Registered Investment Advisor (RIA) clients of Charles Schwab & Co., Inc. now have access to a new digital experience and customization enhancements for Schwab Personalized Indexing™, Schwab’s direct indexing solution that provides tax-loss harvesting and professional portfolio management.
RIAs can now onboard clients with individual, joint tenant and many other account types more easily by digitally opening and funding new Schwab Personalized Indexing accounts on the Managed Account Access® (Access) platform, as well as other separately managed account offers on the Managed Account Select® (Select) and Managed Account Access® (Access) platforms. Digital enrollment means fewer errors, faster processing and a more streamlined workflow experience for RIAs and their clients.
A new Schwab Personalized Indexing account-level digital dashboard is available to RIAs to view client accounts. The dashboard offers transparency and highlights the performance of each Schwab Personalized Indexing account, including total realized gains and losses generated in accounts driven by proprietary tax-loss harvesting algorithms.
In addition, RIAs can now exclude more individual stocks as well as entire industries and sub-industries in Schwab Personalized Indexing client accounts. The maximum number of exclusions are guided by a predictive tracking error tool that provides an indication of how a portfolio is expected to perform relative to its reference index after accounting for the exclusions and still delivering on the potential benefit of tax losses to reduce overall tax bill.
“We know that independent advisors are increasingly looking for ways to personalize the investing experience for their clients,” said Divya Krishnan, Director, Schwab Product Management. “We are excited to bring advisors a more efficient, modern experience for enrolling their clients in Schwab Personalized Indexing, alongside powerful new capabilities for tailoring portfolios to personal client preferences or situations.”
Schwab Personalized Indexing, which launched more than a year ago in April 2022, uses a combination of technology and human oversight. The technology leverages a proprietary daily optimization process that assesses opportunities to lock-in tax losses that is managed and overseen by a team of investment professionals that brings more than two decades of cumulative direct indexing experience.
“At Schwab, we are constantly looking for ways to provide independent advisors with more investment choices for their clients and for opportunities to help them deliver personalization at scale with maximum ease,” said Jalina Kerr, Managing Director of Client Experience at Schwab Advisor Experiences. “Advisors have asked for direct indexing and we have delivered on that – and importantly, we will continue to enhance Schwab Personalized Indexing based on the evolving needs of RIAs and their clients.”
Schwab Personalized Indexing has an account minimum of $100,000 — lower than most direct indexing offerings on the market which typically start at $250,000 or higher — yet at an account size that still provides the potential for tax benefits to the client.
For more information about Schwab Personalized Indexing visit www.schwabassetmanagement.com/personalized-indexing.
About Schwab Asset Management
One of the industry’s largest and most experienced asset managers, Schwab Asset Management offers a focused lineup of competitively priced ETFs, mutual funds and separately managed account strategies designed to serve the central needs of most investors. By operating through clients’ eyes, and putting them at the center of our decisions, we aim to deliver exceptional experiences to investors and the financial professionals who serve them. As of March 31, 2023, Schwab Asset Management managed approximately $835.9 billion on a discretionary basis and $34.3 billion on a non-discretionary basis. More information is available at www.schwabassetmanagement.com.
About Charles Schwab
At Charles Schwab we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.
This information is not intended to be a substitute for specific individualized tax, legal or investment planning advice.
Neither the tax-loss harvesting strategy nor any discussion herein is intended as tax advice, and Schwab Asset Management does not represent that any particular tax consequences will be obtained. Tax-loss harvesting involves certain risks including unintended tax implications. Investors should consult with their tax advisors and refer to Internal Revenue Service (“IRS”) website at www.irs.gov about the consequences of tax-loss harvesting.
Schwab Personalized Indexing is available through Schwab’s Managed Account Connection® program (“Connection”). Please read Schwab’s Disclosure Brochure for important information and disclosures relating to Connection and Schwab Managed Account Services.
Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market.
Please refer to the Charles Schwab Investment Management, Inc. Disclosure Brochure for additional information.
Portfolio Management for Schwab Personalized Indexing is provided by Charles Schwab Investment Management, Inc., dba Schwab Asset Management, a registered investment adviser and an affiliate of Charles Schwab & Co., Inc. (“Schwab”). Both Schwab Asset Management and Schwab are separate entities and subsidiaries of The Charles Schwab Corporation.
There are risks associated with any investment approach, and each Schwab Personalized Indexing strategy and equity market segment has their own set of risks based on client strategy selection and further customization.
Strategies that use screening to exclude certain investments may not be able to take advantage of the same opportunities or market trends as strategies that do not use screens. There can be no assurance that the strategies will achieve their desired outcomes. Each investing strategy brings with it its own set of unique risks and benefits.