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Automated Investment Advice Coming to US

AI is pushing into financial advisory services.  AI is pushing into financial advisory services.

US Brokerage firm Charles Schwab announced on March 13 that it has launched a service which combines automated investment technology with the added benefit of human advisors, in a first of a kind service noting the growth of computer aided tech in the financial industries.

The new service, aptly named “ Schwab Intelligent Advisory” claims to provide customers with a financial and investment plan devised by a joint team of software and humans, according to Reuters.  

The so-called service offers unlimited access to a human advisor via phone or video conference, and an investment portfolio of exchange-traded funds managed by computer algorithms.

The service, for clients with at least $25,000 to invest, includes an online platform that keeps track of financial goals and retirement plans, the San Francisco-based company said in a statement. It will charge a 0.28% fee on assets, with a quarterly maximum of $900.

The service comes less than two months after Betterment LLC, one of the first and largest online wealth managers known as robo-advisers, said it would offer two similar hybrid plans, with minimum investments of $100,000 and $250,000.

Betterment’s move marked a surprising shift toward human advisors. Robo-advisers had focused on automation to capture lower net worth clients regarded as too expensive to service.

The sector prompted established financial institutions to launch similar services, raising concerns about whether small robo-advisers could survive the competition.

Large financial institutions can afford to charge less for robo-advice because they also offer the exchange-traded funds in their automated portfolios.

Schwab, which announced the hybrid service in December, has been one of the most aggressive established brokerages to fight back against robo-advisers. It launched its first robo-advice product two years ago and quickly added clients.

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