A Charles Schwab office is shown in Los Angeles, California January 29, 2016. REUTERS/Mike Blake
NEW YORK (Reuters) - Brokerage Charles Schwab Corp on Tuesday launched a service that combines its automated investment management technology with human advisors, as financial institutions race to offer digital financial advice.
The service, called Schwab Intelligent Advisory, provides clients with a financial and investment plan, unlimited access to a human advisor via phone or video conference, and an investment portfolio of exchange-traded funds managed by computer algorithms.
The service, for clients with at least $25,000 to invest, includes an online platform that keeps track of financial goals and retirement plans, the San Francisco-based company said in a statement. It will charge a 0.28 percent fee on assets, with a quarterly maximum of $900.
The service comes less than two months after Betterment LLC, one of the first and largest online wealth managers known as rob-advisers, said it would offer two similar hybrid plans, with minimum investments of $100,000 and $250,000.
Betterment's move marked a surprising shift toward human advisors. Rob-advisers had focused on automation to capture lower net worth clients regarded as too expensive to service.
The sector prompted established financial institutions to launch similar services, raising concerns about whether small rob-advisers could survive the competition.
Large financial institutions can afford to charge less for rob-advice because they also offer the exchange-traded funds in their automated portfolios.
Schwab, which announced the hybrid service in December, has been one of the most aggressive established brokerages to fight back against rob-advisers. It launched its first rob-advice product two years ago and quickly added clients.
The service, called Schwab Intelligent Advisory, provides clients with a financial and investment plan, unlimited access to a human advisor via phone or video conference, and an investment portfolio of exchange-traded funds managed by computer algorithms.
The service, for clients with at least $25,000 to invest, includes an online platform that keeps track of financial goals and retirement plans, the San Francisco-based company said in a statement. It will charge a 0.28 percent fee on assets, with a quarterly maximum of $900.
The service comes less than two months after Betterment LLC, one of the first and largest online wealth managers known as rob-advisers, said it would offer two similar hybrid plans, with minimum investments of $100,000 and $250,000.
Betterment's move marked a surprising shift toward human advisors. Rob-advisers had focused on automation to capture lower net worth clients regarded as too expensive to service.
The sector prompted established financial institutions to launch similar services, raising concerns about whether small rob-advisers could survive the competition.
Large financial institutions can afford to charge less for rob-advice because they also offer the exchange-traded funds in their automated portfolios.
Schwab, which announced the hybrid service in December, has been one of the most aggressive established brokerages to fight back against rob-advisers. It launched its first rob-advice product two years ago and quickly added clients.
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