Wealthy stay healthy with Charles Schwab’s new hybrid advisor
Neesha Hathi, EVP with Schwab Investor Services
US-based Charles Schwab has launched its Schwab Intelligent Advisory, a hybrid advisory service that combines people and a robo-advisor.
Schwab Intelligent Advisory will provide investors with a financial plan, guidance from “certified financial planner professionals”, and a fully automated portfolio using algorithm driven technology. The service is expected to launch in the first half of 2017.
The new service could potentially compete with Schwab’s Institutional Intelligent Portfolios, as the latter is a digital advice platform that the firm sells to advisers to use with clients.
Neesha Hathi, executive vice-president with Schwab Investor Services, says its approach “mirrors what today’s consumers have come to expect in other aspects of their lives”.
The service is designed for an “emerging or mass affluent” investor and will have a $25,000 investment minimum.
Based on their financial plan, the firm says 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.
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 $5,000. Clients can activate automated tax loss harvesting for each account starting at $50,000.
