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December 13, 2016 at 10:25 AM
Schwab is joining the growing number of firms offering a hybrid advisor/robo service for investors. The financial behemoth, which already has a robo-advisor service known as Schwab Intelligent Portfolios, announced on Tuesday plans to launch Schwab Intelligent Advisory, which combines the service of a “live credentialed professional and logarithm-driven technology.”
The announcement aligns with a pledge made by Schwab Advisor Services head Bernie Clark at the firm’s annual meeting with advisors in October: to continue to evolve. “If you’re growing, we’ll be here for you,” Clark told advisors.
The new hybrid robo service is expected to launch in the first half of 2017, joining other hybrid offerings from Vanguard, Merrill Lynch and Morgan Stanley.
According to Neesha Hathi, executive vice president with Schwab Investor Services, Schwab Intelligent Advisory is designed for “the emerging or mass affluent investor” who wants a low-cost personalized plan that achieves multiple financial goals.
“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. “There’s a real need to make financial planning and advice more accessible.”
The new service will make it easier for investors “to build and maintain a plan, stay invested and access professional guidance along the way,” said Hathi.
The minimum investment is $25,000, advisory fees are 0.28% of a client’s managed assets, topping out at a $900 quarterly maximum, and expense ratios range from 0.08% for a conservative portfolio to 0.24% for an aggressive one (a moderate portfolio has 0.19% fees).
