and money management to more people, whether they have $5,000 or $500,000,” she said.

#sayhello at Intelligent.Schwab.com

Schwab Intelligent Portfolios will draw from 54 different ETFs and 27 asset classes to provide investors with personal portfolios featuring:

• Low-cost 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
• Up to 20 globally diversified asset classes including equities, fixed income, real estate, and commodities across U.S., international and emerging markets
• Automatic portfolio monitoring and rebalancing to keep portfolios aligned to clients’ chosen investment strategies
• Automated tax loss harvesting available at no cost for portfolios starting at $50,000
• A combination of fundamentally weighted and market cap-weighted ETFs
• Access from any desktop or mobile device
• The ability to automatically fund accounts on a recurring basis
• The ability to fund accounts using mobile check deposit
• Fully paperless account open and account management
• Live help from Schwab investment professionals 24/7/365
• No commissions, advisory fees or account service fees charged

Hassan said that a version for independent registered investment advisors (RIAs) who custody their client assets with Schwab will be available in Q2. The advisor solution, Institutional Intelligent Portfolios™, will allow RIA firms to modify asset allocations and customize portfolios from a pool of eligible ETFs. Advisor pricing options will be available including a version with no program management fee, and advisors will be able to incorporate their firms’ branding. “There’s a lot of interest among advisors for automated investment management solutions,” said Hassan. “Institutional Intelligent Portfolios will enable RIA firms to manage client assets efficiently, serve new and existing clients, and help them grow their businesses in a scalable way.”

In conjunction with the Schwab Intelligent Portfolios launch, tomorrow Charles Schwab will begin running a new national advertising campaign including online, print and television advertisements discussing the service and featuring “Blue,” the personality behind the algorithm that builds and manages the portfolios.

Additional details about Schwab Intelligent Portfolios and easy sign-up are available at intelligent.schwab.com.

Schwab Intelligent Portfolios media materials including screenshot graphics are available here.

To keep in touch with Schwab Intelligent Portfolios’ algorithm, follow @SchwabBlue.

About Schwab

At Charles Schwab we believe in the power of investing to help individuals create a better future. 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, 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 Intelligent Portfolios charges no advisory fee. Schwab affiliates do earn revenue from the underlying assets in Schwab Intelligent Portfolios accounts. This revenue comes from managing Schwab ETFs^TM 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 Schwab Intelligent Portfolios account. Clients must enroll to receive this service.

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

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

Diversification, automatic investing and rebalancing strategies do not ensure a profit and do not protect against losses in declining market

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

Please read the Schwab Intelligent Portfolios'^TM disclosure brochures for important information, pricing, and disclosures relating to Schwab Intelligent Portfolios

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

Schwab Intelligent Portfolios^TM and Institutional Intelligent Portfolios^TM are made available through Schwab Wealth Investment Advisory, Inc. ("SWIA"), a registered investment advisor. Portfolio management services are provided by Charles Schwab Investment Advisory, Inc. ("CSIA"). SWIA and CSIA are affiliates of Charles Schwab & Co., Inc. ("Schwab") and 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.

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