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Review of Voya Investment Management

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.

Voya Investment Management is a New York-based registered investment advisor that manages investments for institutions and individual clients. With 206 investment advisors, Voya Investment Management covers a wide range of investment strategies, including equity, fixed income, real estate and hard currency.

All information included in this review is accurate as of March 18, 2020. For more information, please consult the Voya Investment Management website.

Assets under management: $108,248,624,160
Minimum investment: $1,000, no minimum on some investment types
Fee structure: Assets under management
Headquarters location: 230 Park Ave New York, NY 10169
https://investments.voya.com/
212-309-8200

Overview of Voya Investment Management

Voya Investment Management got its start in 1972 when it was known as Aetna Capital Management. For many years the firm was a subsidiary of Amsterdam-based ING Holdings. But when ING began divesting its U.S. retirement, investment and insurance business in 2013, the firm rebranded to Voya, an abstract name meant to evoke the image of a “voyage.”

Today, Voya Investment Management Co. LLC is a registered investment advisor and is a wholly-owned subsidiary of Voya Holdings, which is in turn a wholly-owned subsidiary of Voya Financial Inc. (VOYA), a publicly traded company.

What types of clients does Voya Investment Management serve?

Voya Investment Management largely caters to institutional clients in its role as an advisor and sub-advisor. The firm manages the investments of other investment companies. In addition, Voya provides investment management directly to state and municipal governments, insurance companies, corporations, pensions, charitable organizations and banks and thrift institutions. Only about 2% of the amount of assets Voya manages is on behalf of individual investors.

Voya primarily charges a percentage of assets under management, though the firm also charges performance-based fees in some instances.

For institutional clients, Voya’s minimum ranges from $25 million to $100 million. Investors in R share classes, available through qualified retirement accounts, have no investment minimum. When it comes to mutual funds for individual investors, Voya typically has a $1,000 minimum.

Services offered by Voya Investment Management

For individual investors, Voya has a lineup of over 40 mutual funds covering such diverse asset classes as equities, infrastructure, real estate, hard currency and bonds. In addition, the company maintains a roster of target-date funds whose end dates range from 2020 to 2060 in five-year increments.

Alongside traditional mutual funds, many of these strategies also come in 40 variable portfolios that are available exclusively within variable annuity contracts.

Voya also provides portfolio management services to investment companies, small businesses, pooled investment vehicles, large businesses, selection of other advisors including private mutual fund managers and publications and newsletters.

For individual investors, Voya provides the following services:

  • Portfolio management
  • Selection of portfolio managers
  • Wrap programs
  • Publications of newsletters

How Voya Investment Management invests your money

Voya runs a number of index funds and strategies. For actively-managed strategies, Voya seeks to uncover value before the rest of the market. Voya uses the insights of its analysts for fundamental research into these hidden opportunities.

In addition, Voya has a number of equal-weighted funds. Unlike market-weighted portfolios, the strategy most index funds follow, equal-weighted funds allocate the same amount of assets to each name in the portfolio. The strategy is intended to minimize concentration in the market’s largest companies. Voya’s Corporate Leaders 100 and Global Perspective are two funds that employ this strategy.

In fixed income, Voya applies a macro view alongside bottom up security selection. In addition, Voya applies environmental, social and governance factors in its security selection when the managers believe it’s appropriate.

Portfolio/Fund Name Investment Strategy
Voya CBRE Global Infrastructure Infrastructure
Voya Corporate Leaders 100 Large Blend
Voya Diversified Emerging Markets Debt Emerging Markets Bond
Voya Emerging Markets Hard Currency Debt Emerging Markets Bond
Voya Floating Rate Bank Loan
Voya GNMA Income Intermediate Government
Voya Global Bond World Bond
Voya Global Corporate Leaders World Large Stock
Voya Global Diversified Payment World Allocation
Voya Global Equity Dividend World Large Stock
Voya Global Equity World Large Stock
Voya Global Multi-Asset World Allocation
Voya Global Perspectives Fund World Allocation
Voya Global Real Estate Global Real Estate
Voya High Yield Bond High Yield Bond
Voya Intermediate Bond Intermediate Core-Plus Bond
Voya International High Dividend Low Volatility Foreign Large Value
Voya Investment Grade Credit Corporate Bond
Voya Large-Cap Growth Large Growth
Voya Large Cap Value Large Value
Voya MidCap Opportunities Mid-Cap Growth
Voya Mid Cap Research Enhanced Index Mid-Cap Blend
Voya Multi-Manager Emerging Markets Equity Diversified Emerging Markets
Voya Multi-Manager International Small Cap Foreign Small/Mid Blend
Voya Real Estate Real Estate
Voya Russia Miscellaneous Region
Voya SMID Cap Growth Mid-Cap Growth
Voya Securitized Credit Multisector Bond
Voya Short Term Bond Short-Term Bond
Voya SmallCap Opportunities Small Growth
Voya Small Company Small Blend
Voya Strategic Income Opportunities Nontraditional Bond
Voya Target In-Retirement Target-Date Retirement
Voya Target Retirement 2020 Target-Date 2020
Voya Target Retirement 2025 Target-Date 2025
Voya Target Retirement 2030 Target-Date 2030
Voya Target Retirement 2035 Target-Date 2035
Voya Target Retirement 2040 Target-Date 2040
Voya Target Retirement 2045 Target-Date 2045
Voya Target Retirement 2050 Target-Date 2050
Voya Target Retirement 2055 Target-Date 2060
Voya U.S. High Dividend Low Volatility Large Value

Fees Voya Investment Management charges for its services

Typically, Voya Investment Management charges a percentage of AUM to manage clients’ money, though sometimes Voya has other billing arrangements in place.

For individual investors in Voya’s mutual funds, fees range from around 0.50% for the target date funds to 2.00% for the Voya Russia Fund. In addition, the A shares of the firm’s funds levy a 5.75% maximum upfront commission. However, investors can have the front-end load amount reduced with higher deposit amounts.

In addition, Voya also provides wrap program services to broker-dealers. If Voya is selected to be the investment, clients will pay one fee to their broker-dealer for Voya’s service and Voya bills the broker-dealer. In those cases, Voya charges less to the broker-dealer for its services than it would normally charge. However, clients may pay more than going to Voya directly.

Equity Funds Class A Shares Commissions
Total balance Fee
Up to $49,999 5.75%
$50,000-99,999 4.50%
$1 million-249,999 3.50%
$250,000-$499,999 2.50%
$500,000-999,999 2.00%
Over $1 million 0.25%-0.35% 12b-1 fees and 0.25% tail fee for 13 months
Fixed Income Funds Class A Shares Commissions
Total balance Fee
Up to $100,000 2.50%
$100,000-$499,999 2.00%
Over $500,000 N/A

Voya Investment Management’s highlights

  • Covers all bases: Voya’s investment lineup is exhaustive. In addition to typical asset classes, such as equities and fixed income, Voya also has offerings in alternative investments like real estate, global real estate, hard currency and Russian companies. Sophisticated investors who want exposure to these niche areas will be able to complete their portfolios, however, they might be assuming additional risk.
  • High customization: In separately managed accounts, Voya will tailor investments to the individual needs of its clients, such as excluding certain industries and securities if clients have an objection or emphasizing environmental, social and governance factors for those who prioritize that in their investments.
  • Best place to work: Over the years, Voya Investment Management has landed on several lists as a best place to work. For example, in 2019, the firm made it to Pension & Investment Magazine’s “Best Places to Work in Money Management” for the fifth consecutive year. In 2018, the firm was recognized as a “Best Place to Work for Disability Inclusion” by the American Association of People with Disability and the U.S. Business Leadership Network.
  • Low fees: While the gross expense ratio of Voya’s mutual funds seem high, the firm has contractually agreed to waive certain fees. As a result, many of Voya’s mutual fund fees are classified as either “below average” or “low” by Morningstar, the fund research company. On the other hand, A shares of the funds carry a 5.75% upfront commission.

Voya Investment Management’s downsides

  • Few offerings for individual investors: Voya Investment Management’s services are limited to investment management and don’t include financial planning. Further, its focus on institutional investors and high net worth clients mean that individuals who want to invest in Voya funds will first need to find a financial advisor (and pay a commission) to help them invest.
  • Collects performance fees: Voya’s use of performance fees could potentially push portfolio managers to take on additional risk in an effort to boost performance.
  • Potential conflicts of interest: Some Voya Investment Management employees are also registered representatives of Voya Investment Distributors and can receive a commission for the sale of investments managed by Voya. This creates an inherent conflict of interest since these representatives receive financial remuneration for their recommendations.
  • Could be on the auction block: Voya Financial, the parent company of Voya Investment Management, held talks to sell itself in late 2019 with several big insurance companies. Though the talks didn’t result in a sale, there’s speculation that the firm could be on the market with private equity companies in the mix of potential buyers. A sale could result in some disruption for investors as the company transitions from one owner to another.

Voya Investment Management disciplinary disclosures

In 2013, two directors of ING Pomona Private Equity, a closed-end fund of funds and a Voya affiliate, organized in Luxembourg, ran afoul of Luxembourg securities regulation when they failed to file the annual financial statement in a timely manner with the Luxembourg Commission de Surveillance du Sector Financier. The fund received a fine of 2,000 euros. The directors argued that they are not engaged in day-to-day fund activities such as filing annual statements. What’s more, since the fund is a fund-of-funds, it must first receive financial statements from the underlying portfolios in order to file its own annual statement. Besides the monetary fine, there were no other actions taken.

Voya Investment Management onboarding process

To access one of the Voya funds or strategies you’ll need to go through an intermediary, whether that’s a financial advisor or a retirement plan at work. You can get a prospectus for a Voya Investment Management fund by calling 800-992-0180.

Is Voya Investment Management right for you?

Voya has a wide range of investment options that can be the backbone of most people’s investment portfolios. It’s suite of below average and low-fee funds (after sales charges) speak favorably of the line.

However, because Voya’s primary business is institutional, individual investors can only access Voya’s investment strategies through an intermediary such as a financial advisor or in a workplace retirement plan. Advisors who sell Voya funds collect an upfront commission, giving them a financial incentive to do so. Investors need to weigh whether the added cost, plus the potential conflict of interest, are worth it.

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.

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Review of Wetherby Asset Management

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.

Wetherby Asset Management is a San Francisco-based registered investment advisor (RIA) with an additional office in New York City. Catering to high net worth clients with at least $10 million to invest, the firm’s 40 financial advisors provide service to 500-plus clients and oversee roughly $4.85 billion in assets under management (AUM).

Along with traditional investment management, Wetherby also advises clients on impact investments across nearly every asset class. The firm also offers a full range of financial planning services.

All information included in this profile is accurate as of March 20th, 2020. For more information, please consult Wetherby Asset Management’s website.

Assets under management: $4,851,933,986
Minimum investment: $10 million (exceptions made on a case-by-case basis)
Fee structure: 0.15% to 1.00% of AUM; hourly fees; fixed fees; negotiated fees; contingent fees
Headquarters: 580 California Street
Eighth Floor
San Francisco, California 94104
www.wetherby.com
(415) 399-9159

Overview of Wetherby Asset Management

Wetherby Asset Management was founded in 1990 by Deb Wetherby, a former broker in Morgan Stanley’s private client division. Prior to that, Wetherby worked in the auditing and consulting department of Price Waterhouse, the accounting firm. In founding her RIA, Wetherby’s goal was to marry the investing know-how of Wall Street with the personalized service and objectivity of accounting.

Today, Wetherby Asset Management is privately held. Wetherby, who is the firm’s CEO and a wealth manager, owns between 10% and 25% of the firm. The remainder is distributed among 23 other shareholders, only four of whom are non-employees.

The firm generally requires its wealth managers to hold an advanced degree or professional license. Its current team includes a number of chartered financial analysts (CFA), certified financial planners (CFP) and certified private wealth advisors (CPWA).

Which types of clients does Wetherby Asset Management serve?

The vast majority of Wetherby’s clients are high net worth individuals, though the firm works with a limited number of individual investors who are not high net worth. For reference, the SEC defines high net worth individuals as those with at least $750,000 under management or a net worth of at least $1.5 million. In addition to individual investors, Wetherby manages money for charitable organizations, corporations, pooled investment vehicles and state and municipal government entities.

With a $10 million minimum, however, Wetherby caters almost exclusively to high net worth and ultra high net worth clients. In some instances, Wetherby will lower its minimum requirements. Still, clients at the top end of the asset level enjoy low fees and a high level of customization.

Services offered by Wetherby Asset Management

Wetherby Asset Management provides investment management services to all of its client types. Clients typically work with Wetherby under one or more of the following arrangements:

  • Discretionary: Wetherby has the discretion and authority to invest and place trades in client accounts according to a client’s established objectives and guidelines.
  • Non-discretionary: Wetherby provides investment guidance but does not have the authority to place trade in client accounts without prior approval.
  • Consulting: Wetherby provides investment advice as needed based upon a mutual agreement, but clients execute trades on their own.

Wetherby’s services also include an impact investing capability, which is the practice of investing in companies, organizations and funds with the intention of generating positive social and environmental change along with financial return.

In addition to investment management, Wetherby also offers its clients a wide range of financial planning services. These services are provided as needed, and clients may or may not incur additional fees for financial planning.

Here is a complete list of services currently offered by Wetherby Asset Management:

  • Investment management
    • Impact investing
  • Financial planning:
    • Financial statement preparation and analysis
    • Income tax planning guidance
    • Risk management/insurance analysis
    • Retirement planning
    • Estate planning
    • Education planning
    • Philanthropic planning
    • Intergenerational wealth transfer
    • Equity ownership and stock option advice

How Wetherby Asset Management invests your money

Wetherby Asset Management invests client money with the dual goals of growth and downside protection. The firm develops an investment policy for each client that takes into account each client’s needs and goals, as well as the current economic and market conditions.

Wetherby’s investment approach is long term, with advisors looking out at least a year, though changing market conditions could cause Wetherby to sell securities more quickly. The firm diversifies its investments across asset classes and among multiple money managers. To execute its investment strategy, Wetherby primarily uses actively managed funds, though it includes passively managed funds in client portfolios to reduce fees and taxes.

Clients have the ability to customize their portfolios with Wetherby. That being said, client assets are generally invested in open-end, no-load mutual funds and other pooled investment vehicles. In some cases, investments are made in individual equities, fixed-income securities, exchange-traded funds or closed-end mutual funds. Some clients may have assets invested in private investment funds or other separate account vehicles or strategies managed by outside advisors.

In addition, Wetherby clients have access to private fund offerings through LRHF II Holding Company, which is owned and managed by Wetherby Asset Management. Wetherby also has an impacting investing capability for clients who want it. With this service, the firm reviews the social and environmental challenges that clients want to address and then finds appropriate investments to meet those goals.

Fees Wetherby Asset Management charges for its services

Wetherby charges clients based on a percentage of assets under management for its discretionary investment management services. There different fee schedules for clients with portfolios under $10 million and portfolios over $10 million, with rates generally declining the more assets a client has invested. However, the firm’s rates are negotiable and may be lowered for charitable organizations or employees’ family members and friends.

Fee Schedule for Portfolios Under $10 Million
Assets Under Management Annual Rate
First $3 million 1.00%
Amounts over $3 million and up to $9 million 0.75%
Amounts over $9 million and up to $10 million 0.00%
Fee Schedule for Portfolios Over $10 Million
Assets Under Management Annual Rate
First $10 million 0.75%
Amounts over $10 million and up to $40 million 0.55%
Amounts over $40 million and up to $80 million 0.25%
Amounts over $80 million 0.15%

In addition to the fees charged by Wetherby, clients may be responsible for some trading fees, such as when investing in private placements. Clients will also incur expenses for investing in mutual funds and other pooled accounts. Further, clients who use the services of LRHF will be charged an additional fee.

Whetherby’s fee may also include a negotiated fee in which clients contribute a portion of their negotiated fee into Wethreby’s Donor Advised Fund.

In some circumstances, Wetherby may negotiate with another investment advisor on behalf of a client for a reduced fee. For this service, Wetherby fees may include a contingent fee, which is charged based on a percentage of the client’s savings.

For the firm’s non-discretionary asset management and consulting services, clients may be charged either a fixed or hourly fee, with the rate varying based on the complexity of the client’s situation.

Wetherby Asset Management’s highlights

  • Low fees (for big investors): Those with more than $80 million to invest can enjoy rock bottom fees of 0.15%. A sampling of investment advisory fees in 2019 by AdvisoryHQ shows that the average rate for assets over $30 million is 0.59% a year, which is significantly higher than Wetherby’s rate.
  • High level of customization: With just under 550 clients, Wetherby has 40 investment advisors on staff. The firm allows clients, including those who request impact investing, to place certain restrictions on the types of investments in their portfolios. Additionally, Wetherby will provide consultation and oversight to assets not held at the firm for no additional charge, unless asked to provide reporting or additional research on the assets.
  • Awards and accolades: Wetherby has frequently earned top rankings over the years. The firm’s founder, Deb Wetherby, landed the No. 5 slot on Forbes’ list of the Top 50 Best-In-State Wealth Advisors in 2020; No. 122 on Forbes’ list of America’s Top Wealth Advisors in 2019; and No. 19 on the magazine’s list of America’s Top Women Advisors in 2019. Other awards the firm has won include two entries on the list of the 2018 Top Wealth Advisor Moms by Working Mother magazine and appearances on B Lab’s lists of the Best for the World for Changemakers, Workers, Customers and Governance in 2019.

Wetherby Asset Management’s downsides

  • High account minimum: Wetherby’s high investment minimum requirement of $10 million makes its services out of reach for many investors. However, the firm will waive this minimum on a case-by-case basis, and it does currently serve just under 50 individuals who do not meet the SEC’s definition of high net worth individuals.
  • Small geographic footprint: With just two offices, Wetherby has a limited geographic reach. If you aren’t located in San Francisco or New York, it will be challenging to meet with your advisor in person, though the firm is registered in a number of other states if you’re open to working remotely with your advisor.
  • Potential conflict of interest: Debra Wetherby and two other owners of the firm also own minority ownership interests in a savings and loan holding company called National Advisors Trust Company (NATC). The firm intends to refer clients to NATC for trust and custodial services, contending that NATC provides these services for less than competitors. While the firm states in its Form ADV that it “will only recommend NATC to its clients when it is in the best interest of its clients,” this outside interest does present a potential conflict of interest as advisors may have an incentive to give the company additional work, thus referring its clients.

Wetherby Asset Management disciplinary disclosures

Wetherby has no disciplinary disclosures listed in its Form ADV. SEC-registered firms are required to provide prompt disclosures of any legal or disciplinary actions in their Form ADV to help current and prospective clients evaluate the firm. The type of legal and disciplinary events that must be disclosed include criminal and civil actions; administrative proceedings before a federal regulatory agency; and proceedings before a self-regulatory organization.

Wetherby Asset Management onboarding process

Prospective clients can contact Wetherby by filling out a form on its website, emailing the firm at [email protected] or calling (415) 399-9159.

Once clients choose to work with the firm, they will attend an official kickoff meeting during which advisors will get to understand the client’s goals and risk tolerance to create a suitable portfolio. The firm continually monitors clients’ investments and will make adjustments as necessary as a client’s goals and objectives change over time.

Clients have five business days after signing on with Wetherby to rescind the contract (though they will be required to settle transactions that Wetherby began on their behalf).

Is Wetherby Asset Management right for you?

For high net worth investors, Wetherby Asset Management offers a customizable investment management experience. Additionally, the firm’s requirement that wealth managers hold professional licenses and its clean disciplinary record can provide assurances to investors that they’ll be taken care of. What’s more, Wetherby’s emphasis on impact investing gives investors an option to participate in an increasingly popular investment style. However, the firm’s high account minimums leave out all but the very wealthy who are based near the firm’s offices in San Francisco and New York City from getting advice there.

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.

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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.

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