Schwab Intelligent Portfolios offers a flexible, low-cost robo-advisor option for investors with at least $5,000 to invest. Although the minimum is higher than some other robo-advisors, the lack of advisory fees and user-friendly platform make Schwab Intelligent Portfolios an attractive option for new investors. The robo-advisor offers several types of accounts to choose from to best meet your financial goals. This review and our rating focus on the standard offering, but some attributes of the premium product will also be discussed.
Investors with an initial investment of $25,000 or more will be able to access the next-level option, Schwab Intelligent Portfolios Premium. The premium offering comes with one-on-one advice at a relatively low price, although there is a $300 setup fee and $30 monthly advisory fee for unlimited advice from a Certified Financial Planner. Both programs also require the investor to hold 6% to 30% in cash, which is a relatively high cash balance that can possibly affect the overall growth potential of your investment portfolio.
Aside from this Charles Schwab Intelligent Portfolios robo-advisor review, we've also reviewed Charles Schwab's traditional brokerage services.
- Schwab Intelligent Portfolios allows investors to customize their portfolios in a variety of ways by selecting specific investing goals including retirement, college, vacations, building long-term wealth, and creating a sustainable income stream.
- Schwab Intelligent Portfolios offers a variety of account types, including traditional individual retirement accounts (IRAs), Roth IRAs, simplified employee pension plans (SEP-IRAs), SIMPLE IRAs, revocable living trusts, and general brokerage accounts.
- While Schwab’s own low-cost funds are recommended by the automated platform, and these funds and relatively high cash balances do generate some income for Schwab in the form of fees, clients can also choose ETFs from other providers.
- Schwab Intelligent Portfolios has human customer support agents available.
Quick and easy account setup
No advisory or commission fees
Highly customizable investing options
Automatic account rebalancing
24/7 live, US-based customer support
Relatively high account minimum
Tax-loss harvesting only offered in accounts with assets totaling at least $50,000
Portfolio not revealed until account is funded
Requires a higher-than-average cash balance
|Fees||$0 in advisory fees or commissions|
|Goal Planning||Retirement, college, vacations, building long-term wealth, or creating a sustainable income stream|
|Available Assets||Exchange Traded Funds, internal and external|
|Interest Paid on Cash Balances||Yes, currently 0.34%|
|View Portfolio before Funding||No|
|Customer Service||Yes, 24/7 live, US-based service professionals available|
|Financial Advisor Available||Yes, on Premium accounts (additional charge)|
|Cash Management||FDIC insured deposit at Schwab Bank|
|Tax-Loss Harvesting||Yes, for accounts over $50,000|
|External Account Sync/Consolidation||Yes|
Opening a Schwab Intelligent Portfolios account is quick and easy. The website will walk you through 12 questions regarding your investment goals, risk tolerance, and timeline to help tailor the portfolio. Intelligent Portfolios builds a targeted and customized portfolio for each client using over 80 portfolio variations. What you see at the end of the questionnaire is the suggested portfolio allocation and ETF breakdown based on your initial questionnaire responses, but you will need to open and fund an account to see the actual ETFs that will make up those allocations. The minimum investment to open an account and get started is $5,000.
Schwab Intelligent Portfolios also has an interactive tool that allows potential clients to run scenarios based on historical performance, to get an idea of what their investing outcomes may look like. You are able to see a potential asset allocation mix and historical portfolio performance. These scenarios are based on two factors: investment strategy and risk profile.
During the account setup process, you are also prompted to accept electronic delivery of records and disclosures. It is important to maintain an up-to-date email address on an on-going basis to continue receiving correspondence in this way, or the account will be terminated. When setting up an account, potential clients can call or chat online with a representative 24/7.
Schwab Intelligent Portfolios allows clients to customize investing goals in areas such as:
- Buying a home
- Building long-term wealth
- Creating a sustainable income stream
Schwab regularly reviews the Intelligent Portfolios and monitors the investments that have been chosen to ensure that they are continuing to be the best investment vehicles to help you reach your financial goals. Schwab allows you to run scenarios using its interactive tool to see what impact changes in the market, contribution rates, and other underlying assumptions will have on the likelihood of you achieving your goals. While this feature is useful and appreciated, some investors may be looking for more guidance and recommendations to help ensure they succeed.
Schwab Intelligent Portfolios basic offering assumes you are comfortable stress testing your own plans and making your own adjustments. Premium customers with $25,000 or more to invest can access a Certified Financial Planner for help on a one-time ($300) or ongoing basis ($30 per month).
Intelligent Portfolios is a solid investment planning service that allows you a fair amount of flexibility in choosing appropriate investment goals. To achieve these goals, customers can choose from an assortment of account types, including:
- Traditional Individual Retirement Account (IRA)
- Roth IRA
- Simplified Employee Pension plan (SEP-IRA)
- SIMPLE IRA
- Revocable Living Trust
- Taxable brokerage accounts: individual, joint with rights of survivorship, tenants in common, community property, custodial
Schwab Intelligent Portfolios does not currently offer any traditional banking services, such as checking, credit, or debit cards. However, it is easy to set up an additional Schwab account to gain access to checking or debit cards.
You receive interest from cash in your account through a sweep into an FDIC-insured Schwab bank account. Cash held currently earns an Annual Percentage Yield (APY) of 0.34%. It is also easy to transfer money into your account from an external account. Deposits can be made as individual transactions or you can choose to set up automatic deposits on a recurring basis.
One differentiating factor regarding the cash management with Schwab Intelligent Portfolios is that the investor is required to hold between 6% and 30% in Cash Allocation to the Sweep Program, which is a relatively high percentage compared to the competition.
Taking cash out of your Schwab Intelligent Portfolios account is simple as well. If the amount you are wanting to take out is less than the current amount of cash in your portfolio, you can transfer it to another Schwab account immediately or to a linked external account overnight. If, however, you need to withdraw more cash than is currently in your account, ETFs will automatically be sold to generate the requested amount of cash. The processing and settlement for this transaction takes between 4-6 business days. This type of account currently does not support the ability for a client to borrow on the margin.
Your individualized portfolio is constructed based on your answers to the questions that were answered during account setup regarding investment goals, risk tolerance, and time horizon. Based on your answers to these questions, Schwab Intelligent Portfolios composes portfolio allocations customized for you. The actual ETF selection isn’t shared until you have funded the account, but it will be comprised of ETFs from up to 20 asset classes, including:
- Fixed income
- Real estate
|Socially Responsible or ESG Options||No|
|Collective Investment Trusts||No|
While you cannot choose individual investments, Schwab Intelligent Portfolios offers a comprehensive array of several investments within both internal and external ETFs to meet client investing goals, with asset classes including:
- U.S. Large and Small Company Stocks
- International Developed Large and Small Company Stocks
- International Emerging Markets Stocks
- U.S. and International Exchange-Traded REITs
- U.S. and International High Dividend Stocks
- U.S. Treasuries
- U.S. Investment Grade Corporate Bonds
- U.S. Securitized Bonds
- U.S. Inflation Protected Bonds
- U.S. Corporate High Yield Bonds
- International Developed Country and Emerging Markets Bonds
- Preferred Securities
- Bank Loans
- Investment Grade Municipal Bonds
- Gold and Other Precious Metals
- FDIC-insured Cash
At this time, there are no socially responsible, environmental, or governance options available. However, the client does have the option to exclude up to three of the ETFs if they do not want them as part of their portfolio. It is important to note that Schwab’s algorithm will suggest a fair number of Schwab ETFs as long as they meet the criteria, which includes being fee competitive.
Schwab Intelligent Portfolios performs well when it comes to portfolio management. The robo-advisor uses both technology and human supervision to automatically monitor your portfolio on a daily basis and rebalance as needed. That means that your account will periodically be rebalanced so that none of the investments in your portfolio get too far out of line with your goals.
When it comes to tax-loss harvesting, however, Schwab is behind some of its competitors. Tax-loss harvesting is only available for clients with an account balance of at least $50,000, and you must enroll to receive this service.
Schwab Intelligent Income is an interesting option for investors when it comes to transitioning a retirement portfolio, for example. Schwab Intelligent Income allows you to set up recurring withdrawals from your account to provide a steady income stream on a monthly basis. Withdrawal amount, frequency, or where you want the money transferred can be updated at any time.
|Reporting Features||Goal Tracker, Schwab Intelligent Income|
|Tax Loss Harvesting||Yes, with conditions|
|External Account Syncing/Consolidation||Yes|
Intelligent Portfolios is set up entirely online and clients must accept electronic delivery of records and disclosures, as well as sign for them electronically. An up-to-date email address must be maintained to receive on-going correspondence, since failure to do so may cause your account to be terminated.
Investors are able to view their account performance in a tab-based environment. If the investor has more than one Schwab account, they can view the summary on the main dashboard, select an account, and view details for each account.
The website is very user friendly. While account navigation is not customizable, it is set up to provide easy access to the information that investors need, including current account balance, history, transactions, goals, and more.
Schwab also has a mobile app to make keeping up with your Intelligent Portfolios account easy, even on the go. Account access and options are basically the same whether the investor is logging in via desktop or mobile, with the only notable difference between platforms being in the area of profile updates.
While you can do most everything in your online account on your own, Schwab offers a number of convenient ways to talk with a representative if you have any questions, including:
- Talk to a Schwab investment professional 24/7 via phone.
- 24/7 Online Chat for prospective and current clients offered as a pop-up chat box on the website.
- In-person consultation at any of Charles Schwab’s local branch offices across the country.
Schwab offers several layers of security so you can rest easy, knowing that your private and personal information is being protected. Here are some of the key security protocols that are in place:
- Risk-based security technology
- Automated alerts
- Identity verification
- Rigorous monitoring
There are also several security measures that Schwab recommends to further protect client accounts and personal information, including:
- Setting up security alerts
- Enrolling in advanced authentication
- Signing up for voice ID
Schwab Intelligent Portfolios website offers several informative resources on their Investing Insights webpage. There is a wide selection of articles, videos, whitepapers, and webcasts that provide information to clients on investing and how the Intelligent Portfolios robo-advisor works. Schwab Intelligent Portfolios customers can also access the considerable trove of educational materials compiled by Charles Schwab, the online brokerage. This includes podcasts, research, and much more.
One of the best features of Intelligent Portfolios compared to other robo-advisors is that there are no advisory fees at all. You only pay the typical fees that are associated with the exchange traded funds (ETFs), which range from 0.03% to 0.18%, with an average of 0.11%. However, this basic service does not come with on-going advice from a financial advisor.
If you’d like to upgrade your account, though, to receive unlimited advice from a Certified Financial Planner professional, you can opt to enroll in the Intelligent Portfolios Premium account, provided you meet the criteria.
|Annual Gross Advisory fee for $5,000 account||$0|
|Annual Gross Advisory fee for $25,000 account||$0 ($30/mo for Premium plus $300 setup fee)|
|Annual Gross Advisory fee for $100,000 account||$0 ($30/mo for Premium plus $300 setup fee)|
|Expense ratios||0.03% to 0.18%, with an average of 0.11%.|
Schwab Intelligent Portfolios is a solid robo advisor that is somewhat hampered by a high account minimum, limited goal planning support, and high cash allocation levels. While Schwab Intelligent Portfolios assets are limited to only ETFs, they do offer an extensive list of internal and external funds that reflect a variety of underlying asset classes. The Intelligent Portfolios Premium account is also a nice option for investors with a higher account balance and a desire for investment advice for an affordable low monthly fee. Schwab also gets credit for a user-friendly website and a relatively painless onboarding process.
All that being said, Schwab’s robo advisor is essentially no-cost in that you will only be paying the regular ETF-related management expense ratios rather than anything for the portfolio allocation and rebalancing functions. If you are looking for more in terms of customization, tax-loss harvesting, and goal planning support, it will likely come with some type of account fee. If you can do without these items, then Schwab has automated investing services at a very attractive price point.
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- Charles Schwab. "Schwab Intelligent Portfolios Sweep Program."