Schwab Wealth Management Review
Charles Schwab goes beyond self-directed trading or investing. This full-service financial firm maintains a wide-reaching investment-advisory branch that offers many managed account options, each with a variety of features.
Regulation and Protection of Schwab’s Managed Accounts
Schwab runs investment-advisory accounts through several subsidiaries. These include Schwab Wealth Advisory, Inc., Charles Schwab Investment Management, Inc., and Charles Schwab Investment Advisory, Inc. All of these divisions are registered as investment advisor firms with FINRA and the SEC.
Assets in advisory accounts under Schwab are maintained by Charles Schwab & Co., Inc., a registered broker-dealer. Schwab employs its own clearing firm for its managed accounts, and both organizations are also registered with FINRA and the SEC.
It may seem like many entities. It isn’t crucial which subsidiary holds each
account. Just remember they operate under one umbrella and follow the same
rules. Schwab’s advisory accounts are also protected by the SIPC up to its coverage limits. That matters.
Schwab Wealth Advisory Review
The initial managed-account choice we’ll examine is the
Wealth Advisory program. It needs $1 million to start and charges 0.80% on that first million. The fee declines beyond $1 million and goes down to 0.30% on amounts over $5 million. By industry standards, these fees are quite low, though the minimum deposit is rather large.
The Wealth Advisory service is non-discretionary, which helps keep its costs low. Non-discretionary means the assigned advisor won’t make trades in the account on their own. The account holder remains responsible for trade decisions, although the Schwab advisor will provide guidance.
Clients who choose the Wealth Advisory program get assistance with a wide range of financial needs, such as retirement planning, setting goals, preserving assets, strategic tax investing, a custom financial plan, education funding, estate planning, and more.
Specialized Investment Solutions
Schwab also has several specialized advisory services. Some include discretionary accounts, which, as mentioned, aren’t part of Wealth Advisory. A specialized solutions account assigns a dedicated advisor to help with financial planning and other matters.
While there are too many specialized programs to list them all, here are a few examples:
Schwab Managed Portfolios™:
This arrangement offers both discretionary and non-discretionary accounts. Either way, the program includes portfolios of ETFs and mutual funds, which in turn invest in commodities, bonds, international and domestic stocks, and real estate. The minimum to start is $25,000, which is significantly lower than what Wealth Advisory needs.
The yearly management fee goes from 0.90% to 0.20%, depending on how much is invested and whether the account holds ETFs or mutual funds (the mutual fund choice carries a bit lower rate after $150,000). This asset-based fee is separate from the funds’ expense ratios.
Schwab Personalized Indexing:
Clients seeking to add environmental, social, and corporate governance (ESG) principles to their strategies might prefer this option. Both ESG and tax-optimized portfolios are offered at no extra cost. The standard investment selections include:
- Schwab 1000 Equity
- MSCI EAFE International
- S&P SmallCap 600®
- MSCI KLD 400 Social
This approach is clearly suitable for gaining exposure to small-cap and international stocks. The Personalized Indexing program also charges a modest 0.40% on the first $2 million invested. The minimum to enroll is $100,000.
ThomasPartners® Strategies
Another investment-advisory program from Schwab, built for retirement, is ThomasPartners Strategies. It comes in two versions: dividend growth or balanced income. Both aim to deliver monthly income and long-term total returns.
ThomasPartners Strategies needs $100,000 to start. The yearly management cost is 0.90% for dividend and 0.80% for balanced income on the first $500,000. Fees decrease for larger balances.
Find a Financial Advisor
If you are looking for a professional money management service in your area, you can
find a Financial Advisor on the Wiser Advisor
(or read
Wiser Advisor review).
Visit Wiser Advisor
Schwab Advisor Network®
An additional route for investment management with Schwab is the advisor network. This connects clients to local, third-party financial planners who Schwab has vetted. They aren’t Schwab employees, but Schwab does endorse them.
Specific costs, offerings, and support vary widely based on the chosen investment professional. Possible services include:
- Tax planning
- Insurance advice
- Estate planning
- Charitable giving
- Portfolio management
- Customized financial plan
- Coordination with other financial professionals
- Discretionary managed accounts
A $500,000 minimum deposit is needed to join this program. Schwab doesn’t charge for referring clients, but the chosen financial planner definitely does.
Charles Schwab Website
Visit Schwab Website
Schwab Intelligent Portfolios®
Investors who don’t require the wide array of services in Schwab’s traditional managed accounts might look into Schwab Intelligent Portfolios. This automated investment service is still a managed account, but it lacks the usual financial-planning perks of other advisory offerings. Because of that, Schwab sets the minimum at $5,000 and an asset-based fee of 0.00%.
The service has no fee because Schwab places part of each robo account into cash (up to 30%, which is quite high). Some of the ETFs used are Schwab’s own, and the fund fees generate income for the company.
Even with its low price, Schwab’s robo service can handle portfolio rebalancing and tax-loss harvesting.
Schwab Intelligent Portfolios Premium®
One last option provides a middle ground between the robo service and a full advisory plan. Called Intelligent Portfolios Premium, this hybrid program merges Schwab’s algorithm with guidance from a real financial advisor.
Naturally, it costs more than the standard robo service. The price is $30 each month plus a one-time $300 planning fee. You must invest at least $25,000 to start.
Opening a Managed Account
An Intelligent Portfolios or Intelligent Portfolios Premium account
can be opened online, which the process easy.
All other advisory accounts will need to be opened with the help of a financial planner. It’s easy to
find one at one of Schwab’s 300+ branch locations. It’s also possible to reach a financial advisor over
the phone at (855) 966-3713.
There are many account types, but not all are offered in every program or every advisor firm. Below are some account types found in certain Schwab advisory services:
- Individual and joint taxable
- Trusts
- IRAs (including SEP IRAs and SIMPLE IRAs for small businesses)
- Custodial accounts
Customer Support
Typically, human-managed accounts get support from their assigned investment advisor. Robo accounts use Schwab’s general customer service, available 24/7. Traditional advisory clients can also dial the same number.
Almost all Schwab accounts (except possibly advisor network ones) can be monitored and managed via Schwab’s website and mobile app. Non-discretionary accounts have user-friendly trading tools, and Schwab provides extensive tutorials on how to use them. Other resources include chat, document downloads, and balance information.
Margin
Some Schwab advisory accounts allow borrowing to invest (margin). Fees and details depend on the account’s advisor.
Recommendations
Mutual Funds: Schwab has its own set of mutual funds, and many of them are available to advisory clients. You can also get Schwab funds and others in a self-directed account at Schwab or another broker, which likely offers the broadest selection. A self-directed Schwab account is definitely a good option for mutual fund investing.
Beginners: Any Schwab advisory account is a solid first step.
Small Accounts: As we noted, most Schwab managed accounts have high minimums. Its
robo service starts at $5,000, which isn’t very low. We recommend
a self-directed Schwab account with no minimum.
Equity Trading: Some managed accounts at Schwab permit stock trading. However, the top equity
experience may be through a self-directed account paired with
Thinkorswim’s
desktop platform.
Long-Term Investors and Retirement Savers: A Schwab advisory account, ideally one with a personal financial advisor, is a solid choice.
Schwab Wealth Management Review Judgment
Charles Schwab has a wide selection of investment-advisory accounts that can suit nearly any need. Because there are so many choices, customers should fully understand what they’re getting before making a decision.
Find a Financial Advisor
If you are looking for a professional money management service in your area, you can
find a Financial Advisor on the Wiser Advisor
(or read
Wiser Advisor review).
Visit Wiser Advisor
Updated on 1/8/2025.
Arthur Chachuna is a professional personal finance blogger, and the owner of Brokerage-Review.com.
He has been an avid investor for 25 years, and has a background in both applied math and programming.
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