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By 
March 28, 2019 at 02:08 PM
Charles Schwab is following in the footsteps of Apple, Amazon and Netflix, rolling out a subscription model for some of its services.
Schwab Intelligent Advisory will be renamed Schwab Intelligent Portfolios Premium and will cost $30 a month rather than 0.28% of assets each year; it includes “unlimited” support from a certified financial planner, a $25,000 investment minimum and a $300 initial planning fee.
Financial advisors and tech bloggers, like Michael Kitces and Bill Winterberg, were quick to comment on the importance of the development. “Wow, HUGE news,” Kitces said on Twitter.
“The growth of financial planning is about to accelerate, quickly!” he added. Though the premium service includes unlimited access to a CFP professional, it “ostensibly is still investment-centric,” he continued in another tweet.
Investors using rival Vanguard’s Personal Advisor Services (launched in 2015) are charged 0.30% per year and have a $50,000 minimum — which means an annual charge of $150, less than half of the $360 yearly fee for Schwab’s new service. At a higher asset level of, say, $150,000, the Vanguard PAS fee jumps to $450 a year — above Schwab’s new premium service.
“Wow, former @betterment exec Cynthia Loh leads pricing overhaul at @CharlesSchwab Intelligent Advisory to cut AUM-based fees and transition to $30/month subscription!” said CFP Bill Winterberg on Twitter.
“For $30/month, I can get a Tier 3 subscription to my favorite @Twitch streamer, -OR- I can get ongoing access to CERTIFIED FINANCIAL PLANNER™ professionals and automated investment management services,” Winterberg quipped.
According to Loh, Schwab’s vice president of digital advice and innovation, subscription-based pricing is “second nature to many of us … 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.”
