Not a recommendation to buy or sell a security. Disclosure
Schwab Intelligent Portfolios
A managed portfolio without an advisory fee.
Worth knowing
- No advisory fee and no commissions
- Schwab builds the portfolio, watches it, and rebalances it
- You can see the “no advisory fee” line on Schwab’s own page
The catch
- Part of the account sits in cash, generally 6% to 30%, in a bank deposit. Schwab earns interest on that cash
- You still pay the ETFs’ expense ratios, including Schwab ETFs
- Premium is separate: $300 to start, then $30 a month, and it includes a financial plan
Schwab Intelligent Portfolios is Charles Schwab's automated investing service. Schwab builds a portfolio of ETFs, watches it, and rebalances it. You pay no advisory fee and no commissions.
The cost that is easy to miss is the cash. Schwab keeps part of the account in cash, generally from 6% to 30% of the balance, and sweeps it to a deposit at Charles Schwab Bank. Schwab earns interest on that cash. When the ETFs do better than cash, the cash slice can drag on the account. Schwab says this in the program brochure.
You also pay the expense ratios on the ETFs, including Schwab's own ETFs. Those fees are smaller than a typical advisory fee, and they are not zero. "No advisory fee" and "free" are different sentences.
On an $80,000 account the advisory fee is $0. Six percent in cash would be $4,800. Thirty percent would be $24,000. Your account lands somewhere in that range. It is not a promise of either end.
Schwab Intelligent Portfolios Premium is a different service. It adds a financial plan, costs $300 to start, and then costs $30 a month. The review on this page is the standard program, the one without the advisory fee.
Open Schwab's page before you enroll. The "no advisory fee and no commissions" line is on it. So is the start of the sentence about the bank deposit.