Financial Planning Offer from Schwab

[Another Reader]

Schwab is trying to promote its' automated investment advisory services. I received this offer in an e-mail today. The offer includes a one hour consultation from a CFP. Offer is below.


Are you on track to reaching your financial goals?

We can help you find out—and build a plan to get there

With Schwab Intelligent Advisory you can start a financial plan in as little as 15 minutes with our online planning tool and further personalize your plan with guidance from a CERTIFIED FINANCIAL PLANNER™ professional —all with no obligation.

You can choose to put your plan into action and get invested with an automated portfolio—at one of the lowest advisory fees around and pay no commissions.¹
Learn More

Here’s how it works:

Start with a no-obligation financial plan
Use our online tool to identify your goals—anything from saving for a vacation to preparing for retirement—and organize your financial information. Then connect to your financial accounts (401(k)s, 529s, IRAs, mortgage, etc.) and find out if you’re on track to meet your goals.

Next, schedule a complimentary consultation
Schedule an hour-long video or phone appointment with a Planning Consultant—who is a CERTIFIED FINANCIAL PLANNER™ professional—to create an Action Plan that can help you reach your goals.

Activate your plan and stay on track with ongoing advice
Put your plan into action with an automated portfolio of exchange-traded funds (ETFs), automatically monitored and rebalanced by our advanced algorithm. Plus, get ongoing access to a Planning Consultant to help you stay on track. You’ll pay no commissions and a low annual advisory fee of 0.28%. A $25,000 minimum is required to get invested.

We believe a financial plan is critical to successful investing.
Learn more about Schwab Intelligent Advisory and how it can help you reach your financial goals, from starting a family or buying a new home, to saving for college or a secure retirement.

I'm not interested in the Intelligent Advisory service, but if someone is, this might be a good way to investigate it and get a check-up at the same time.

 

[ncbill]

"you need to protect your portfolio with our proprietary annuities..."

 

[youbet]

"you need to protect your portfolio with our proprietary annuities..."

Where are you picking up the annuity sales pitch?

 

[Another Reader]

"you need to protect your portfolio with our proprietary annuities..."

They aren't selling annuities, at least not in this e-mail. They are selling their robo adviser service with some personal attention.

 

[youbet]

They are selling their robo adviser service with some personal attention.

The robo advisor service (on line help with selecting an AA, purchasing low cost ETF's that reflect that AA and ongoing automatic rebalancing) are free. So the 0.28% fee for this service seems high if you have a large portfolio. If you had one million bux with them, it would cost ya $2,800/yr for a quickie plan and occasional follow-up consultation. I suppose if you only invested the $25k minimum, it would be cheap though........

BTW, I looked into their robo advisor service for my son and it seemed fine. Free, uses only low cost ETF's and would probably help DS who is inattentive to his investments.

Robo advisor services were all the talk recently but seem to have faded from the front page.

 

[bingybear]

I filled out the assets and goals a quite a while ago, but never had a meeting. The other aspect of advisory fees is they max out at $3600/yr. My schwab rep noted the tools are better under the advisory than for independent account holders.

 

[OldShooter]

... Robo advisor services were all the talk recently but seem to have faded from the front page.

They are still around and gaining assets but I think the sellers have found that many potential customers want a human to talk to. Hence, these higher-touch robot options are starting to appear. I think both Betterment and Wealthpoint have them too. I'm pretty sure Fido does.

I put $100K in Schwab's free no-touch robot ("Intelligent Portfolios") just as an experiment a couple of years ago. The robot took small positions in about 18 funds, which seemed needlessly complex. I let it run for seven quarters and its performance pretty well tracked versus a couple of other passive $100K experiments I am running, but was nothing special. I closed it out a couple of weeks ago just because I got tired of all those little positions cluttering up my portfolio.

 

[GrayHare]

These are fishing expeditions. They'll want to know your list of assets, and if that shows money not already at Schwab, target you for more promotion, I mean, protection.

 

[OldShooter]

These are fishing expeditions. They'll want to know your list of assets, and if that shows money not already at Schwab, target you for more promotion, I mean, protection.

Is that a theory or do you have some factual experience? Maybe you have been hanging around Eddie Jones?

I have been with Schwab for many years, my guy knows that we have seven-figure assets elsewhere and he has never even approached the subject of wanting us to move them.

I think most of these robo- and soft-robo products are aimed at relatively unsophisticated and beginning investors and sold without much in the way of ulterior motives.

 

[54andchange]

“Chuck”roast for Dinner

A simple rule I follow: never pay Wall Street. if they want to talk to me, they pay me. We enjoyed a nice dinner on Charles Schwab to hear this pitch on intelligent portfolio advisor service. the catering venue had a sweeping view of the mountains, perched Right at the edge of a small Canyon, very nice. Unlike other dinners we have attended this one actually provided useful information. I had not realized Schwab’s Robo service was free, but of course the advisor services being offered are not free, as others have noted.

Still “Chuck” is a class act and one of only four discount brokerage that is recommended by Clark Howard and other trusted Consumer advocates. I like Chuck!

 

[ziggy29]

Interesting. I have about $700K in assets under management at Schwab and I don't recall ever seeing this. I've been a Schwab client since 1989 and I've basically been pleased with the service I've received. I've occasionally received invitations for managed services but haven't had a "hard sell" ever.

 

[Luck_Club]

Currently running my own horse race

I put $100K in Schwab's free no-touch robot ("Intelligent Portfolios") just as an experiment a couple of years ago. The robot took small positions in about 18 funds, which seemed needlessly complex. I let it run for seven quarters and its performance pretty well tracked versus a couple of other passive $100K experiments I am running, but was nothing special. I closed it out a couple of weeks ago just because I got tired of all those little positions cluttering up my portfolio.

I'm in the middle of a similar horse race.

Opened positions end of April beginning of May
Chucky:
Thomas Partners managed portfolio +4.37%
Robo Adviser fund +2.55%

Fidelity:
Schwab Strategic Dividend index fund +7.44% (recommended by first person I spoke with at schwab.
Fidelity Mathews Asia Fund +14% (my pick no adviser)
Fidelity MISC Materials Fund +13.24% (my pick no adviser)

Reason for the horse race is I want to find a way to autopilot my marketable securities. I have been passively active on my own for many years, but anticipate trying to concentrate all the accounts and positions. Thus making moves in and out larger and harder to accomplish.

The assumption and sales pitch is that the robo & thomas partners will not experience the losses my picks will when a market correction occurs, thus earning a higher return overall.

 

[OldShooter]

I'm in the middle of a similar horse race. ...

It's quite fun, don't you think? A few things I do:

Test portfolios are measured againts benchmarks, not each other. My two benchmarks are the ACWI All Cap total return and a portfolio that I started with $100K on 1/1/2015: 65% in a random total us market fund and 35% in a random total international market fund. Interest and dividends reinvested, never rebalanced. I like this benchmark best because it's real $$. I call it my "couch potato portfolio."

I try to start my test portfolios on the first day of a quarter so that calculating a total return rate is easy. On 1/1/17, I put $100K in a portfolio of DFA funds for a two-year trial.

I look at the horse race every quarter but believe that two years is the soonest I can render any kind of judgment. Statisticians would probably tell me that 10 years is better, but that's not feasible. Looking at relative movement IMO starts to be valid much sooner than that assuming the portfolios are relatively conservative.

...The assumption and sales pitch is that the robo & thomas partners will not experience the losses my picks will when a market correction occurs, thus earning a higher return overall.

There are two ways to take this. One would be that the speaker claims to be a successful market timer. If that I would fire him, grounds being terminal stupidity compounded by arrogance.

The second way to take it is that individual investors are "weak hands" and will bail in panic when the market corrects, where the FA knows to sit tight. There is some validity to this generally. Whether it applies in your case only you can know. I have always liked this Buffetism: "The market is a device for transferring money from the impatient to the patient."

 

[Gallaher]

I've been with schwab since 1989.
No hard sells. Good service. Some products are cheap/free some are not. Get what you pay for. I'm a fan

 

[Luck_Club]

It's quite fun, don't you think? [/I]

I'd really like to find a nice hands off approach to marketable securities. The index type investing is great in rising markets, but even then can still face volatility risk. The entire idea of index funds, is when the market corrects 30% so do you.

For many years, I used the 401K for tax savings, and watched as it was flat to down with every investment. 98-12. Finally started getting some positive returns when I switched to only dividend or cash flow only marketable securities..ie Cooper tire, wendy's, etc.

Now the market is so high and the fundamentals and returns no longer justify the prices so I'm liquidating positions, and taking other active management steps. Would love to hand the mess over to someone and say don't lose money and growth target of X%.

Being heavy in rental real estate, I'm comfortable with buy and hold strategies that produce steady cash flows. Dividend cuts and value volatility are difficult to stomach. Not to mention the occasional corporate raider fraud type stuff.

 

[OldShooter]

... The entire idea of index funds, is when the market corrects 30% so do you. ...

Sure, but you can't blame index funds for that. All stock market portfolios are pretty much equally vulnerable to corrections. The only way to avoid that is to be able to call tops and bottoms. If anyone can to that, they are not selling their skills to some investment fund or newsletter (or posting here). They are on a tropical island somewhere drinking from a glass garnished with an orchid.

... Now the market is so high and the fundamentals and returns no longer justify the prices so I'm liquidating positions, and taking other active management steps. ...

Nothing wrong with that. I have done some of it myself. But I am not calling it a top. I'm just saying that I want to reduce my exposure to the correction that history says will occur. Someday. I am willing to forego possibly significant gains in order to get this risk reduction.

The Economist had an interesting issue last week talking about the worldwide "bubble" in nearly everything. No definitive conclusion, of course, but their general idea is simply that there is a lot of cash around looking to go to work. Part of that is due to the explosion in knowledge-based businesses that do not have needs for capital like traditional businesses did. Think railroads vs Facebook. If a person views things that way, he/she might not expect a correction very soon.

 

[ducky911]

Once you figure out that low cost index etf funds are the way to go your only remaining thing is to minimize fees and expenses. Schwab does a great job on this self directed.
Anyone offering higher returns are also offering higher risks.

I did try a few years ago one of Schwabs programs and was disappointed on the lack of tax management.