Schwab looks beyond boomers

Charles Schwab Investment Management has lowered its minimum initial investment in mutual funds to $100 as part of a sweeping effort to capture younger investors. “This is part of an overall effort to make sure we’re accessible to the next generation of investors and building the future of the firm,” said Glen Mathison, spokesman for The Charles Schwab Corp. of San Francisco. The effort includes opening accounts with as little as $100 for investors who promise to invest $100 or more monthly or as low as a zero initial balance for investors who open a Schwab checking account. Yet money market funds and Laudus-branded funds at Schwab will retain the old minimums which range from $1,000 to $2,500. Schwab is able to make this offer now because it has reduced its cost structure over the past few years, Mr. Mathison added. But one analyst asked whether heightened administrative costs of having the smaller-balance investors might not raise overall expenses in the funds. “If it does, we’re not raising our operating expense ratio so there no change” from the consumer’s standpoint, he added.