Advertiser Disclosure

Investing

Schwab Intelligent Portfolios Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Charles Schwab’s robo-advisor offering Schwab Intelligent Portfolios builds investment portfolios from a range of low-cost ETFs, charges zero advisory fees and gives clients access to hundreds of local branches and excellent customer service.

Schwab Intelligent Portfolios is not a service for beginner investors. You’ll need a minimum investment of $5,000 to get started, and the platform doesn’t offer tax-loss harvesting until your portfolio tops $50,000. Schwab Intelligent Portfolios also requires you to keep a portion of your portfolio in cash, which could be a disadvantage for some investors.

Schwab Intelligent Portfolios
Visit SchwabSecuredon Schwab Intelligent Portfolios ’s secure site
The Bottom Line: Schwab Intelligent Portfolios is an all-around great robo-advisor option for conservative investors, as long as you meet minimum investing requirements.

  • The minimum deposit to open an account is $5,000.
  • There are no advisory fees and no fees for automatic portfolio rebalancing.
  • There are no fees for tax-loss harvesting, but you’ll need a balance of at least $50,000 to unlock this valuable feature.y

Who should consider Schwab Intelligent Portfolios?

If you have at least $5,000 to invest, but you don’t have the time or inclination to build your own portfolio, Schwab Intelligent Portfolios could be a good option for you.

After answering 12 questions about your goals, risk tolerance, comfort with market fluctuations and time horizon, you’ll be presented with a suggested investment portfolio. If you wish to be more or less aggressive than the proposed mix, you can tweak your answers — but you can’t tweak the underlying investment choices.

That said, you probably wouldn’t want to: Schwab Intelligent Portfolios builds your portfolio from a mix of low-cost ETFs across up to 20 asset classes. That’s more diversification than you might see at other robos. The platform monitors your portfolio and automatically rebalances when your asset allocation drifts too far from your target percentages.

Schwab Intelligent Portfolios does not charge any advisory fees — the only expenses you’ll pay are from the underlying investments, which are low. Help is available 24/7 from a customer service line, or you can visit one of the more than 365 branches for face-to-face assistance. There’s also a full-featured online website and mobile apps for iOS and Android.

Schwab Intelligent Portfolios has a solid setup, but it may be a better fit for more conservative investors because it keeps a mandatory percentage in cash. Even for portfolios with a 40-year time horizon, the robo keeps a chunk of your investment in cash, which could lessen your earnings over time.

Schwab Intelligent Portfolios fees and features

Amount minimum to open account
  • $5,000
Management fees
  • 0%; Schwab allocates a minimum 6% of the portfolio to cash, maximum 29%
  • 0.28%
Account fees (annual, transfer, inactivity)
  • $0 annual fee
  • $25 full account transfer fee
  • $50 partial account transfer fee
  • $0 inactivity fee
Account types
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • Joint taxable
  • Rollover IRA
  • Custodial Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
  • SEP IRA
  • SIMPLE IRA (Savings Incentive Match Plan for Employees)
  • Trust
Portfolio
  • Portfolios may contain up to 20 asset classes.
Automatic rebalancing
Tax loss harvesting
Offers fractional shares
Ease of use
Mobile appiOS, Android
Customer supportPhone, 24/7 live support, Chat, 365 branch locations

How does Schwab Intelligent Portfolios invest your money?

Based on your answers to Schwab’s questions, the robo creates a diversified portfolio for you by picking from 53 low-cost ETFs that have been “hand-picked” by the company’s professionals. The criteria used to select these ETFs includes their low expense ratios, trading characteristics, exposure to broad asset classes and close tracking to their targeted index. The average annual expense ratios range from 0.05% to 0.19%, and these are the only costs to consumers, since there are no advisory or trading fees.

Once your portfolio has been created and funded, the robo monitors your investment mix and automatically rebalances it when your assets shift away from your target range. The robo doesn’t offer tax-loss harvesting until you have invested assets of $50,000 or more in your account.

Each asset class in Schwab Intelligent Portfolios has both a primary and secondary ETF. For example, for U.S. Large Company stocks, Schwab Intelligent Portfolio lists a representative primary ETF of Schwab U.S. Large-Cap, and a secondary ETF of Vanguard S&P 500.

Although many of the ETFs in the representative list of funds are Schwab’s own, the list also includes investments from Vanguard, Invesco, iShares and Xtrackers, among others. The representative fund list pulls from 27 asset classes, including various stocks, bonds, REITS, preferred securities and gold and other precious metals.

What is Schwab Intelligent Portfolios Premium?

If you have at least $25,000 to invest, you qualify for Schwab Intelligent Portfolios Premium. This service includes all the benefits of the standard version, plus unlimited one-to-one help from a certified financial planner.

You’ll receive not only a personalized action plan and portfolio review with a professional but also a digital financial plan for reaching your goals. You’ll also have access to the site’s interactive planning tools, the ability to link and view your accounts at other institutions and tools you can use to stress-test your plan and see how likely you are to hit your targets.

This service requires a one-time planning fee of $300 and an ongoing $30/month advising fee. That’s a little steep for financial planning services if you have just $25,000 in your portfolio, but for larger balances, it’s a steal. (The average RIA fee now sits at about 1.17%.)

Schwab Intelligent Portfolios cash allocation

Schwab believes cash investments have an important role in a well-diversified portfolio. That belief is represented by a cash allocation of 6% to 30% in their accounts, depending on the client’s investment strategy. This is accomplished through Schwab’s Sweep Program, which sweeps free credit balances in your brokerage accounts to deposit accounts at Schwab Bank.

Although Schwab pays an interest rate on cash balances,currently 0.30% APY, the rate is lower than what you’d typically hope to earn in an investment account. And with up to 30% of your portfolio invested in cash, you stand to lose out on some significant earnings potential.

For example, say that 6% of your $100,000 portfolio is in cash and earning 0.30% APY. If a diversified stock portfolio goes up 10% in a year, you’re potentially leaving $582 in lost earnings on the table. If 15% of your portfolio is in cash, your lost potential earnings go up to $1,455 in a year. In other words, a mandated cash investment percentage could be a major drawback.

Strengths of Schwab Intelligent Portfolios

  • Opening an account is easy: Answer a dozen questions about your goals, and Schwab Intelligent Portfolios recommends a portfolio that’s right for you. You can also choose from many types of accounts, including individual accounts, joint accounts, custodial accounts and trust accounts. You can also open a taxable account or a retirement account, including a traditional or Roth IRA, or a Simple or SEP IRA if you’re self-employed or a small business owner.
  • Low cost: Schwab Intelligent Portfolios charges zero advisory fees for all accounts, no matter what the total balance. Many competitors, including Wealthfront and Betterment, charge 0.25% or more.
  • Schwab rebalances automatically: Schwab Intelligent Portfolios will monitor your portfolio over time and rebalance automatically whenever your allocation wanders from your target percentages.
  • Customer service is top-notch: There are more than 365 local branches and 24/7 phone support and online chats. You’ll quickly connect with a representative willing to answer questions.
  • Retirement income planning: You’ll receive guidance on the best strategies for withdrawing your money in retirement, including suggestions on how much you can safely take out without adversely affecting your investment positions.

Drawbacks of Schwab Intelligent Portfolios

  • You’ll need a minimum of $5,000 to open an account: This is higher than most competitors — E-Trade and Wealthfront require $500 to open an account, and Betterment has no minimum balance requirement.
  • Tax loss harvesting is available only on accounts with $50,000 or more: While competitors such as Wealthfront offer tax-loss harvesting for all taxable accounts. Tax-loss harvesting involves selling some losing investments at strategic times to minimize taxes you might have to pay on investment gains made in taxable accounts.
  • There are significant cash holdings: In all of the suggested portfolios, 6% to 30% of the balance will be held in cash. Although Schwab Intelligent Portfolios pays interest on the money, it’s a conservative investment stance, and investors who wish to be more aggressive may be better off at another robo-advisor.

Is Schwab Intelligent Portfolios Safe?

With investing, there’s always a chance your investments could decrease in value. However, Charles Schwab is a trusted, well-established brokerage firm that FINRA BrokerCheck confirms is in full compliance with all regulatory requirements. Plus, it’s a member of the FDIC and SIPC, which insure cash in your bank or brokerage accounts.

Charles Schwab also has strong data protection policies to keep customer information secure, although Charles Schwab does share your personal information with affiliates so they can market to you.

Is Schwab Intelligent Portfolios right for me?

Schwab Intelligent Portfolios is a key player in the robo-advisor industry. If you have enough money to open an account and you don’t mind not having access to tax-loss harvesting until your account balance reaches $50,000, this robo-advisor may be an ideal choice. That said, you should also be comfortable holding a portion of your portfolio in cash, so Schwab Intelligent Portfolios may be a better choice for more conservative investors.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Advertiser Disclosure

Investing

Large-Cap vs. Small-Cap Stocks: What’s Your Risk Appetite?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Investing professionals use the terms large-cap stock and small-cap stock to refer to larger and smaller companies. The “cap” in both terms refers to market capitalization, or the total market value of a firm’s shares.

Market capitalization is calculated by multiplying the number of a firm’s shares by the price of the shares. When comparing small-cap and large-cap stocks, it’s important to understand that they differ on more than just size or market cap — they also offer different levels of risks and returns.

What are small-cap stocks?

Small-cap stocks are generally considered to be shares of companies with a market capitalization between $300 million and $2 billion. Strict definitions aside, some people stretch that range to include companies with larger market capitalizations.

“Some will say, ‘We consider anything up to $5 billion to be a small cap,’” said Kashif Ahmed, a certified financial planner in Bedford, Mass. “But most people will tell you it’s generally $2 billion or less.”

Many small-cap stocks are penny stocks, meaning their shares are priced under $5. These smaller companies ostensibly have more room to grow, giving shareholders the opportunity to realize substantial gains on these investments. Conversely, they can lose value very quickly, and small-cap stock volatility reflects this dichotomy. As a result, small-cap penny stocks are considered highly risky investments.

When he’s trying to explain small-cap stocks to a client, certified financial planner Michael Yoder will often show them a list of the top 25 holdings in a small-cap index and ask them how many names they recognize. “The two that get recognized the most are DocuSign and Fair Isaac,” said Yoder, who works in Walnut Creek, Calif.

Small-cap stocks are more volatile

Since small-cap stocks are shares of smaller companies, their stock prices tend to swing more widely. The Russell 2000 — an index that tracks 2,000 small-cap stocks — has proven to be significantly more volatile than the S&P 500, which tracks 500 large-cap companies.

“Over the last 10 years, small caps have been 42% riskier,” Yoder said. “To be specific, ETFs that track the Russell 2000 index have been 42% more volatile over the past 10 years than ETFs that track the S&P 500.”

Although small caps are a chancier venture, there’s also the potential for great performance. Small caps have historically outperformed large-cap stocks. There’s greater room for growth and opportunities to get in on the ground floor, so to speak, at a company that soars in later years.

And not all small-cap companies are startup companies taking risky bets. A small-cap company could just as easily be a company that makes light bulbs. “And everybody needs to buy light bulbs,” Ahmed said.

Small-cap stock features

  • Market capitalization of $300 million to $2 billion
  • Stocks are more volatile
  • Outperform large-cap stocks over the long term
  • Tend toward more aggressive growth strategies
  • Smaller percentage of them pay dividends

What are large-cap stocks?

Most people define large-cap stocks as shares of companies with a market capitalization of $10 billion or more. Large-cap stocks are shares of companies you’ve probably heard of: Apple, Exxon, Google and Coca-Cola are all large-cap companies.

Are large-cap stocks high-risk? Not generally. These companies tend to be established and well-known, although they’re not all decades-old behemoths. “Tesla is a relatively new company, but it has a gigantic market capitalization,” Ahmed said. “Whereas Ford and General Motors and Chrysler have been around forever, and their market cap combined is less than Tesla’s.”

Large-cap stocks: Less volatility, lower growth potential

Although they’re less volatile, large-cap companies are typically slower-growing. Consider that of the biggest companies at the beginning of 2000, only three out of 10 have grown, seven of the 10 are smaller and only Microsoft is still in the top 10.

“People see these big companies as unsinkable ships,” Yoder said. “Twenty years ago, people would’ve said, ‘What could possibly happen to General Electric?’ Now it’s a quarter of the size it was two decades ago.”

So while you may think that putting all your money in today’s large-cap companies is a solid investing strategy, it could backfire. “Trees don’t grow to the sky,” Yoder said. “The reason small caps sometimes outperform is they simply have more room to grow.”

Large-cap stocks pay dividends

There is one thing large-cap companies have over small-cap companies: payment of dividends. While fewer than four in 10 small-cap companies pay dividends, large-cap companies are often established enough to pay dividends out of revenues.

“Large companies that pay dividends tend to do better and are less volatile in times that there’s a lot of volatility because of geopolitical things that may be happening,” said Ron Palastro, a certified financial planner in Brooklyn, N.Y. “That would be another thing to take into consideration.”

Large-cap stock features

  • Market capitalization of $10 billion or more
  • Tend to be established, well-known companies
  • Stocks are less volatile
  • Growth tends to be slower overall
  • More likely to pay dividends than small-cap stocks

Large-cap vs. small-cap stocks: What’s the difference?

The primary difference between large-cap and small-cap stocks is size: Large-cap stocks are shares of companies with a large market capitalization, and small-cap stocks are shares of companies with a small market capitalization. Note that there are also mid-cap stocks with a market capitalization in the middle.

But there are also differences when it comes to company growth, volatility and other factors. Here’s how it breaks down:

 

Small-cap stocks

Large-cap stocks

Market capitalization

$300 million to $2 billion

$10 billion or more

Company age

Typically younger

More established

Growth

Often pursuing aggressive growth

Tend to grow more slowly

Risk

Higher-risk investment with higher volatility

Lower-risk investment with lower volatility

Dividends

Less likely to offer dividends

More likely to offer dividends

Small-cap vs. large-cap: Historical stock performance

In general, small-cap stocks are considered riskier and large-cap stocks are considered safer investments. But their performances over time depend on when you’re measuring. Over the long haul, for instance, small caps have historically produced greater returns. Since the stock market’s inception, small stocks have beaten large stocks by 4% annually, on average.

As mentioned, small-cap performance can be volatile in the short term. In the year ending December 2018, a small-cap portfolio would have lost more than 11%, compared to a large-cap portfolio’s 4.76% loss. Over the previous 20 years, however, small-cap versus large-cap returned 8.91% versus 5.97%, respectively. And since 1926, a small-cap portfolio would have returned 11.65% to a large-cap portfolio’s 9.83%.

That doesn’t mean large-cap stocks can’t deliver. “Over the last 10 years, large-cap stocks have rather significantly outperformed small caps, by a pretty wide margin,” Yoder said. “And from 1984 to 1999, large caps beat small caps by an average of 5% a year.”

Here’s how the Russell 2000 and the S&P 500 have compared since 1979:

Large-cap vs. small-cap stocks: How much risk do you want?

Investing in large-cap versus small-cap stocks depends somewhat on your appetite for risk and your time horizon. Small-cap stocks are a riskier investment, but if you’ve got decades until retirement, you’ve got time to weather some market swings.

“Someone who’s 25 can potentially take on more risk because if they lose more money, they have time to recover from that,” Ahmed said. “But at the same time, not every 25-year-old is wired the same. I have 25-year-olds who are very risk-averse.”

To invest aggressively in small-cap stocks, you must be comfortable with market swings, and you probably don’t want to put a large chunk of your portfolio at risk. “No matter how risky people think they are, they’re actually not,” Ahmed said. “The first time they see parentheses on their statement, they all change their religion very quickly.”

How much of my portfolio should be small-cap?

Planners suggest putting about 5% to 15% of your portfolio toward small-cap stocks. “You need exposure, but you need a little exposure,” Palastro said. “Maybe it’s 5% or 10%, but it’s not 50%. That’s how I try to explain it.”

On the other hand, leaning too heavily on large-cap stocks can also put you in a precarious position. “Most people consider large caps to be safer, which is often true,” Yoder said. “But in the last two recessions, small caps actually held up better than large caps.”

In other words, people with a portfolio full of mostly large-cap stocks lost more money than those with some small caps mixed in, even though it’s the riskier choice.

“Modern portfolio theory says that even if you add a risky asset to an overall portfolio, as long as it doesn’t move in lockstep with everything else in your portfolio, it can decrease overall risk,” Yoder said. “Even our retired clients still have a percentage of their U.S. portfolio invested in small-cap stocks.”

In the end, it’s crucial to have a mix of both small-cap and large-cap in your portfolio — along with a diverse mix of other investments. For best results, experts recommend a foundation of large-cap stocks (perhaps 30% to 40%) along with a mix of small- and mid-cap stocks, international stocks and some bonds.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Advertiser Disclosure

Investing

Asset Management vs Wealth Management: What’s the Difference?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Asset management and wealth management may seem like interchangeable terms, but they are quite different in practice. Asset management is when you hire someone to direct your investments, while wealth management is advice that addresses every aspect of your financial life, from cash flow to goal planning to insurance coverage. Whether you need one or the other will depend on your situation and stage in life.

What is asset management?

Asset management is the practice of advising and managing investments. If you hire a financial professional to manage your assets, that’s their only focus: the performance of your portfolio, evaluation of your risk and the allocation of assets in investments.

“Ultimately, it’s understanding a client’s goals and developing, implementing and managing a set asset allocation to help a client reach those goals,” said Trevor Scotto, a financial planner in Walnut Creek, Calif.

An asset manager can help you design your portfolio, monitor it over time and distribute the assets as needed. “When someone needs to start distributing assets from their portfolio, an asset manager will help them structure the most intelligent and tax-efficient process,” said Alex Caswell, a financial planner in San Francisco.

What services does asset management offer?

Typically, an asset manager will offer the following:

  • Risk assessment
  • Portfolio design
  • Investment rebalancing
  • Tax minimization strategies
  • Monitoring of investments and investment options
  • Asset distribution

What sort of clients does an asset manager serve?

A typical client for an asset manager might be someone just starting out in their career who needs guidance on setting up their portfolio, or someone with a simpler financial situation in general. They might not have the wealth or complicated money scenario that lends itself to more involved wealth planning.

“On the other side of the spectrum is more of a do-it-yourselfer,” Scotto said. This kind of client might want to manage the rest of their financial lives themselves, along with a bit of investment guidance.

What is wealth management?

Wealth management takes a big-picture view of your finances, from estate planning to insurance coverage. Wealth management includes asset management — but instead of just focusing on your investment portfolio, a wealth manager will take all the other facets of your financial life into account.

The benefit of wealth management, among other things, is that wealth managers consider and advise on other parts of your finances, and those parts can be just as crucial as your investments.

“When clients come in and they’ve really had their financial dreams broken, it usually wasn’t because they messed up on investments,” said Robert DeHollander, a financial planner in Greenville, S.C. “It was usually because they missed something on the financial defense side, especially insurance.”

A wealth manager may also help coordinate planning with all the financial professionals in your life, such as your accountant, insurance agent and estate attorney. “Most of the time, what we find is that none of those advisors are actually talking to each other, and things can get missed,” Scotto said. “There’s so much more value the client can have if all the advisors are aligned.”

What services does wealth management offer?

Wealth management will differ from firm to firm, but in general, you can expect to find many of the following on a wealth manager’s list:

  • Analysis of cash flow and debt management
  • Tax planning
  • Retirement planning and goal setting
  • Social Security analysis
  • Estate planning
  • Legacy planning
  • Insurance analysis (life, health, property, disability, long-term care)
  • Investment management
  • Coordination of all your advisors (CPA, estate attorney, etc.)

What sort of clients does a wealth manager serve?

Wealth management clients are typically further along in their financial affairs — whether that’s higher on the career ladder or with a higher net worth. They also may be people with more complex financial situations, such as business owners, people approaching retirement or those in the midst of a life event that has money in motion.

“That might be a birth, a death or an inheritance,” DeHollander said. “They need a professional to look over their shoulder and give them advice.”

Wealth management can also be helpful for someone coming out of a divorce or having just lost a spouse. “It’s a very emotional time, and you need somebody to be your advocate to help put everything in place,” Scotto said.

The common thread for wealth management clients is that they’ve realized there’s more to their financial security than their investment portfolio. “Investing assets is a necessary part of creating financial security, but by far, it’s not the sole driver,” said Erika Safran, a financial planner in New York City.

Differences between asset and wealth management

In thinking about asset management vs wealth management, it’s useful to imagine that asset management is one piece of the wealth management pie. While wealth management includes asset management, it also includes guidance on your overall financial picture, from whether you have the right amount of life insurance to whether you have the right powers of attorney drawn up.

In general, either kind of manager can be registered as a broker/dealer or as an investment advisor, and either kind of manager may carry fiduciary responsibility, or they may only need to offer recommendations that are “suitable” for your portfolio.

Another difference tends to be in fee structure: Asset managers commonly charge a percentage of assets to manage your investments, or they’re paid on commission by the products they recommend. Some may also offer an hourly rate.

Wealth managers may charge a percentage of assets, but there may be an additional fee — a flat rate or hourly rate — for the evaluation of your financial picture and for recommendations. This may be a fee that’s charged once, or annually, or every time you have them revisit your situation.

 Asset managementWealth management
DescriptionCovers your investment portfolios onlyEncompasses all aspects of your financial life
FocusInvestments, risk assessment, portfolio strategy, asset allocation and distributionInvestments, insurance, estate planning, retirement planning, education planning, legacy planning, charitable giving, tax planning
CompensationUsually a percentage of the assets under management or commissions from the financial products they include in client portfolios, although some are fee-basedMight be a percentage of assets under management and/or a flat or hourly fee for wealth management services charged annually or as needed

The tricky part about differentiating asset management from wealth management is that a lot of firms use wealth management language to describe their asset management functions. Many “wealth managers” are really just asset managers.

“My experience has typically been that you can’t put a blanket statement on these terminologies,” Scotto said. “I’ve seen people who work at banks who call themselves wealth managers. It’s very confusing to the end investor.”

Which is right for you?

The decision to go for asset management versus wealth management is a personal one and depends on your goals and circumstances. If you’re a newer investor and just looking for a kickstart to get your portfolio going, an asset manager may be the right call. If you’re looking for more overall guidance or you have a more complex money situation, a wealth manager can help.

How to choose a wealth manager

It’s important to put some time and research into choosing a wealth manager because that person will be advising you on every aspect of your financial life. “At the end of the day, you need to feel really comfortable with the person you’re working with because ultimately, one of the roles of the advisor is keeping the client from making costly mistakes,” Scotto said. “You have to have so much trust in your advisor.”

To that end, ask friends and co-workers if they’ve worked with an advisor they recommend. “The best way to do it is through a referral, if you know someone you trust who’s had an experience and can give you the name of somebody,” DeHollander said. Talk to at least three advisors before committing. Ask a lot of questions, and make sure it’s a good fit.

Some questions to ask:

  • How do you define wealth management?
  • Who are your typical clients?
  • How are you compensated?
  • Is any of your compensation based on selling products?
  • What is your money philosophy?
  • What licenses do you hold?
  • What financial planning designations or certifications do you hold?
  • What are your areas of specialization?
  • Will I work with you, or someone else in your company?
  • What kind of services can I expect?
  • Are you required to act as a fiduciary?

(This last question is important. As a fiduciary, an advisor is required to put a client’s interests above their own.)

How to choose an asset manager

The process of choosing an asset manager is a lot like choosing a wealth manager, except your range of focus is narrower. As with a wealth manager, it’s still recommended that you speak to at least three advisors before choosing one, and references are a great place to start. You can ask the same questions of asset managers as you would of wealth managers. (But ask them how they’d define asset management.)

Do RIAs offer asset management services or wealth management?

Registered investment advisors (RIAs) may offer both asset management services and wealth management services. It’s important to talk to them about the services they offer so that you understand the scope of their work.

“It’s a case by case basis, firm by firm, advisor by advisor,” Scotto said. “The one thing to point out is that RIAs, as independent firms, are required to uphold fiduciary standards, and if you’re a Certified Financial Professional (CFP), you’re also supposed to uphold the fiduciary standard of care. If there’s any doubt, find an independent investment advisory firm with CFPs on staff, and you’ll be in good shape.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.