Schwab’s new subscription-based digital advisory service is a big hit, attracting $1 billion in new assets under management since it was introduced a little over three months ago.
Schwab Intelligent Portfolios Premium, introduced March 28, has also seen a 25% increase in account openings, a 40% increase in average household assets enrolled and a 37% rise in new-to-Schwab household enrollments.
“It’s clear from these early results that we’ve struck a chord,” said Cynthia Loh, Charles Schwab vice president of digital advice and innovation, in a statement. “Today’s consumers expect simplicity, transparency and value — and how they invest should be no different.” She noted that Schwab created the new service as a direct result of client feedback about its pricing approach.
Schwab Intelligent Portfolios Premium charges a flat $30 monthly fee, billed quarterly, after a one-time $300 fee for unlimited one-to-one guidance from a certified financial planner, though not necessarily the same advisor at different times, and a comprehensive financial plan that provides a customized roadmap for investors to reach their financial goals.
It is essentially a new pricing model for what was previously known as Schwab Intelligent Advisory, which charged a 0.28% advisory fee. The service requires a $25,000 minimum, and provides access to a mixed of over 50 ETFs from Schwab and other asset managers plus access to an FDIC-insured deposit at Schwab Bank.
This pricing regime “lowers the barrier for many consumers that would benefit from financial planning by making it very easy to understand from a service and pricing perspective,” said Alois Pirker, research director for Aite Group’s Wealth Management practice, in a statement. “Consumers are expecting to tailor services to their needs and pay based on consumption. Schwab is at the forefront of this change.”