– Schwab Intelligent –
If are you looking for fee-free Intelligent Portfolios that are competent and offer a wide range of its own ETFs, Charles Schwab is your option. The service also offers tax-loss harvesting, which is a big plus.
Schwab Intelligent Portfolios was established by the Charles Schwab Corporation, a firm that has an impressive $3.25 Trillion worth of Assets Under Management (AUM) and has been around since 1971.
What Is Schwab Intelligent Portfolios?
Similar to other popular Robo advisors, Schwab Intelligent Portfolios is a professionally managed, fully automated investment portfolio. Your portfolio will be allocated based on your risk profile, ranging from conservative to moderate, to aggressive.
The portfolio will be rebalanced daily as necessary. Tax-loss harvesting is available on accounts with a minimum balance of $50,000.
Also take advantage of all the investment options that are available at Schwab Intelligent Portfolios.
Even more, the company is a full-service discount brokerage firm and one of the largest in the world. It has almost $3 trillion in client assets under management.
It also offers a virtually unlimited selection of investments, including exchange-traded funds (ETFs), mutual funds, bonds and other fixed-income investments. They also include options, real estate investment trusts (REITs) and commodity-based investments.
Stocks and options can be traded at just $4.95 per trade. This is one of the lowest commissions in the industry.
It’s possible to have Schwab Intelligent Portfolios managed for you while also maintaining a self-directed portfolio with the same broker.
Pros and Cons of Schwab Intelligent Portfolios
- No management fees
- The platform includes a very easy-to-use website and app
- A standard account holder can switch to the premium level once the account minimum has been attained
- Schwab’s education offerings and library of resources are available to Intelligent Portfolio clients
- The portfolio is not revealed until the account is funded, and it is not customizable
- The platform requires higher-than-average cash balances
- Portfolio contents focus on Schwab-managed ETFs, which generate fees for Schwab
- Little goal-planning help available
How Schwab Intelligent Portfolios works
Schwab Intelligent Portfolios lets investors put their money to work in a portfolio of exchange-traded funds, or ETFs.
However, these allow for diversified exposure to stocks, bonds, and other asset classes, and with a bare minimum of expense. Schwab uses just over 50 different ETFs in its automated portfolios, many of which are Schwab’s own funds.
Basically, investors complete a short questionnaire that helps Schwab determine their risk tolerance and investment objectives. After that, robo-advisor does the rest.
Charles Schwab Intelligent Portfolios Features
|Tax Loss Harvesting||
Monthly, Bimonthly, and Quarterly
|Customer Service||Phone: 24/7; Live Chat: 24/7; Email|
One of the biggest advantages of Schwab Intelligent Portfolios is being part of the Charles Schwab family. As one of the largest investment brokerages, Schwab also offers everything you need to invest.
However, customer service is among the best in the industry. And it provides you with full access to investment professionals, round the clock. The platform also has a wealth of educational resources and investment tools.
Schwab Intelligent Portfolios Fees
Investment management fees come from two distinct sources:
- The individual investment fund management fee or ETF expense ratio. Every exchange-traded or mutual fund charges a management fee. This money goes directly to the fund manager. The fund management expense ratios range from .06% to .65% of AUM. While the average total portfolio expense ratio is roughly .13% of AUM.
- Portfolio management fees are charged by Schwab, to manage your Schwab Robo-advisor.
However, as earlier said the basic Schwab Robo-advisor does not charge account management fees. The only charges you will pay are those management expense fees levied by the fund companies.
However, the Schwab Intelligent Portfolios Premium fees are levied with a subscription model. This is better and less expensive, the larger your portfolio.
The Schwab Portfolios Premium fees are:
- $300 one-time setup fee
- $30 per month management fee
Your investment management fees vary based on the size of your portfolio.
|Account Balance||$360 per Year Fee as a Percent of Total Assets (charged $30/month)|
If your assets are below $50,000, the fee is high relative to Betterment and Ellevest, which charge .40% or .50% respectively. This is for their premium services with financial advisor access.
Once your assets reach $100, the Schwab Robo-advisor subscription charge is very economical. This is when compared with both typical financial advisors and other Robo-advisors.
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How Does Schwab Intelligent Investing Make Money?
Schwab’s Intelligent Portfolio Premium subscription fee predominantly goes to fund their cadre of salaried Certified Financial Planners®.
Both robo-advisors also make money from two additional sources:
- Schwab earns revenue from a small management fee for the Schwab ETFs and revenue on some 3rd party ETFs.
- The cash portion of your account is held in the Schwab bank. Thus they profit from the access to your money, such as for lending and more.
Alternatives to Consider
There’s no one perfect robo-advisor for everyone, and there are alternatives that could better suit certain investors. However, here’s an alternative to Schwab Portfolios that offers some benefits and features you won’t find in Schwab’s platform.
However, check out our list of the best robo-advisors homepage to compare Schwab Intelligent Portfolios with even more alternatives.
|Feature||Schwab Intelligent Portfolios||SoFi Automated Investing|
|Access to Financial Advisors||No||Yes|
Is Schwab Intelligent Portfolios Right for You?
The free all-digital advisory service offered using the standard plan is a solid offering for those that are cost-conscious.
Also, if you’re already a Schwab client, getting started is extremely simple. Essentially Schwab is offering a portfolio that you can invest in and forget about for most of the year.
They will take care of the reallocation, the tax maneuvering, and everything else. Of course, they also set the portfolio for you, and your influence is limited to the survey.
With diverse portfolios and progress tracking tools, Schwab Intelligent Portfolios offers many services at low fees. You’re able to have some control over your investment portfolio as well as track your long-term goals.
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