Charles Schwab this week launched its latest robo-advisor platform, the Institutional Intelligent Portfolios, aimed specifically at registered investment advisors. The platform essentially doubles the number of ETFs that advisors who custody at Schwab can access to build portfolios—450 in total that slice and dice 28 different asset classes.
The move is all about offering RIAs the ability to scale their businesses and customize their portfolios through various ETFs, according to the company. The process to enroll a client is pretty straightforward: Client profiles are entered into the system through a questionnaire, matched to one of the advisor’s customized portfolios, a decision is made on that allocation plan and money is invested.
Schwab’s move underscores a growing trend within the advisory business; namely, automation. Firms like Wealthfront and Betterment have been slugging it out in the field of automated portfolio management and leading the charge in technology innovation. Back in March, Schwab entered the fray with the rollout of its own robo-advisor service, Schwab Intelligent Portfolios, with a minimum portfolio requirement of $5,000.
According to Schwab, fees for the new institutional-caliber service are based on assets custodied with Schwab outside of the Institutional Intelligent Portfolios program.
“For advisors with less than $100 million in assets under management (AUM) with Schwab, there will be a 10 basis point platform fee,” the company said in a press release. “For those firms who maintain more than $100 million in AUM at Schwab, there will be no fee. No account service fees, trading commissions or custody fees will be charged to advisors’ clients by Schwab.”
Additionally, three ETFs launched today, including a pair of currency-hedged strategies focused on Europe and Japan, and an actively managed fund that mimics tactical maneuverings of hedge funds.
The currency-hedged strategies, from Bethesda, Maryland-based ProShares, are as follows:
- ProShares Hedged FTSE Europe ETF (HGEU), a strategy focused on developed Europe, with an annual expense ratio of 27 basis points, or $27 for each $10,000 invested.
- ProShares Hedged FTSE Japan ETF (HGJP), a strategy focused on companies in the world’s third-biggest economy,with an annual expense ratio of 23 basis points.
The active fund launching today is the Hull Tactical US ETF (HTUS), which is designed by veteran investor Blair Hull. It is built to steer clear of the damage associated with huge drawdowns, such as in 2008-2009, according to a press release from Chicago-based Hull Tactical Asset Allocation.
The fund has an annual expense ratio of 100 basis points.