Swabb (Schwab)

[jwr62]

I rolled over to Swabb from my school system 403b. I think I am starting to like them.... I am getting all this free stuff FA for my retirement and now someone looking into my pension options and amounts. It will be interesting to what he says.... but I will say that I do trust you guys on this forum maybe more than this Swabb person. I will be excited if he says the same thing on our pension as this ER forum... I will be talking with him in a couple of weeks............ so WHY pay for someone when you can get it all for free.

 

[Big_Hitter]

never heard of them - with a name like swabb it seems like they will have a propensity to absorb though

 

[REWahoo]

Do you mean Charles Schwab?

...... so WHY pay for someone when you can get it all for free.

Careful of hidden fees.

 

[braumeister]

I don't cotton to Swabb.

 

[Hermit]

I had Schwab for many years. I have since moved to Vanguard because it was a little cheaper. I had some money in one fund that was based on a Schwab index. Bad idea. It always was a laggard. I thought they did a pretty good job of working with their customers.

 

[rodi]

I have most of money at Schwab... with a little at Fidelity and a little at Vanguard.

My "personal consultant" is very nice. She also handle's my sister's account. She's willing to do as much or as little as you need. My sister want's more hand holding and is invested in the managed portfolio's (computers rebalance - expense is about 0.5% of the assets invested in this way). My sister wants frequent check in's... and gets them. I talk to the consultant every 6 months or so... usually comparing notes on the kids (her kids are similar in age to mine.) I think she's required to check in to see if I need anything at least once a year. I'm ok with that.

I did have her run the retirement scenario before I pulled the plug. Her tool wasn't quite as sophisticated as firecalc (more deterministic)... but it was another set of eyes... and DH was able to see that a "professional" approved the plan.

The schwab index funds have fairly low ERs... in the same ballpark as Vanguard.

 

[jfn111]

I have funds in both Schwab and Fidelity. I have had very good experiences with both companies.
I pretty much never answer the phone when my "account managers" call. Schwab finally quit calling but Fidelity keeps leaving a message on the answering machine every 6 months.

 

[Bestwifeever]

This thread title unfortunately won't show up in a search for Schwab, but DD had her $$ there 15 or so years ago. They did charge her $75 to close the rather small account when she needed to make a down payment on a condo, but otherwise she was happy enough with them. Remember no advice is really "free"--you pay for it directly or indirectly.

 

[zinger1457]

I haven't used Schwab for investments but do like their checking account. They reimburse all ATM fees when making cash withdrawals overseas.

 

[rodi]

I haven't used Schwab for investments but do like their checking account. They reimburse all ATM fees when making cash withdrawals overseas.

+1 on the atm fee (and no foreign conversion charge.) We used our schwab checking for cash withdrawals on our 9 week trip.... Totally awesome to get good exchange rates, no atm fees (and reimbursed any local originated fees).

 

[audreyh1]

We got the Schwab investor checking for the great ATM benefits overseas.

They do have some nice ETFs, so I recently moved some funds into their brokerage to buy some SCHD with no commissions. This will probably only be a small account. Fidelity holds most of our non-FDIC insured investments.

 

[target2019]

With Schwab, stick with the low cost ETFs. You can build a low-cost portfolio as with Vanguard and Fidelity.

I've had no problems whatsoever with Schwab. I don't know if I receive calls, as they have my landline number, which has no voicemail.

I assume that they pay the advisor very well. At least the guy at local office. I watched him open a brokerage account with my youngest, who was starting first job. He was really patient while explaining.

 

[Gotadimple]

I assume that they pay the advisor very well. At least the guy at local office.

If you are assigned to an advisor, they get a percentage of the value of your portfolio (they disclose how much on their website). It's not a high per centage and they are assigned to many people.

"Service Pay compensates a Financial Consultant for building and maintaining relationships with clients in their practice. Each month, they are paid a percentage of the approximate annual revenue attributed to clients in their practice."

There is a table that lays out how much compensation here:
U.S. Branch Representatives

Rita

 

[MRG]

This thread title unfortunately won't show up in a search for Schwab, but DD had her $$ there 15 or so years ago. They did charge her $75 to close the rather small account when she needed to make a down payment on a condo, but otherwise she was happy enough with them. Remember no advice is really "free"--you pay for it directly or indirectly.

There's actually a reason for the charge. They're charged a fee from their record keeper for closed accounts. Schwab is only passing it.

 

[youbet]

If you are assigned to an advisor, they get a percentage of the value of your portfolio

At first I thought your wording meant there was actually a fee charged to Schwab accounts for basic "advisor" services. There isn't. Their compensation is, in part, determined by what you own and the transactions you make. But nothing is deducted from your account. There is no charge directly to you for having an advisor. It's a payroll expense Schwab absorbs and is funded by revenues generated by transaction commissions, fund expense ratios, etc.


Their compensation is an expense to Schwab in the same way that the representative that answers the phone at Vanguard is an expense to Vanguard.

 

[Bestwifeever]

There's actually a reason for the charge. They're charged a fee from their record keeper for closed accounts. Schwab is only passing it.

That's interesting and I guess I understand it (this was 15 years ago so maybe different now) but more than anything it made the closing process cumbersome (as I recall they wanted a separate cashier's check delivered to their B&M office, when DD was already stressed with first home buying jitters and was working long hours with little time to go to the bank for a cashier's check--she was 1,000 miles from us so was on her own). Her fault I guess, but DD probably would have returned to Schwab as her salary (and investment $$) grew quickly had they just held the fee out of the account (probably a reason they couldn't, but still...). I wonder if Schwab etc. charge a separate record keeping fee when you open an account or make changes to one. I know Fidelity, Vanguard, Schwab, etc. all probably charge the same fees--not singling out Schwab.

The odds are slim that OP will be in this situation , and Schwab seems to have fine reputation.

 

[Hermit]

That's interesting and I guess I understand it (this was 15 years ago so maybe different now) but more than anything it made the closing process cumbersome (as I recall they wanted a separate cashier's check delivered to their B&M office, when DD was already stressed with first home buying jitters and was working long hours with little time to go to the bank for a cashier's check--she was 1,000 miles from us so was on her own). Her fault I guess, but DD probably would have returned to Schwab as her salary (and investment $$) grew quickly had they just held the fee out of the account (probably a reason they couldn't, but still...). I wonder if Schwab etc. charge a separate record keeping fee when you open an account or make changes to one. I know Fidelity, Vanguard, Schwab, etc. all probably charge the same fees--not singling out Schwab.

The odds are slim that OP will be in this situation , and Schwab seems to have fine reputation.

It was the same time frame when I closed my accounts at Schwab. If I recall correctly it was because they started charging fees. When I first started doing business with them, the brick & mortar offices were nice and a reason why I did business with them. I had not been in one of their offices for several years so it no longer was worth the extra cost. I think they scaled back on fees to be more competitive since then.

 

[youbet]

It was the same time frame when I closed my accounts at Schwab. If I recall correctly it was because they started charging fees. When I first started doing business with them, the brick & mortar offices were nice and a reason why I did business with them. I had not been in one of their offices for several years so it no longer was worth the extra cost. I think they scaled back on fees to be more competitive since then.

I've been with Schwab for 20 or 25 years and can't recall any fees. Can you remember any specifics as a heads up so I can be on the lookout for them?

 

[Hermit]

I've been with Schwab for 20 or 25 years and can't recall any fees. Can you remember any specifics as a heads up so I can be on the lookout for them?

I can't remember exactly. I don't move things around unless there is a compelling reason. I just have it in my head that they wanted to start charging me for something and that is when I started comparing costs and moved my accounts to Vanguard. I didn't have a whole lot of money with them so that may have made a difference.

 

[rodi]

If you are assigned to an advisor, they get a percentage of the value of your portfolio (they disclose how much on their website). It's not a high per centage and they are assigned to many people.

"Service Pay compensates a Financial Consultant for building and maintaining relationships with clients in their practice. Each month, they are paid a percentage of the approximate annual revenue attributed to clients in their practice."

There is a table that lays out how much compensation here:
U.S. Branch Representatives

Rita

Thanks for that link, Rita. Looking at it and knowing how I have my money invested and how my sister has her money invested... our common advisor (we both have the same advisor) makes a lot more money off of my sister. LOL. But then again - my sister is in the camp of wanting hand holding, wanting a managed portfolio, etc... But.. the couple hundred our advisor earns off of me - I see that it's worth her while (and part of her job) to call me every 3-6 months. LOL.

 

[youbet]

- my sister is in the camp of wanting hand holding, wanting a managed portfolio, etc...

That seems to be the clue. Schwab certainly offers portfolio managing services (hand holding) and charges for them. But you can also be a complete DIYer. AFAIK, you can open a Schwab account, buy a TSM or S&P 500 index fund and maintain the account paying no more than you would at Vanguard or Fidelity. You do need to not buy other available services to keep the cost equivalent to Vanguard. That is, keep it apples to apples.


I stick with Schwab because DW would require handholding should I predecease her. Our relationship with the Schwab FA and the local office give me a little peace of mind that she could carry on (I've done a folder of instructions) with little effort and without fear of a shark attack. In the meantime, I'm able to use Schwab as a low cost DIY brokerage.

But.. the couple hundred our advisor earns off of me - I see that it's worth her while (and part of her job) to call me every 3-6 months. LOL.

As I mentioned in a post above, your advisor doesn't actually earn compensation "off you." The amount in your account, the services you choose and your activity level go into a formula that determines part of their compensation but that amount isn't deducted from your account. It's a payroll expense just like the other brokerage houses.

 

[Slow But Steady]

As I mentioned in a post above, your advisor doesn't actually earn compensation "off you." The amount in your account, the services you choose and your activity level go into a formula that determines part of their compensation but that amount isn't deducted from your account. It's a payroll expense just like the other brokerage houses.

I think we all understand that "earns off of me" is shorthand for "earns as a result of being the Schwab employee to whom my accounts, which hold mostly index fund, are assigned."

 

[target2019]

Schwab investments by default are not assigned to an advisor, and do not result in advisor fees being paid.

For example, say there is $50K of stock held. The value of the stock is what the market dictates. Dividends are reinvested or go into brokerage sweep account.

 

[Slow But Steady]

Schwab investments by default are not assigned to an advisor, and do not result in advisor fees being paid.

For example, say there is $50K of stock held. The value of the stock is what the market dictates. Dividends are reinvested or go into brokerage sweep account.

I don't know about "by default," but when I log in to my Schwab accounts, there's a link at the very top, slightly to the right of center, that is labeled "My Consultant." I didn't choose the consultant. Schwab chose her, and she reached out to me. I don't pay any fees for the consultant, but I understand that she makes a bit for being assigned to my accounts. She has run some retirement calculations for me, and from time to time she invites me to a talk given by one of her colleagues.

Are you saying that you don't have a "My Consultant" link when you log in to your Schwab accounts?

 

[marinauser]

The "consultant" on the Schwab intro page when you sign in is simply a relationship manager. If I have a problem or a question, that person is a good point of contact and, to me, better that dealing with a 1-800 voice. The office is within blocks of where I live and I can stop in if I need something or want to make a deposit. I have had the same designated person for a number of years. Once in a while we will get invited to an event or a lunch - maybe one a year. Usually once or twice a year she will check in by email to see if we need anything. Otherwise, she doesn't bother me.