Schwab Intelligent Portfolios vs. FutureAdvisor – Rankings & Reviews


Robo-advisors are fast becoming the top choice for investors who want more affordable and more convenient portfolio management compared to human financial planners. Schwab Intelligent Portfolios and FutureAdvisor are two online investment management firms that offer attractive features, particularly low-cost services and free account management.

Is FutureAdvisor safe? What are the advantages of using a Schwab robo-advisor? How do these online advisory companies stack up against each other in terms of features and pricing?

If you’re looking for an extensive comparison of these robo-advisors, we’ve come up with a detailed review to help you make the right choice the first time. Read on to learn more about Schwab and FutureAdvisor fees, features, and pros and cons.

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Schwab Intelligent Portfolios vs. FutureAdvisor: Company Overview

Schwab Intelligent Portfolios provides portfolio management services through Schwab Wealth Investment Advisory, which is a subsidiary of The Charles Swab Corporation. Established by Charles Schwab in 1971, the Charles Schwab Corporation is the largest publicly-traded investment services company today, with approximately $2.56 trillion in client assets, 1.5 million corporate retirement plan members, and around 1 million banking accounts as of 2016.

As one of the pioneers of discount brokerages, Charles Schwab is renowned and well-respected in the financial services industry. He has laid the foundations for numerous innovative investment services, including online trading.

What makes Schwab Intelligent Portfolios different from Schwab competitors is the “free” advisory service. However, while the firm claims that it doesn’t charge advisory fees, account service fees or commissions, we’ve found that there are still certain fees involved, which we’ll explain further below. 

FutureAdvisor is a San Francisco-based online advisory company that’s composed of financial experts, data scientists, and software engineers. The online advisory service features portfolio diversification, low-cost index funds, and tax-efficient management.

FutureAdvisor takes advantage of modern portfolio theory to build portfolios and achieve the highest return according to the risk levels indicated in your profile. The online advisory service also offers certain free services, but the company’s premium services are based on a flat annual fee.



Schwab Intelligent Portfolios vs. FutureAdvisor: How They Work

Schwab Intelligent Portfolios helps you reach your savings or income goals by building, monitoring, and rebalancing your portfolio with the use of sophisticated automated technology as well as the expertise of the Charles Schwab Investment Advisory team. The team has investment experts who handpick low-cost exchange-traded funds to give you a diversified portfolio. 

The online financial advisor supports Roth, traditional, and rollover IRAs as well as custodial, individual, joint tenants, and trusts. The account minimum is $5,000, and the firm automatically rebalances accounts with this minimum balance. The Schwab robo advisor offers automatic tax-loss harvesting, which offsets taxes on gains, for clients with a minimum of $50,000 invested assets in their accounts.

Portfolios are composed of a maximum of 20 asset classes. After selecting the ETFs, the Schwab investment professionals regularly keep track of the ETFs to ensure diversity and consistency based on your risk profile.

Investing with Schwab Intelligent Portfolios involves three easy steps:

  • First, you’ll have to answer several questions so the online advisory service can assess your risk profile.
  • Then, you’ll review your suggested portfolio.
  • Once you finish the enrollment process, the online financial advisor starts to monitor your progress.

You may access your portfolio details on the go by downloading Schwab’s Android or iOS app.

The Schwab robo-advisor warns on its website that its brokerage products are not FDIC-insured, there’s no bank guarantee, and invested assets may lose value.

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How FutureAdvisor Works

FutureAdvisor offers direct management services for joint and individual taxable accounts as well as traditional, Roth, rollover, and SEP IRAs. When you opt for direct management, you allow the company to trade on your behalf.

FutureAdvisor requires an account minimum of $10,000 and provides automatic rebalancing for managed accounts. Unlike Schwab, FutureAdvisor uses daily tax-loss harvesting on taxable managed accounts without any required minimum for invested assets.

The online advisory service cannot manage your 401(k) account if you still work for your employer, except if the account is on Fidelity and BrokerageLink-enabled. FutureAdvisor can help rollover your 401(k) account if you’re no longer working for your employer.

If you’re wondering “Is FutureAdvisor safe?” the company partners with the leading brokerages TD Ameritrade and Fidelity Investments, which are SIPC-insured. To enroll in FutureAdvisor Premium services, you must transfer your assets to TD Ameritrade or Fidelity so that FutureAdvisor can trade in your accounts.

Like the Schwab robo-advisor and several other FutureAdvisor competitors, FutureAdvisor monitors your portfolio on a daily basis using both an advanced algorithm and a human investment team. Licensed finance advisors and specialists can help answer your questions regarding your portfolio via online chat, email or phone call.

FutureAdvisor uses a holistic approach to help you attain your financial goals. This approach involves directly linking to all of your investment accounts, allowing the FutureAdvisor propriety software to come up with the best suggestions.

The online wealth management service provides comprehensive investment advice that considers your family, savings or income goals, and accounts. Your invested assets are under your name at reputable U.S. brokerages.

When it comes to retirement planning, FutureAdvisor boasts a signup process that takes less than 2 minutes to complete. If you want a free, personalized college savings plan, the online investment advisor creates a plan that fits your specific goals and budget by asking several questions and identifying education-related investment accounts.

Tax-efficient saving is a main consideration when designing your college savings plan. FutureAdvisor consolidates your current funds and opens accounts, if needed. The company then manages your accounts and diversifies your investments for maximum returns.

To keep track of your investments conveniently, FutureAdvisor also lets you browse on your mobile device through the FutureAdvisor app, which is available for iOS devices.

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Schwab Intelligent Portfolios vs. FutureAdvisor: Key Features

Schwab Intelligent Portfolios has a lot to offer to investors. Here are the major features of this online advisory service:

  • Wide range of asset classes: Having a solid roster of 54 ETFs encompassing 20 asset classes makes the Schwab robo advisor stand out. With a large selection of choices, including stocks, bonds, and emerging markets, the online investment advisor allows for effective portfolio diversification.
     
  • Better personalization: Most Schwab competitors offer a custom portfolio by evaluating the answers of clients to questions related to their investing goals, risk levels, and time horizon. In comparison, Schwab Intelligent Portfolios takes the customization process one level higher by letting you modify your asset allocation. You may opt to remove up to three ETFs and replace them with alternative investments chosen by the Schwab investment team.
     
  • Goal Tracker monitoring tool: This feature gives you a daily screenshot that compares your portfolio to your savings or income goals. After calculating different random return scenarios, Goal Tracker reports whether you’re on target, at risk or off target, based on your present savings and returns rate. The feature also recommends adjustments to increase your chances for lasting success.
     
  • 24/7 support from Schwab investment professionals: If you want immediate answers or assistance, customer support is available around the clock through online chat or phone call. 

FutureAdvisor categorizes its services into retirement planning and college savings. Take a look at the primary features of this robo-advisor:

  • Free retirement planning: FutureAdvisor’s advanced software evaluates your existing portfolio, regardless of where your assets are held, and gives you a detailed plan to maximize your investment and minimize taxes. Portfolio analysis and suggestions are available for free.
     
  • Free college savings plan: When comparing Schwab Intelligent Portfolios vs. FutureAdvisor, FutureAdvisor one-ups the competition by providing free college savings plan advice to help you determine the amount you’ll need for your children’s education. The plan also lets you explore the best combinations of account types to minimize taxes. Opening and management of your account is free of charge.
     
  • Advisor comparison: FutureAdvisor lets you compare its fees and returns against traditional FutureAdvisor competitors for transparency so you know which one is a more cost-efficient way to invest.
     
  • Free investing library: The online investment service features a wealth of educational materials to help you get started, reach your goals, and understand how to grow your money. The library also includes a 401(k) directory.
     
  • FutureAdvisor app: Its iOS app allows you to access your account and keep track of your progress on your iPhone, iPod or iPad.

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Schwab Intelligent Portfolios vs. FutureAdvisor: Pricing Structure

Schwab Intelligent Portfolios offers an attention-grabbing unique selling proposition: its advisory services are available for free. The online investment management company doesn’t charge advisory fees, account service fees or commissions.

However, while the company markets its services as free, you’ll have to pay for operating costs associated with your portfolio’s ETFs, although the Schwab robo advisor emphasizes that these fees are considerably lower than Schwab competitors.

The robo-advisor explains that Schwab affiliates earn profits from the underlying assets in clients’ accounts. Revenue sources include management of Schwab ETFs, services related to third-party ETFs, and the cash feature of Schwab accounts. Schwab Intelligent Portfolios also gets paid by trading companies and exchanges that receive ETF trade orders.

When comparing Schwab Intelligent Portfolios vs. FutureAdvisor, one commonality is the availability of certain “free” services. FutureAdvisor doesn’t charge advisory fees or obtain payments related to DIY investment management. You may sign up for a free account and access custom account-by-account portfolio recommendations. This is a free unlimited service. You may call your brokerage to enact the suggested trades.

The free advice and management services for your college savings plan or retirement plan makes FutureAdvisor stand out among FutureAdvisor competitors.

This robo-advisor gives you free portfolio suggestions. After you review the recommendations, you may enable FutureAdvisor to manage your assets directly in a TD Ameritrade or Fidelity account for an annual fee. You can have a three-month free trial, and you may leave without paying anything if you’re not satisfied with the results.

FutureAdvisor doesn’t charge opening and account maintenance fees on institutional accounts. FutureAdvisor fees apply to premium services. The online financial advisor charges a 0.5 percent flat yearly management fee of your directly managed assets. The firm doesn’t charge anything for assets not directly traded in, including 401(k) accounts with present employers.

The initial rebalancing of your portfolio involves certain trading commissions, but subsequent rebalancing typically involve zero trading commissions due to the use of commission-free ETFs.



Schwab Intelligent Portfolios vs FutureAdvisor: Which Is Better? 

On the whole, both the Schwab robo-advisor and FutureAdvisor are helpful services for investors who want low-cost, streamlined, and convenient investment management.

If you’re a beginner investor or an IRA investor, Schwab Intelligent Portfolios is ideal for you. This online financial advisor is also an excellent choice if you prefer a wide selection of ETFs and asset classes and free advisory and account service.

FutureAdvisor is best recommended if you’re a current TD Ameritrade or Fidelity account holder. If you’re a DIY investor who’s looking for free personalized advice, you may significantly benefit from using FutureAdvisor for your investment needs. The online advisory service is also a smart option if you aim to manage your children’s college savings or if you need 401(k) advice.

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