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the digitisation of services.
Schwab Intelligent Advisor
Schwab’s recent entry into the robo advisor domain makes a splash on account
of its model that is free. This platform guarantees no advisory fees, account
service fees or commissions. Schwab Intelligent Portfolios calls itself an
“on-line investment advisory service that rebalances your portfolio, and
assembles, monitors -so you don’t have to.” Similar to Betterment, Schwab is
aims- established and helps you keep on top of your savings and income
Schwab requires at least $5,000 to open an Intelligent Portfolios account.
That is the highest minimum prerequisite for each of the robo-advisor
discussed in this article.
The first 12 question query form gives Schwab the advice to design your
portfolio. Although their ETF portfolio allows for up to 20 asset categories,
your individual account may not contain each of their offerings. Schwab has
the broadest asset classes and investment options of any of the former
advisers that are automated and includes property, fixed income, stock, and
commodity ETFs. Where Schwab differs is in the allocation to cash. Each
Intelligent Portfolio has a percentage invested in cash. Schwab clarifies that
cash is not unimportant to some well-diversified portfolio and enhances
stability, liquidity, diversification, and protects against possible
Schwab can afford to offer a no-fee service because they’ll get earnings on
the consumers’ investments their ‘Schwab- money market funds’ and branded ETFs.
Additionally they may be compensated by the firms which make the trades. As
with all of the companies, there are annual management fees for the underlying
ETFs. According to Schwab, “ETFs offered by other online advisors have
operating expense ratios in ranges similar to that of Schwab Intelligent
Portfolios.” The total operating expense ratio of a typical portfolio will
range from 0.12% for a conservative portfolio for 0.25% AUM for the more
Schwab’s services include the typical automatic rebalancing. Eligible for the
automatic tax loss harvesting .
In accordance with the criteria of low fees, diverse index fund offerings, and
robust services, the best robo advisor for 2016 goes to SigFig. SigFig offers
the most extensive collection of services, including an online private adviser
for accounts greater than $10,000. Their app is state of the art and the
portfolio corrector is powerful. That said, it’s a rough contest to call the
winner of the ‘best robo advisor’ because it is important to think about your
own personal situation. If you will want platform which holds your assets
within their custody, then certainly one of the other robos might be a better
fit for you.