Two discount brokerage and RIA custody giants have robo-advisor fever. And traditional mutual fundsters may find themselves outside looking in at the new offerings, as only ETFs fit in.
Yesterday Charles Schwab
president and CEO Walt Bettinger unveiled Schwab Intelligent Portfolios
, a free "automated investment advisory service" that will debut for retail investors in the first quarter of 2015 and through Schwab's RIA allies "shortly thereafter." The move comes after robo-advisor heavyweight Betterment unveiled
an alliance with Fidelity Institutional Wealth Services
earlier this month, giving Fidelity-aligned RIAs access to Betterment's offering in exchange for what the Wall Street Journal describes
as a "one-time asset-based fee from Betterment," a kind of finder's fee for FIWS.
, the New York Times
, the San Francisco Business Times
, the WSJ
, and many others all covered Bettinger's latest play.
, Business Insider
, the Financial Times
, the New York Times
and a host of others covered Betterment and Fidelity's deals.
Schwab is building its own robo-advice service, powered by Charles Schwab Investment Advisory, while FIWS is teaming up with Betterment. Yet both programs have more than enough to make an active fundster grimace. Betterment builds portfolios out of ETFs, and the Schwab program will do the same (including both Schwab's own ETFs as well as third-party ones, across 20 different asset classes -- no mention of which outside ETF shops' wares will be included).
"The service alters the investing landscape by combining innovative technology with proven approaches to advice and the support that only people can provide, all without charging program management fees, advice fees, or commissions, while using low cost exchange traded funds," Bettinger states.
(For fundsters who watch the 401(k) side of the business, the new Schwab Intelligent Portfolios sound reminiscent of the ETF-powered, advice-powered Schwab Index Advantage
401(k) product the San Francisco shop launched
earlier this year.)
Neil Anderson, Managing Editor
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