Exclusive: Schwab robo-adviser crosses half-billion dollar mark

Exclusive: Schwab robo-adviser crosses half-billion dollar mark
Retail investors respond in large numbers to the Intelligent Portfolios offering.
JUN 23, 2015
The Charles Schwab & Co. robo-adviser has crossed a symbolic threshold in just three weeks, raising more than half a billion dollars, the San Francisco-based firm told InvestmentNews on Monday. Schwab spokeswoman Alison Wertheim said the Intelligent Portfolios program has raised “considerably over” $500 million in assets. The platform formally launched to significant fanfare March 9. Marketing for the program since then has included advertisements in New York City subway stations and television spots during the NCAA college-basketball tournament, to name a few. (More: Schwab 'robo-adviser' bets big on cash and 'smart' beta) Schwab has said a “white-label” version of Intelligent Portfolios will be launched during the second quarter this year. “The responses we are receiving from advisers indicates significant interest on their part,” Ms. Wertheim said. Ms. Wertheim declined to comment on how many of the assets came from existing clients. “It’s pretty phenomenal,” said Matthew Fronczke, director of product consulting and research at kasina. “The $500 million, no matter where it’s coming from, shows that, at least at the onset, the market is looking at this as a solution.” Mr. Fronczke, whose consultancy has not worked on Intelligent Portfolios or on competitors’ platforms, said it took other robo-advisers years to raise the same amount of money as Schwab did in weeks. But he said that Schwab would not have entered the marketplace as quickly or competitively if not for firms such as Betterment and Wealthfront. Meantime, some advisers have questioned Schwab's use of mandatory allocations to cash in the program. Intelligent Portfolios places investors into a portfolio of index-tracking exchange-traded funds and cash. It does not charge a management fee on top of the underlying investments for retail investors.

Latest News

iCapital secures $820M in latest funding, hits $7.5B
iCapital secures $820M in latest funding, hits $7.5B

The giant alt investments platform's latest financing led by T. Rowe Price and SurgoCap Partners, along with State Street, UBS, and BNY, will fuel additional growth on multiple fronts.

Merrill Lynch on the hook for $3.7M after clients claimed sale of unsuitable private equity
Merrill Lynch on the hook for $3.7M after clients claimed sale of unsuitable private equity

Some investors recently have seen million dollar plus decisions by FINRA arbitration panels involving complex products decisions go their way.

What does it take to feel ‘financially comfortable’ or ‘wealthy’ in 2025?
What does it take to feel ‘financially comfortable’ or ‘wealthy’ in 2025?

New report shines a light on how Americans view wealth today.

Retirement delays, Social Security fears prompt advisors to rethink income strategies
Retirement delays, Social Security fears prompt advisors to rethink income strategies

Concerns about outliving savings and healthcare costs are reshaping how "Peak 65" Americans and advisors approach income planning.

Barred ex-Merrill Lynch advisor arrested in alleged $2.6M theft of former Miami Dolphin Pro Bowler
Barred ex-Merrill Lynch advisor arrested in alleged $2.6M theft of former Miami Dolphin Pro Bowler

Former advisor Isaiah Williams allegedly used the stolen funds from ex-Dolphins defensive safety Reshad Jones for numerous personal expenses, according to police and court records.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.