Reviewed in: Oct. 2022
Period considered: Aug. - Oct. 2022
The bottom line:
Unpaid non-client promotion
Pros & Cons
No management fee.
Wide ETF selection.
High account minimum.
Large cash allocation.
Tax-loss harvesting only available on balances of $50,000 or more.
Compare to Other Advisors
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Where Schwab Intelligent Portfolios shines
Free management: Schwab’s automated portfolio offering has no management fee, making it one of few that offer its services for free.
Customizable: Schwab also offers customizable portfolios, which are great for folks who want more options than just a pre-made portfolio.
Where Schwab Intelligent Portfolios falls short
High minimum: Many robo-advisors offer a $0 minimum, making Schwab’s $5,000 minimum seem extra high.
Large cash allocation: Schwab keeps a large cash position in its portfolios, meaning that not all of your money is invested.
Schwab Intelligent Portfolios is best for:
Schwab Intelligent Portfolios at a glance
Reviewed: Oct. 2022
Period considered: Aug. - Oct. 2022
Account management fee
Investment expense ratios
0.05% for conservative portfolios and 0.18% for aggressive portfolios.
None, though some ETF operating expenses may apply.
81 different portfolios built from 51 ETFs across 10 different fund families (Schwab and third party), including up to 20 asset classes. Schwab offers Global, U.S. Focused, and Income Focused portfolios with a mix of stocks, bonds, cash, REITs, municipal bonds and preferred stock.
Socially responsible portfolio option
No socially responsible portfolio offered, but clients can exclude up to 3 ETFs.
Accounts have to be held at Charles Schwab & Co.
Tax-loss harvesting is free with a $50,000 minimum balance.
Automatic and free.
Human advisor option
Clients have 24/7 access to professionals with Series 7/63 or 7/66 licenses.
These advisors do not give personalized investment advice.
Savings account/cash management account option
Schwab Bank High Yield Investor Savings account (offered outside of Schwab Intelligent Portfolios) currently offers a 0.28% rate.
Customer support options (includes how easy it is to find key details on the website)
Phone and live chat support 24/7.
More details about Schwab Intelligent Portfolio's ratings
Account minimum: 3 out of 5 stars
One of the downsides to Schwab Intelligent Portfolios is its high minimum: You’ll need $5,000 to get started. Many of Schwab’s competitors have low or no account minimums, which means you don’t need a large chunk of money to start investing.
Account management fee: 5 out of 5 stars
Schwab's base service, Schwab Intelligent Portfolios, charges no management fee. This is rare among robo-advisors, many of whom charge around 0.25% of account balances as an annual fee.
Investment expense ratios: 4 out of 5 stars
Even though Schwab doesn’t charge a management fee, customers still pay the expense ratios on the investments used in their portfolios, and many of those are Schwab funds. The average expense ratio is 0.13%.
Account fees: 5 out of 5 stars
Clients only pay ETF expense ratios (which is true across almost all robo-advisors), but Schwab charges no other fees, which is rare.
Portfolio mix: 4.5 out of 5 stars
Schwab handily delivers on the diversification promise. It draws from 51 exchange-traded funds, or ETFs, which enables it to offer exposure to over 20 asset classes.
Like other automatic advisory services, Schwab cooks up a customized portfolio based on the answers to questions that get at an investor’s goals, time horizon and risk profile. Investors can tweak the allocation in Schwab's recommended model by picking as many as three ETFs to remove and Schwab will replace it with an alternative. For example, if you don’t like the foreign-market ETF chosen for your portfolio, Schwab’s feature lets you punt it from your portfolio in favor of another from the list.
There is no limit to the number of Intelligent Portfolios accounts you can have (so long as there's $5,000 in each account), customizing each with a different goal and strategy.
The biggest criticism of Schwab Intelligent Portfolios’ strategy is that it allocates a good percentage of money to cash — a minimum of 6% all the way up to nearly 22.5% of total portfolio holdings (though Schwab says the average client's cash allocation sits between 6% and 10%), the latter of which makes sense for those at the conservative end of the risk spectrum. But even that may even be too cash-heavy for some investors.
Sitting on do-nothing cash may be good for investors who aren't disciplined about deploying their cash reserves, especially when the market is in a down cycle. But those who have other plans for their cash and who desire a completely invested portfolio service may be turned off by this unavoidable cash allocation.
Socially responsible portfolio options: 3 out of 5 stars
While Schwab does not offer a socially responsible portfolio option, clients can exclude up to three ETFs from their portfolio.
Accounts supported: 4 out of 5 stars
Schwab supports several different types of accounts, some of which are hard to find with a robo-advisor. Schwab has the typical offerings: Individual and joint taxable brokerage accounts and traditional and Roth IRAs, but they also offer SEP, SIMPLE, inherited and rollover IRAs, as well as trusts, UGMA, UTMA, tenants in common and community property.
The variety in Schwab’s account offerings mean you can set up a SIMPLE IRA if you’re a small business and want to create an employee retirement plan, set aside money for heirs with a revocable living trust and create a custodial account for a child.
Tax strategy: 3 out of 5 stars
Tax-loss harvesting is one of the selling points of having a robo-advisor manage your portfolio. It’s a complicated task of selling loser investments in a taxable account to offset taxes on any gains. It's particularly valuable for investors in the higher income tax brackets. The service is only available to clients who opt into the feature and have a minimum of $50,000 in their taxable account. Keep that in mind if it's a must-have feature on your wish list.
» Want to check out other providers? Here are our top picks for best robo-advisors.
Automatic rebalancing: 5 out of 5 stars
With most robo-advisors, your asset allocation (or your portfolio’s percentage of stocks, funds and other investments) is based on your personal information: How close are you to retirement and how much risk do you want to take? If you have 70% of your portfolio in stocks and your stocks perform really well, that allocation may jump up to 75%. If your portfolio falls out of alignment, Schwab will automatically rebalance it for you for free.
Human advisor option: 1 out of 5 stars
Clients have 24/7 access to advisors with Series 7/63 or 7/66 licenses, though these advisors do not give personalized investment advice.
If you’d like access to an advisor who can give you personalized advice, check out Schwab Intelligent Portfolios premium below.
Savings account/cash management options: 2.5 out of 5 stars
Schwab’s savings account offers a low interest rate, unlimited ATM fee rebates around the world, and no monthly service fees or account minimums. Some robo-advisors offer high-yield savings accounts with higher rates.
Customer support options: 4 out of 5 stars
Schwab customers can get phone and live chat support 24/7. You can also visit a Schwab branch and get help in-person.
Schwab Intelligent Portfolios Premium
Schwab Intelligent Portfolios Premium is the company's hybrid advisor that offers the same portfolio options as the free service, alongside unlimited access to certified financial planners. Premium requires a balance of $25,000 and costs $30 a month (billed as $90 quarterly) plus a one-time $300 planning fee. Schwab is the only online advisor we review that charges an upfront fee, which should be factored in when you compare the cost of services
Like most flat fees, Schwab's pricing is ideal for investors with higher balances. For example, when $30 a month is expressed as an annual percentage of assets, with a $25,000 account balance (the minimum you can have), you’ll pay 1.44%. But if you have a $200,000 balance, that fee drops to 0.18%-- which is even cheaper than the 0.25% industry standard for a more basic robo-advisor service. But when you factor in the $300 one-time planning fee, that $25,000 balance has a much higher 2.64% fee for the first year, and the $200,000 balance lands at 0.33%.
For context, compare these numbers with the 0.30% charged by Vanguard Personal Advisor Services and the 0.40% fee for Betterment Premium — Betterment's hybrid offering that also offers unlimited calls and emails to a team of CFPs.
Schwab Intelligent Portfolios Premium clients get access to a team of CFPs, receive a financial plan and get access to interactive planning tools. While the service doesn't initially pair clients with a dedicated advisor, clients can request to work with the same advisor. Clients can get guidance for any life milestone including buying a home to having a child, college savings, retirement, income and budgeting.
The portfolios are the same as the free offering, but they are robust and include up to 20 asset classes.
» Want to compare options? Check out our roundup of the best wealth advisors
Schwab Intelligent Portfolios Premium at a glance
Reviewed: Oct. 2022
Period considered: Aug. - Oct. 2022
Account management, planning or subscription fee
$30 monthly subscription fee.
Setup or onboarding fee
One-time $300 planning fee.
Advisor access and credentials
Unlimited access to a team of advisors (clients can request to work with the same advisor). All advisors are CFPs and are available by phone and video conference Monday through Saturday with day and evening availability.
Financial planning services
Comprehensive financial plan that provides a customized roadmap for reaching financial goals Guidance for planning around any life milestone from buying a home to having a child, college savings, retirement, income, budgeting, etc.
Managed assets must be held at Schwab. Outside assets may be considered for planning purposes but would not receive investment advice until custodied at Schwab.
Individual and joint taxable brokerage accounts.
IRAs (traditional, Roth, Rollovers, Inherited, SEP and SIMPLE).
Tenants in Common, Community Property, Custodial, Revocable Living Trust, Designated Beneficiary.
Is Schwab Intelligent Portfolios right for you?
Schwab Intelligent Portfolios has all the characteristics of an ideal robo-advisor: The company has a strong reputation, its portfolios feature low-cost ETFs and offers all this with an ongoing $0 management fee. We’re not fans of the high cash allocation, especially for younger investors. We would also like to see tax-loss harvesting made available for any customers with taxable accounts, not just those with $50,000 or more. But if you’re looking for a robo-advisor, it’s hard to beat one that’s free.
As for Schwab Intelligent Portfolios Premium, between the $30 per month ongoing cost and the $300 one-time planning fee, Schwab’s upper tier option is pricier than many of its competitors, and potential customers should consider premium when their balance is around $125,000 and the $30 per month advisory charge equates to a more competitive 0.29% fee.
How do we review financial advisors?
NerdWallet’s comprehensive review process evaluates and ranks companies that provide financial planning services online or connect users to a financial advisor. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgments on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.
We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across 14 factors. The final output produces star ratings from poor (one star) to excellent (five stars).
For more details about the categories considered when rating brokers and our process, read our full methodology.