- Review: Charles Schwab
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What Is Charles Schwab?
Charles Schwab was founded in 1971 by its namesake chairman, Charles R. Schwab. The full-service investment firm is headquartered in San Francisco, California. Schwab manages $2.61 trillion in investments for more than 9 million clients. It has 300 locations in the United States where you can meet with an advisor face to face, or you can easily reach your designated consultant by phone or email.
Charles Schwab Features
|Options Trades||$6.95 + $0.75/contract|
|Accounts Available||Traditional IRA, Roth IRA, SEP IRA, SIMPLE IRA, 401(k) Plan, Custodial, Coverdell, 529, Trust, Estate, Charitable, Individual, and Joint|
|Mobile App||Yes — Apple iOS, Apple Watch and Google Android|
|Customer Service||Phone, Email and Branch Office|
|Promotions||See Charles Schwab Promotions Page|
Outstanding customer service — From our test we’ve had only positive experiences with Schwab customer service. In one example the personal consultant, named Melanie, promptly answered all questions we had about an account. When we opened a new retirement account, she helped find mutual funds and exchange traded funds (ETFs) we could buy with no fee. When we needed to update information in the portfolio, she pointed me to the right people. And because it is Schwab, her advice and help is all free.
24/7 customer service — You can reach a customer service representative anytime of any day of the week and even 365 days per year. You can get help with investing and trading and with personal financial decisions. The service is free and is available by phone, email or online chat.
Schwab Intelligent Portfolios — Schwab is bringing professional investment advisory services to the small investor. For investors with as little as $5,000 to invest, Schwab Intelligent Portfolios uses an advanced algorithm and the professional insights of Charles Schwab Investment Advisory Inc. to develop a portfolio of low-cost ETFs. Your portfolio can include as many as 20 asset classes, including commodities and real estate.
Once your portfolio is in place, the Schwab advisory team will continue to monitor its performance. And if your balance is $50,000 or more, you will be eligible for tax-loss harvesting. Best of all, there are no advisory fees, commissions or account service fees.
Nationwide branches — Charles Schwab operates more than 300 local branch offices across the United States. It’s a nice option to have if you ever need face-to-face help with your investing needs.
Portfolio management services — You can go the do-it-yourself route, but if you’d like some help, you can always get it at no cost by calling customer service. But if you want full investment management, Charles Schwab offers it through various services, including Diversified Managed Accounts, which give you access to multiple asset managers through just one account or Schwab Intelligent Portfolios or Schwab Managed Portfolios.
Schwab can provide fully managed accounts, as well as their Thomas Partners dividend growth strategy. They also offer their Windhaven Strategies for global diversification. There are minimum account requirements as well as various fees associated with portfolio management services.
Current Schwab promotions — Charles Schwab is currently paying a cash bonus of up to $500 when you become a client. You can do this by opening an eligible brokerage or IRA account and making a qualifying net deposit into the account within 45 days.
The cash bonus pays on a sliding scale, based on the amount of the net deposit as follows:
- $10,000 to $24,999 — $100
- $25,000 to $49,999 — $200
- $50,000 to $99,999 — $300
- $100,000 and up — $500
One-on-one portfolio consultation — If you have at least $25,000 in your account, you are eligible for one-on-one portfolio consultation, even if you aren’t participating in Schwab Intelligent Portfolios.
Charles Schwab Bank — Charles Schwab offers banking to go along with your investment account. Through Charles Schwab Bank, you can have checking and savings accounts, as well as get home financing. This includes a Schwab Bank High Yield Investor Checking Account, which pays interest, has no monthly fees, no minimum account balance, and unlimited fee rebates from ATMs worldwide. It works with the mobile app, offers mobile deposits, and can be linked to Apple Pay
Investments available — Just about every asset type you can think of, including options. They also offer more than 3,000 no-load, no transaction fee mutual funds.
Account protection — Cash on deposit with Charles Schwab Bank is FDIC insured for up to $250,000 per depositor. Investment accounts are protected by SIPC for accounts of up to $500,000 in cash and securities, including up to $250,000 in cash.
Clearing agency — Charles Schwab is a “self-clearing” broker.
Annual fees/costs — There are no account fees for the basic Schwab One Brokerage Account. Transaction fees are as follows:
- Stocks and ETFs: $8.95 per trade
- Preferred Stocks and REITs: $8.95 per trade
- Options: $8.95 + $0.75 per contract
- Mutual Funds: $76 to buy; no fee to sell
- Schwab OneSource Funds: No fee
- US Treasury securities: No fee
- Other fixed income securities: $1 per bond; $10 minimum; $250 maximum
Assets under management — $2.61 trillion, with nine million customers.
Charles Schwab Mobile App
Schwab Mobile enables you to do everything on your smart phone you can do on the web platform. That includes following the market in real time, executing trades and moving money between your accounts. The mobile app is also available for Apple Watch.
- First-rate customer service — 24/7 customer service, 365 days per year, including answers to just about any question you have.
- No-fee professional portfolio management — Schwab Intelligent Portfolios gives you professional investment management free of charge on accounts as small as $5,000.
- Low account minimum deposit — The $1,000 minimum requirement is new-investor friendly.
- No account fees — There are no account fees and no inactivity fees.
- Investing and banking with the same company — Charles Schwab Bank enables you to move money seamlessly between your investment and bank accounts and gives you fee-free ATM access at thousands of ATMs across the country and worldwide.
- The Charles Schwab promotion bonus — You can get up to $500 by opening a regular account or an IRA.
- Commissions are on the high end of the major brokers’ scale — $8.95 per trade could be a negative if you are an active trader. There are brokers with much lower fees.
We highly recommend Charles Schwab as a full service brokerage firm. We have only good things to say about every interaction we’ve had with the company and its staff. They are the Nordstrom of the investment world, and customers virtually always leave happy.
RATING: Four stars out of five. The service is excellent on all fronts, with the one limiting factor being that commissions are a bit on the high side of the larger investment brokerage firms.
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