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Portfolio > Portfolio Construction

Schwab Model Portfolios Now on Envestnet Platform

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RIAs using Envestnet’s Fund Strategist Network now have access to a series of model portfolios created by Charles Schwab upon request.

The new Schwab Model Portfolios include seven risk-based allocations that include “a behavioral overlay … with the aim of helping advisors’ clients stay invested across market cycles and conditions,” according to the brokerage firm’s investment management unit, which announced the development early Tuesday. 

After requesting access to them on the Envestnet platform, advisors can choose between portfolios that use market-cap-weighted exposures to equity, fixed income and real assets “for a diversified, low-cost core portfolio” or an approach that includes “strategic beta, value, growth, and other sub-asset class allocation exposures,” Schwab explained in a statement.

The average weighted expense for the model portfolios is between 0.04% to 0.12%. The minimum investment is $25,000, and Envestnet’s platform access fees also apply.

“These investment solutions can free up advisors’ time to focus even more on wealth management and client relationships, which is especially important in the current environment,” Jake Gilliam, head of Multi-Asset Solutions of Schwab’s Investment Management business, in a statement.

Over the 18 months, advisors’ response to the design and aim of Schwab’s portfolios “has been very positive,” Gilliam added. “Many also requested a platform-based solution to help them implement it, which led us to offer this new model portfolio structure.” 

Model portfolios are “one of the fastest growing areas on our platform,” said Jean Heath, managing director and head of Asset Manager Network at Envestnet, in a statement shared with ThinkAdvisor.

“More advisors are leveraging models to focus on growing their business, and leveraging models can increase efficiency as well as the value of their practices,” Heath explained. “We’re glad that Schwab has joined our growing roster of fund strategists available for advisors to utilize in their client’s portfolios.”

More Envestnet News

Envestnet says it serves some 103,000 advisors with 4,900 firms, including 46 of the 50 largest wealth management and brokerage firms and 500 of the largest RIAs. 

Also on Tuesday, the wealth platform provider said Bancorp Bank is now part of the Envestnet Credit Exchange, which advisors can use for securities-backed lines of credit.  

“We continue to add select, highly qualified lenders to the Envestnet Credit Exchange to enrich the suite of credit solutions that enable advisors to help clients manage both sides of the balance sheet,” said John Yackel, Head of Strategic Initiatives at Envestnet. 

Envestnet launched its credit exchange, which relies on the Advisor Credit Exchange network, last year. It can be used to generate pre-qualified loan options for advisors’ investor clients.

Schwab-Envestnet Relationship

The two firms work as both partners and competitors in the RIA space.

Earlier this month Envestnet CEO Bill Crager said the technology and turnkey asset management platform provider is working to offer investors the ability to buy and sell fractional stock shares.

This development came about three months after Schwab — which set to complete its $26 billion merger with TD Ameritrade by year-end — announced that it would soon let retail investor clients buy partial shares of S&P companies’ stock. Schwab Stock Slices became available in June for as little as $5 each.

In late July, Envestnet introduced an RIA Planning Analytics tool for its Envestnet | MoneyGuide financial planning software, which it acquired from Schwab in 2019 as part of its PIETech purchase.

Also last month, the platform provider hired Dani Fava away from TD Ameritrade Institutional to lead its strategic development efforts. 

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