Schwab Announces Schwab Intelligent Advisory™
New hybrid advisory service joins people and technology to give investors an easier and more affordable way to
create and implement financial plans
Charles Schwab today announced plans to expand its suite of wealth management and advisory services with the launch of Schwab
Intelligent Advisory, a hybrid advisory service that combines live credentialed professionals and algorithm driven technology to
make financial and investment planning more accessible to consumers. Schwab Intelligent Advisory will provide investors with a
financial plan tailored to their situation and goals, ongoing guidance and expertise from Planning Consultants who are all
CERTIFIED FINANCIAL PLANNER™ professionals, and a fully automated and diversified portfolio − all at a very low cost. The service
is expected to launch in the first half of 2017.
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Neesha Hathi, executive vice president, Investor Services Strategy, Segments and Platforms at Schwab (Photo:
Business Wire)
“Schwab Intelligent Advisory fully leverages what technology and people can deliver in tandem, focusing on serving clients based
on their unique needs while delivering the kind of value they know they can expect from Schwab,” said Neesha Hathi, executive vice president with Schwab Investor Services. “This is a modern approach to financial
planning and wealth management that mirrors what today’s consumers have come to expect in other aspects of their lives; how they
invest should be no exception.”
According to Hathi, Schwab Intelligent Advisory is designed for an emerging or mass affluent investor focused on keeping costs
low who doesn’t have a highly complex financial situation, but does have multiple goals and understands the importance of
developing a personalized plan. The service will also appeal to those who enjoy leveraging technology to get things done, want to
be in control of their finances, and appreciate having the ability to engage with a salaried financial professional when
needed.
Schwab Intelligent Advisory, which will have a $25,000 investment minimum, includes:
- A comprehensive financial and investment plan. Clients will complete a self-guided online
planning tool focused on their specific financial situation and goals including both Schwab and non-Schwab accounts, followed by
a 1-1 conversation with a credentialed Planning Consultant to review the plan, prioritize goals, and discuss investment
choices.
- Ongoing guidance from Planning Consultants. Schwab Intelligent Advisory clients will have
access via phone or videoconference to a team of Planning Consultants – all of whom are CERTIFIED FINANCIAL PLANNER™
professionals. In addition to working with clients on their initial financial plan and investment choices, Planning Consultants
can provide guidance on a range of wealth management topics including overall goals and saving targets, retirement planning,
college savings, long-term care planning, and budgeting. Regular check-ins can be scheduled online and will typically occur
annually, but clients can engage with Planning Consultants as needed, and they also have access to live service support via
phone, chat, and email − 24 hours a day, seven days a week.
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Fully automated, diversified portfolios. Based on their financial plan, clients will be invested in a fully-automated,
diversified portfolio using Schwab Intelligent Portfolios. The portfolios are comprised of low-cost exchange-traded funds (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. Investors will have access to up 20 globally
diversified asset classes in each portfolio including equities, fixed income, real estate, commodities, and an FDIC-insured
cash allocation to manage volatility and risk. The portfolios also use a combination of fundamentally weighted and market
cap-weighted ETFs, giving investors an additional layer of diversification.
Schwab Intelligent Advisory clients will be able to open accounts for multiple goals – all based on their financial plan. While
the minimum to enroll in Schwab Intelligent Advisory is $25,000, clients will be able to open additional individual accounts in
the service for as little as $5,000. Clients can activate automated tax loss harvesting for each account starting at $50,000.
- A customized dashboard. Once the plan is in place and investments funded, clients will access
a customized digital dashboard to view their plan, their progress toward goals, and portfolio performance – from both a desktop
and mobile device.
- Low cost. Advisory fees under Schwab Intelligent Advisory are 0.28% of a client’s managed
assets with a $900 quarterly fee maximum, making it one of the lowest cost advisory solutions available to investors today. The
service will charge no trading commissions or account service fees, and the ETFs included are based on the lowest fees in the ETF
industry once they meet size, spread and tracking consistency criteria. The weighted average operating expense ratio for the
portfolios currently range from 0.08% for a conservative portfolio, 0.19% for a moderate portfolio, and 0.24% for an aggressive
portfolio.
In addition, Schwab Intelligent Advisory will offer a completely paperless account opening and account management experience,
and clients will be able to establish automated account funding on a reoccurring basis, as well as fund accounts using mobile check
deposit.
“There’s an entire population of self-directed investors who aren’t self-directed by choice – they simply haven’t found an
advisory model that works for them yet,” said Hathi. “The barrier might be lack of trust and transparency, cost, complexity or
general inertia, but there’s a real need to make financial planning and advice more accessible. Schwab Intelligent Advisory
democratizes the process by making it easier and more affordable to build and maintain a plan, stay invested, and access
professional guidance along the way.”
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
Diversification strategies do not ensure a profit and do not protect against losses in declining markets. Deposit Balances held
in the Sweep Program at Schwab Bank are eligible for FDIC insurance up to allowable limits.
Schwab Intelligent Advisory charges no commissions or account service fees. Schwab affiliates do earn revenue from the
underlying assets in Schwab 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.
Please read the Schwab Intelligent Advisory™ disclosure brochures for important information about this program.
Schwab Intelligent Advisory™ is made available through Charles Schwab & Co., Inc. (“Schwab”), a dually registered investment
adviser and broker-dealer. Portfolio management services for Schwab Intelligent Portfolios™ are provided by Charles Schwab
Investment Advisory, Inc. ("CSIA"), a registered investment adviser, and offered through Schwab Wealth Investment Advisory, Inc.
(“SWIA”). Please refer to the disclosure brochures for details about Schwab Intelligent Advisory. Free credit balances are swept
into deposit accounts at Charles Schwab Bank (“Schwab Bank”). Brokerage products and accounts are offered by Schwab, Member SIPC.
Deposit and lending products are offered by Schwab Bank, Member FDIC and an Equal Housing Lender.
Schwab, CSIA, SWIA and Schwab Bank are affiliates and are 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.
Brokerage Products: Not FDIC Insured • No Bank Guarantee • May Lose Value
(1216-RMB3)
Charles Schwab
Michael Cianfrocca, 415-667-0344
michael.cianfrocca@schwab.com
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