Schwab preps robo offering

CEO Walt Bettinger says firm working on 'groundbreaking' introduction of online advice

Jul 25, 2014 @ 1:23 pm

By Mason Braswell

robo adviser, charles schwab, bettinger
+ Zoom

Charles Schwab Corp. is kicking the tires on an online advice offering, the firm's chief executive, Walt Bettinger, said Friday, teasing it as a platform that would be “groundbreaking” for the firm.

“We are fast at work on what we believe will be a groundbreaking and market impacting introduction of an online advisory solution,” he said.

He declined to offer more details or a timeframe for the offering. Asked whether the firm was working on its own software or planned to make an acquisition of an existing offering, Mr. Bettinger said he was not ready to make a full announcement.

It was also not clear how the platform would be deployed, but it could be a boon for the firm's 1,100 financial advisers as well as the registered investment advisers on the Schwab platform who could benefit from being able to capture the growth in with the low-cost, automated investing offerings.

While still representing only a small fraction of the market, online advice platforms, such as Wealthfront Inc. or Covestor Ltd., have grown by offering automated investment and asset allocation for a low fee, around 25 to 35 basis points.

Automated online investment platforms hold approximately $15.7 billion in assets under management, according to a recent survey from Corporate Insight analyst Grant Easterbrook.

Consultants have touted the potential benefits for advisers who partner with online solutions like Wealthfront or Betterment. Around 31% of registered investment adviser and broker-dealer executives polled in an informal Fidelity Institutional survey said that they planned to incorporate an online model into the existing business .

HighTower's chief executive made similar remarks in May in an interview with InvestmentNews, saying the firm was exploring adding online advice as a fourth leg of the firm's hybrid investment advisory and brokerage platforms.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Latest news & opinion

Wells Fargo's move to boost signing bonuses could give it a lift

Wirehouse is seen as trying to shore up adviser ranks that took a hit after banking scandal

New Jersey fines David Lerner Associates for nontraded REIT sales

Firm will pay $650,000 for suitability, compliance and books and records violations.

Report predicts $400 trillion retirement savings gap by 2050

Shortfall driven by longer life spans and disappointing investment returns.

Wells Fargo will ramp up spending to lure brokers

Wirehouse, after losing 400 brokers in first quarter, is bucking trend among rivals who have said they are going to cut back on spending big bucks recruiting veteran advisers

DOL fiduciary rule pushes indexed annuity carriers to develop new products

Insurers are introducing fixed-rate deferred annuities with income guarantees to circumvent BICE.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print