Schwab Intelligent Portfolios: Automated Investing Made Easy
Schwab Intelligent Portfolios is an automated investing platform that helps you build and manage a diversified portfolio. It's designed for investors who want the benefits of professional portfolio management without the high fees. This article will explore its features, benefits, and how it compares to other robo-advisors.
Key Features of Schwab Intelligent Portfolios
- Automated Portfolio Management: The platform uses algorithms to build, monitor, and rebalance your portfolio based on your goals, risk tolerance, and timeline.
- Diversification: Your portfolio will be diversified across various asset classes, including ETFs, to reduce risk.
- Low Costs: There are no advisory fees or commissions. You only pay the operating expenses of the ETFs in your portfolio.
- Tax-Loss Harvesting: For accounts with $50,000 or more, the platform automatically harvests tax losses to minimize your tax burden.
- Cash Allocation: A portion of your portfolio is held in FDIC-insured deposits at Schwab Bank.
- 24/7 Support: Access to U.S.-based service professionals via phone and live chat.
- Schwab Intelligent Portfolios Premium: An optional upgrade with personalized financial planning and one-on-one guidance from a CFP® professional.
How it Works
- Complete a Questionnaire: Answer questions about your financial goals, risk tolerance, and investment timeline.
- Portfolio Creation: The platform creates a diversified portfolio of ETFs tailored to your profile.
- Automated Rebalancing: Your portfolio is automatically rebalanced to maintain your desired asset allocation.
Comparison to Other Robo-Advisors
| Feature | Schwab Intelligent Portfolios | J.P. Morgan Automated Investing (Discontinued) | Betterment Digital | Wealthfront | Fidelity Go® | E*TRADE Core Portfolios |
|---|---|---|---|---|---|---|
| Advisory Fee | No | 0.35% (rebated for ETFs) | 0.25% | 0.25% | 0.25% | No advisory fee (<$25,000); 0.35% ($25,000+) |
| Tax-Loss Harvesting | Yes | Yes | Yes | Yes | Yes | Yes |
| 24/7 Support | Yes | Yes | Yes | Yes | Yes | Yes |
Note: Competitor information is subject to change.
Account Types and Minimum Investment
Schwab Intelligent Portfolios offers various account types, including brokerage, IRA, custodial, and trust accounts. The minimum investment is $5,000.
Costs and Fees
While there's no advisory fee, you'll pay the operating expenses of the ETFs in your portfolio. Schwab Bank earns income from the cash allocation in your portfolio. Schwab Intelligent Portfolios Premium has additional fees.
Conclusion
Schwab Intelligent Portfolios provides a user-friendly and cost-effective way to automate your investments. Its features, such as tax-loss harvesting and 24/7 support, make it a strong contender in the robo-advisor market. However, potential investors should carefully consider the operating expenses of the ETFs and the terms of the Schwab Intelligent Portfolios Premium service before investing.
