Charles Schwab (SCHW) announced earlier this week that they will launch a new automated investment advisory service. Schwab Intelligent Portfolios will be made available to retail investors in the first quarter of 2015. A white label version of this service for Registered Investment Advisors will be available shortly thereafter. One of the bigger surprises from the announcement was the minimum to use this service is only going to be $5,000. Investors will be able to individual, joint, IRA, and revocable living trust accounts that will offer technology-driven automated portfolios. Note, when you see the words “intelligent” or technology-driven, those are basically code words for Robo-advisor. Schwab becomes the first major online broker to dive into the fast growing Robo-advisor space.
Some other important facts and features surrounding the Schwab Intelligent Portfolios program
-Automated tax loss harvesting available at no cost for portfolios starting at $50,000
-Technology driven daily portfolio monitoring and automatic rebalancing
-Ability to automatically fund accounts on a recurring basis
-Diversified portfolios using Schwab and third party low-cost ETFs as underlying securities
Walt Bettinger, CEO of Schwab, noted, “Schwab Intelligent Portfolios addresses a growing demand for affordable, objective, sophisticated and convenient investment advice.” Bettinger went on to say that this is a move that shows Schwab is committed to serving a very broad spectrum of investors.
While Schwab didn’t directly call it this in their press release, this is clearly a Robo-Advisor service. The main draw of investing with a robo-advisor is cost savings, and it appears Schwab has decided the movement toward that service was something they could no longer ignore. ” Blain put up a terrific post a few months ago at Stocktradingtogo which describes what robo-advisory is all about.
For more information on Schwab’s Planned Launch of the Schwab Intelligent Portfolio click here.