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Schwab Introduces Subscription-Based Financial Planning Option in Its Digital Advisory Service

SAN FRANCISCO--(BUSINESS WIRE)--

New pricing model delivers a modern approach to planning

To simplify its approach to comprehensive professional guidance and financial planning for the firm’s digital advisory services, Charles Schwab is moving to a new subscription pricing model for Schwab Intelligent Advisory™ and renaming the service Schwab Intelligent Portfolios Premium™. There are no pricing changes to Schwab Intelligent Portfolios®, the firm’s automated investing service, which charges no advisory fee.

Schwab Intelligent Portfolios builds, monitors, and automatically rebalances a diversified portfolio of low-cost exchange-traded funds (ETFs) based on a client’s goals and provides 24/7 help from Schwab service professionals. This service is designed as a fully digital end-to-end experience, but clients also have access to professionals who can help with a range of topics including client goals, risk tolerance, and portfolio allocation.

Schwab Intelligent Portfolios Premium builds on Schwab Intelligent Portfolios to offer:

  • Unlimited 1:1 guidance from a CERTIFIED FINANCIAL PLANNER™ professional who can provide personalized financial advice based on current goals and provide ongoing advice as goals and circumstances change
  • A comprehensive financial plan that provides a customized roadmap for reaching financial goals
  • Ability to access the financial plan 24/7 via a comprehensive digital planning experience, including the ability to modify assumptions in real time to see how changing needs and circumstances could impact a client’s overall financial picture and help them stay on track

Introducing Subscription-Based Financial Planning

The 0.28% advisory fee clients previously paid for Schwab Intelligent Advisory, now called Schwab Intelligent Portfolios Premium, has been replaced with an initial one-time $300 fee for planning, and a $30 monthly subscription ($90 billed quarterly) that does not change at higher asset levels.

“Cost and complexity are two of the biggest roadblocks to accessing financial planning, and our goal is to break down those barriers,” said Cynthia Loh, Charles Schwab vice president of digital advice and innovation. “These changes are a result of client feedback and our commitment to meet consumer expectations for simplicity, transparency and value.”

“Subscription-based pricing is second nature to many of us who pay this way for other forms of ongoing access and guidance – from streaming media services to fitness and personal training memberships. We think people should have the opportunity to pay for financial planning the same way,” added Loh. “This new pricing approach is part of our focus on making the investing and planning experience easier, more modern, and more approachable. We’re looking forward to helping people get the financial help they need, whether they’re investing for the long term or have more immediate life events that require a plan.”

 

How Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium Compare

      Schwab Intelligent Portfolios    

Schwab Intelligent Portfolios
Premium

Investment minimum     $5,000     $25,000
Fees     No advisory fee charged    

One-time $300 initial
planning fee and $30/month
for unlimited guidance

Diversified portfolio of low-cost
exchange-traded funds (ETFs)

    Yes     Yes

Daily monitoring and automatic
rebalancing as needed

    Yes     Yes
Tax-loss harvesting*     Yes     Yes
24/7 support from professionals     Yes     Yes

Unlimited 1:1 guidance from a
CERTIFIED FINANCIAL PLANNER™
professional

    No     Yes
Comprehensive financial plan     No     Yes
Interactive online planning tools     No     Yes
       

Just as if they had invested on their own, clients in Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium pay the operating expenses on the ETFs in the portfolio, which includes a combination of Schwab ETFs™ and funds from third party providers. Based on a client’s risk profile, a portion of the 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.

Clients do not pay commissions in Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium. 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.

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.

*Tax‐loss harvesting is available for clients with invested assets of $50,000 or more in their account. Clients must choose to activate this feature.

Through its operating subsidiaries, The Charles Schwab Corporation (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. (0319-9T04)

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