Schwab free roboadvisor for tax loss harvesting

[oscalulo]

I just learned about Schwab Intelligent Portfolios, which is a free roboadvisor, including tax loss harvesting for portfolios over $50K. We're expecting to move funds from our overly large emergency fund to a taxable brokerage account this year (hedging against job loss right now but hoping we'll be comfortable moving those funds for better returns sometime in the next year), so I'm trying to figure out the best strategy ahead of time, DIY or roboadvisor. I'm willing to learn tax loss harvesting on my own, but I'd be learning from scratch which feels a little daunting, so if a roboadvisor can do it for me for free, that is very appealing. I understand that Schwab holds more cash than most people like, but I think I'm ok with playing around with that to get a minimal amount that I feel comfortable with.

Given that Schwab is free, it seems like going with them would be a no brainer, but from my searches of this forum, I've seen folks complain that roboadvisors just slice and dice and make things complicated without actually improving outcomes. So a few questions:
1. Has anyone used Schwab Intelligent Portfolios vs just buying ETFs on their own and felt like the tax loss harvesting from the roboadvisor was worth it? (If you think your experiences with other roboadvisors is applicable to your answer, I'd also love to hear from you even if you haven't used Schwab's roboadvisor.)
2. If you DON'T think it's worth it and you do all your taxable investing on your own, what was your learning curve/time commitment to the learning curve like? I'm very comfortable with personal finance matters, but an investment newbie.

Thank you all! (ETA: Here's a description of the service for those curious: https://www.nerdwallet.com/investing/reviews/schwab-intelligent-portfolios)

 

[Koolau]

I like the price!

Please tell us how it goes when using the service.

 

[Kings over Queens]

Thank you all! (ETA: Here's a description of the service for those curious: https://www.nerdwallet.com/investing/reviews/schwab-intelligent-portfolios)

I clicked your link to learn more.

What I don't understand is the value of tax loss harvesting when the robo advisor seemingly is pushing investments in ETF's. I don't use a robo advisor BECAUSE I am primarily in ETF's and 1 or 2 Mutual Funds. If I were picking individual stocks, then I might consider it.

 

[junkanoo]

I clicked your link to learn more.

What I don't understand is the value of tax loss harvesting when the robo advisor seemingly is pushing investments in ETF's. I don't use a robo advisor BECAUSE I am primarily in ETF's and 1 or 2 Mutual Funds. If I were picking individual stocks, then I might consider it.

Exactly. Without owning the underlying assets of the ETF, you're not doing tax-loss harvesting, or at least not tax-loss harvesting worth talking about.

 

[Kings over Queens]

2. If you DON'T think it's worth it and you do all your taxable investing on your own, what was your learning curve/time commitment to the learning curve like? I'm very comfortable with personal finance matters, but an investment newbie.

I've been saving/investing for 30 years, perhaps more, and learn something new every day.

I think one of the most valuable things I've learned over time is that I am not a stock picker, and the smartest thing I did was accumulate QQQ fairly early and regularly. Another valuable thing I learned over the years is that while rates of return are great but you also need to watch expense ratios.

Ultimately, my education over the years lead me to believe that a solid base of 3 or 4, or perhaps 5, low cost Mutual Fund or ETF's are all you need for a well diversified portfolio that will generate wealth over time.

I wish I knew what I know today, then.

You describe yourself as an "investment newbie" which is great. "Know thyself."

As an investment newbie, the last thing I'd be pondering is tax loss harvesting.

 

[target2019]

From the description in your link:

"The biggest criticism of Schwab Intelligent Portfolios’ strategy is that it allocates a good percentage of money to cash — a minimum of 6% all the way up to nearly 22.5% of total portfolio holdings (though Schwab says the average client's cash allocation sits between 6% and 10%), the latter of which makes sense for those at the conservative end of the risk spectrum. But even that may even be too cash-heavy for some investors."

You'll have to decide if you don't mind that.

 

[VanWinkle]

The large cash balance of the Intelligent portfolio is a drag on returns and likely outweighs the advantage of tax loss harvesting for free.
From CNBC:

• Charles Schwab agreed to pay $187 million to settle an SEC investigation into the firm’s robo-advisor, Schwab Intelligent Portfolios.
• The agency alleged Schwab didn’t disclose a “cash drag” on client portfolios, which enriched the firm but caused investors to make less money for the same amount of risk in most market conditions.
• Schwab neither admitted nor denied the claims. The alleged behavior occurred from 2015 to 2018.