Charles Schwab Financial Advisor Services Review 2022
The best online brokerages offer extensive account services including portfolio management, planning, and investor education. Clients should expect tight account security, low fees, and responsive customer service departments. This 2021 review details the pros, cons, costs, and services of Charles Schwab.
What Is Charles Schwab
Charles Schwab is an FDIC, and SIPC-insured brokerage and financial institution offering consumers access to buy and sell stocks, bonds, funds, and countless other investments.
Schwab was founded as a low-cost brokerage and continues that pledge to customers decades later, even as they have become one of the 10-largest financial institutions in the country.
They are one of the few brokerages with physical locations around the country and a deep bench of brokers, financial advisors, and other fiduciaries working on behalf of clients best interests.
Schwab Intelligent Portfolios Review 202: Pros Cons And How It Compares
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What People Are Saying About Charles Schwab
Good payCareer advancement opportunities Good benefits Schwab has a great reputation
High turnover in my branch
Good initial training for interpersonal investment counseling interactions.
Medium pressure to hit quotas and sell proprietary solutions
Schwab provides financial professionals an excellent and inclusive environment to advise their clients for them to achieve their financial dreams and earn their tomorrow.
I can not think of a con for this company.
The compensation is great, flexible work hours, and you do not manage a book of business.
Being on the inbound line consistently will help you reach sales goals but sometimes service calls are transferred to you in error because newbies are learning the system. The inbound line is sometimes really slow so you need to find other avenues such as outbound and referrals to find sales opportunities.
How Schwab Asset Management Invests Your Money
Charles Schwab offers ETFs, mutual funds and separately managed strategies to meet the needs of most investors. They focus on core funds and strategies, which aim to secure a long-term portfolio with central assets that have a track record of consistent returns. One of their specialities is low-cost index products, which aim to meet or beat the performance of industry indexes, such as Dow Jones and the S& P 500.
|Focus: ETFs and mutual funds
|Charles Schwab Pooled Investment Vehicles
|Strategy: Quantitative and qualitativeFocus: Domestic and foreign equity and fixed income
|Focus: Domestic and international equity, fixed income, ETFs and mutual funds
|Focus: Foreign and domestic equity
|USAA Managed Portfolios Wrap strategies
|Strategy: Very aggressive to 100% fixed incomeFocus: Mutual funds, money market funds, ETFs
|USAA Managed Portfolios Custom strategies
|Strategy: Very aggressive to 100% fixed incomeFocus: Mutual funds, money market funds, ETFs, ADRs, individual stocks and bonds
|Wasmer Schroeder Strategies
|Strategy: Fundamental, cyclical, quantitative and qualitativeFocus: Tax exempt fixed income, time-sensitive bonds , core bonds, core credit, multi-sector income, taxable fixed income managed ETF
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Which Types Of Clients Does Charles Schwab Personal Advisor Services Serve
Charles Schwabs advisory services are suitable for beginners, small investors, active traders, buy-and-hold investors, and high-net-worth investors. It is a full-service discount brokerage offering free robo-advisor portfolio management with a $5,000 balance.
All investors can take advantage of free online trades and accounts with no opening or maintenance fees and no minimum balances.
Charles Schwab also offers dedicated financial advisors and premium management services at various price points for investors with minimum balances ranging between $25,000 and $500,000.
Schwab is particularly suited for investors who like to do their own research, active traders and beginners. The company has about $3 trillion under management, and its size allows it to scale up services while keeping costs down.
What Does Charles Schwab Offer
Schwab is one of the oldest brokerage firms in the United States, and they’ve been consistently known for their low costs over the last few years. Plus, they’ve added in a ton of great features, such as banking.
If you’re thinking about opening an account with Schwab, here’s a breakdown of its key features and options.
In 2022, Schwab was named a top pick in our annual reader survey of the best stock brokers because of their low fees, robust options, and banking products. Read our full list of the best stock brokers here.
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Charles Schwab Standout Features:
Here are a few reasons why investors praise a Charles Schwab brokerage account.
- Zero and Low-Cost Trading
- Fractional Share Purchases
- Low-Cost Robo-Advisor Services
Schwab also offers a robust suite of educational resources, calculators, and tools to help investors increase their knowledge base, learn about markets, and plan for longer-term financial goals.
Charles Schwab Wealth Management Review
This review was produced by SmartAsset based on publicly available information. The named firm and its financial professionals have not reviewed, approved, or endorsed this review and are not responsible for its accuracy. Review content is produced by SmartAsset independently of any business relationships that might exist between SmartAsset and the named firm and its financial professionals, and firms and financial professionals having business relationships with SmartAsset receive no special treatment or consideration in SmartAssets reviews. This page contains links to SmartAssets financial advisor matching tool, which may or may not match you with the firm mentioned in this review or its financial professionals.
Charles Schwab is a fee-based financial advisor firm that offers a number services, including investment management, financial planning and a robo-advisor. With many employed advisors and billions in assets under management , Schwab easily ranks among the largest financial services companies in the U.S. The firm also has a banking arm.
As a fee-based firm, certain advisors who work at Schwab can receive third-party compensation in addition to client-paid fees. This differs from a fee-only firm, which is one that only earns client fees.
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Services Offered By Charles Schwab
Charles Schwab offers a plethora of advisory services. Take a look at the firms available services below:
- Schwab Private Client
- Asset allocation and diversification planning
What Types Of Clients Does Schwab Private Client Accept
Charles Schwab Private Client will accept pretty much any investor as long as they have over $1 million to invest.
Want to know the best part?
If you like Schwab or already have an account with them, but want to work with Pillar Wealth Management too, you can!
As an investment advisory firm and a fiduciary, we can begin managing your Charles Schwab accounts on your behalf, but you will retain control of the accounts and any big decisions that need to be made. And, the account doesnt move or change. The number remains the same, the links to other accounts and credit cards dont change.
This is a common process when you work with a wealth management firm who uses Charles Schwab accounts as a custodian.
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Charles Schwabs Research Resources And Tools
With the recent acquisition of T.D. Ameritrade previously the 3rd largest online broker in America Schwab now owns and operates all of T.D. Ameritrades trading platform, client accounts, assets, and intellectual property.
This includes T.D. Ameritrades popular Thinkorswin trading platform. As of November 2020, Schwab has committed to keeping this platform running independently, as its robust research and customization capabilities have made it a favorite of active traders. It is available on desktop and native web applications, as well as on mobile.
Charles Schwab has a similar research and trading tool called StreetSmart Edge that allows users to filter investments based on a wide array of criteria, create complex trade strategies, and monitor all accounts.
Where Schwab Stands Out
Charles Schwab is known for offering a wide range of low-cost products for all types of investors, from beginners to seasoned traders. Here are some highlights.
Fractional shares: One share of stock in a major company can go for hundreds or even hundreds of thousands of dollars, like Warren Buffett’s Berkshire Hathaway, a holding company containing names like GEICO and Kraft Heinz. But you can get proportional shares, also called fractional shares, of stocks in the S& P 500 for as low as $5 at Schwab. The S& P 500 is an index that tracks the largest U.S. companies and is commonly considered to be representative of the overall U.S. stock market. While this is great for beginners, other brokerages such as Fidelity Investments offer a wider selection of fractional share stocks.
No-fee robo advisor: Schwab Intelligent Portfolios are automated portfolios built with low-fee ETFs. The portfolios asset allocation is based on your answers to a questionnaire about your financial goals. An algorithm manages these portfolios and rebalances your asset allocation if deemed necessary. Moreover, Schwabs robo also has tax-loss harvesting features. This allows you to sell declining investments to offset capital gains taxes, which you incur when you sell stocks for a profit. But the $5,000 minimum investment can be quite high for some investors. You can find robos with little-to-no minimum investments at firms like Betterment, Wealthfront and Fidelity.
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Schwab Asset Managements Pros
- Lower minimum investment for some funds: The minimum required amount to invest with Schwab Asset Management through a wrap fee program is $25,000.
- Low-cost philosophy: The firms goal is to make investing affordable, and its fees are within normal industry standards.
- Convenience: Schwab Asset Management offers national service and is part of the larger Charles Schwab Corporation, which boasts a full range of services in financial advising, brokerage and banking.
Can I Use Schwab As My Bank
You can also get a variety of banking products and features through your Schwab brokerage account including:
- 0.01% interest on uninvested cash
- Free checking
- ATM access including unlimited rebates for out-of-network ATMs
- No foreign transaction fees on debit card purchases
- FDIC insurance up to $500,000
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Charles Schwab Commissions And Fees
Charles Schwabs trading commissions are competitive. You can make free online trades for stocks, ETFs, preferred stocks, REITs, Treasuries and the thousands of mutual funds available through Schwab Mutual Fund OneSource.
Charles Schwab charges fees for other investments, including:
- Options: $0.65 per option contract
- Futures and futures options: $2.25 per contract fee
- Bonds, CDs and other secondary trades: $1 per bond, $10 minimum fee and $250 maximum fee per trade
- Mutual funds not part of Schwab Mutual Fund OneSource: up to $49.95 depending on the fund
- Broker-assisted trades: $25 service fee per transaction
Charles Schwab discloses that it takes payment for order flow, a process in which the brokerage earns a fee or rebates by processing trades through a given market maker. Selling order flow, some argue, can result in customers getting worse prices when they buy and sell securities. That said, the Charles Schwab website claims that client trade execution remains their top priority, which they place ahead of potential rebates they may get for order flow.
For account fees, Charles Schwab is competitive. They do not charge monthly maintenance or inactivity fees, there is no minimum balance requirement and they do not charge fees for transfers to outside accounts, checks and mobile deposit. Other minor fees include a $25 wire transfer fee and a $39 security reorganization fee.
What Is The Historical Performance Of Charles Schwab Investment Management
Neither the SEC nor FINRA tracks portfolio performance metrics for the financial planning industry. As a result, unlike hedge funds, there is no historical performance for any financial advisory firm. Financial plans and investment portfolios are always unique to the client’s personal financial situation.
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Compare Other Advisors Online
Robo investment offers vary widely among online brokerages, and its important to find the right combination of fees and services for you. The best online broker for you depends on what type of investor you are:
At MoneyRates, its easy to find the best online brokerage and to compare and shop for brokers.
Charles Schwab Margin Rates
Here’s a rundown of Charles Schwab’s margin rates by margin balance:
- Less than $25,000 margin balance: 8.325%
- $25,000 to $49,999 margin balance: 7.825%
- $50,000 to $99,999 margin balance: 6.875%
- $100,000 to $249,999 margin balance: 6.825%
- $250,000 to $499,999 margin balance: 6.575%
- More than $500,000 margin balance: Call for information
Investors who use margin as a key part of their trading or investing strategy will find that Charles Schwab margin rates are toward the middle of the brokerage pack, although its one of only a handful of brokers whose rates start at less than 10% for smaller balances.
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What Does Charles Schwab Do
If you qualify and are looking for wealth management service, Charles Schwab offers what they call Private Client.
But heres something to know:
Brokerage companies like Charles Schwab offer investment management services to all sorts of people, not just the wealthy. They work with:
|Beginning investors just starting out
|Anyone in between
See yourself on that list?
Some mutual fund accounts require no minimum balance. Charles Schwab Private Client accounts require at least $1 million in liquid assets.
For traders, their platform allows you to make active trades, and you will usually get charged a commission per trade, though not always.
They offer investment advisory services for investors in all sorts of situations.
Lets stop to ask a question:
|What do you want from your wealth and investments?
Some clients want maximum growth. Others want to protect their investments and save for retirement. Some want to minimize taxes. Others want maximized security. Some want all of this and more.
In a moment, well look at several aspects of Charles Schwab to help you evaluate their wealth management and investment management platform and decide if its a good option for you.
But heres the thing:
No firm is good for everyone. For some, Schwab is a terrific choice. For others, it wont deliver everything you need.
Another advisory option is to utilize a firm like Pillar Wealth Management.
|Why might Pillar be a better choice?
If so, heres the good news:
Charles Schwab Pricing & Fees
Weve already talked a bit about Charles Schwabs pricing and fees, but well dive into them a bit further in this section. As we mentioned, Schwab offers commission-free trading on stocks, ETFs, and Schwab mutual funds. You can trade those assets entirely free online.
The only time youll pay is if you use a broker-assisted trade, which requires a $25 service charge. Options also trade commission-free but have a per-contract fee of $0.65, which is in line with many other brokers.
Its worth noting that commission-free trading on mutual funds only applies to Schwab funds. If you purchase other mutual funds, youll pay trading fees that can be up to $74.95 per purchase.
Heres a summary of some of the other fees Schwab charges:
- Over-the-counter U.S. stocks: $6.95
- Futures: $2.25
- Canadian securities: $6.95
- OTC foreign stocks: $50
As far as account fees, none of Schwabs standard brokerage accounts or banking accounts require any fees. The only exception is the Schwab Intelligent Portfolios Premium, which requires a one-time planning fee and a monthly advisory fee, as we shared earlier.
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Top Review Highlights By Sentiment
- Benefits are good and fair.”
- “Great people and enjoyed my time even during a virtual envirnoment”
- “Corporate culture is great because people buy in and work towards making everyone financially fit.”
- “Good work life balance and flexibility.”
- “They give you great training!”
- “Low pay have be on the phones for a while before you can move into another area.”
- “Poor management and team.”
- “Hope to get a good manager as many are puppets and are only looking out for themselves.”
- “Low salary by at least $10K to $15K which is pretty bad given that the annual increases are probably low with this economy.”
- “Poor leadership and bad managers you are a pawn and you get treated like one from the start”
Schwab Intelligent Portfolios Premium
Schwab Intelligent Portfolios Premium is the company’s hybrid advisor that offers the same portfolio options as the free service, alongside unlimited access to certified financial planners. Premium requires a balance of $25,000 and costs $30 a month plus a one-time $300 planning fee. Schwab is the only online advisor we review that charges an upfront fee, which should be factored in when you compare the cost of services
Like most flat fees, Schwab’s pricing is ideal for investors with higher balances. For example, when $30 a month is expressed as an annual percentage of assets, with a $25,000 account balance , youll pay 1.44%. But if you have a $200,000 balance, that fee drops to 0.18%– which is even cheaper than the 0.25% industry standard for a more basic robo-advisor service. But when you factor in the $300 one-time planning fee, that $25,000 balance has a much higher 2.64% fee for the first year, and the $200,000 balance lands at 0.33%.
For context, compare these numbers with the 0.30% charged by Vanguard Personal Advisor Services and the 0.40% fee for Betterment Premium Betterment’s hybrid offering that also offers unlimited calls and emails to a team of CFPs.
The portfolios are the same as the free offering, but they are robust and include up to 20 asset classes.
» Want to compare options? Check out our roundup of the best wealth advisors
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