As it moves to wrap up its purchase of ex-rival TD Ameritrade, Charles Schwab says it is now offering free digital financial plans to help investors move toward their retirement goals.
All clients can use the self-guided tool, Schwab Plan, which the firm argues makes it “the only large retail brokerage to offer complimentary financial planning to all clients.”
For both clients and all investors, Schwab also launched an online financial planning hub with goals-based calculators, related tools and educational resources, such as a mortgage calculator.
“It’s a brilliant move,” said Gavin Spitzner, head of Wealth Consulting Partners. “Schwab sees what Vanguard’s doing [by] pushing into the digital space much more with planning, and it’s trying to stay one step ahead. They are putting the hammer down and playing for keeps.”
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The latest Schwab effort comes less than a year after it introduced free-commission stock trades, “which helped them take out TD,” Spitzner explained.
These developments followed its rollout of “subscription pricing and brought down the fee on human advice, albeit delivered virtually, to $30 bucks a month including asset management,” the consultant said.
This program — Schwab Intelligent Portfolio Premium, which charges $300 for the initial financial planning work — ”doesn’t get enough attention,” he added.
“Now they’re giving away planning for free to every single client,” Spitzner said of Thursday’s news. “They are commoditizing planning.”
As for how Schwab’s RIA clients might react to the news, “There will be a divided response,” he explained. “Advisors who understand the real value they provide and are, say, more specialized in terms of the markets they serve by going much deeper [with their planning services], they’re fine.”