I’ll bet you’re trying to find the best broker to help you invest your hard-earned money.

Am I right?

If so, I’m sure you’ll agree with me when I say it’s not easy to decide what broker to use, because they all offer such different platforms, charge different fees, have different customer service experiences, etc….

So, how do we decide what broker is best?

It’s not easy, because everyone has different pain points.

Do you care about fees more than the technology?  Do you care about the research more than  customer service?

I believe this Charles Schwab review will hit on all the potential pain points, and it should give you a better idea if Charles Schwab is the broker for you.

Charles Schwab Features

Charles Schwab Brokerage Review

Positives of Charles Schwab Brokerage Services

• Trading Fees – $4.95 per trade. Charles Schwab has a competitive trading fee compared to its peers. This is one of the most attractive feature of Charles Schwab, especially if you are someone who makes many trades.  The only broker with a comparable trading fee is Fidelity.
• ETFs – Charles Schwab offers over 200 commission free ETFs. These days, it is extremely important for brokers to offer commission free ETFs.  A commission free ETF is not to be confused with the fee for the ETF.  Charles Schwab ETFs still charge a fee; they just don’t charge a commission to trade the ETF.
• Investment options – Charles Schwab offers a full range of Investments including:

Stocks
Bonds
ETFs
Mutual Funds
Futures
Options

• Minimum investment – $1,000 minimum deposit or $100 automatic monthly deposit. Charles Schwab does have a minimum deposit of $1,000 to open an account.  However, if you sign up for monthly automatic deposits of at least $100, you can bypass the $1,000 account minimum.
• Satisfaction guarantee – Schwab offers a satisfaction guarantee to its clients. Anyone who incurs fees and/or commissions and is not happy with the services is eligible to have certain fees refunded.  Fees that are eligible for refund include (but are not limited to) previous quarter program fees for: Schwab Managed Portfolios, Schwab Private Client, Windhaven Strategies, ThomasPartners Strategies.  Some Schwab Bank fees are also eligible for the satisfaction guarantee refund.
• Mutual funds – Schwab offers 3,000+ no load, no transaction fee mutual fund
• Charles Schwab retirement – Multiple retirement accounts available through Charles Schwab.  Accounts for both individuals and businesses include:

IRA
Roth IRA
Rollover IRA
Inherited IRA
Custodial IRA
Individual 401k
SEP IRA
Personal Defined Benefit
SIMPLE IRA
Business 401k

• Promotional offers – Clients of Charles Schwab can refer friends to open an account. If your referral opens an account and enrolls, they will receive $100.

Technology and Research Platforms

Charles Schwab has a lot to offer in terms of its technology and research.  Here are some positives and negatives of Schwab’s technology and research platforms.

Positives of Charles Schwab research and technology

• Intelligent Portfolio robo-advisor – Charles Schwab offers a robo-advisor platform called, Intelligent Portfolios.  This robo-advisor offers a low-cost portfolio of ETFs.  One great aspect of the robo-advisor is the lack of fees.  Because Charles Schwab owns the ETFs utilized by Intelligent Portfolios, it does not charge an additional management fee.
• StreetSmart Suite – StreetSmart is a suite of products for investors to trade stocks and options.  Schwab offers multiple StreetSmart products.  StreetSmart Edge is a downloadable software for your desktop.  It is designed and built for sophisticated and serious traders.  StreetSmart also offers trading services on streetsmart.com and can be utilized on mobile as well.  Streetsmart.com is more geared to intermediate investors.  StreetSmart Central is the Charles Schwab trading platform designed for options trading.
• Research – Charles Schwab is best in class when it comes to research:
  • Schwab Equity Ratings – Charles Schwab uses their own proprietary method to rate the performance of equities.  Almost all brokers utilize third party analysis for ratings; Charles Schwab really stands out with their extensive ratings research.
  • Market Research from third parties – Morningstar, Credit Suisse, Ned Davis, Argus, and Market Edge.
  • Schwab BondSource – access to over 30,000 bond ratings from S&P and Moody’s.
  • Fixed income – municipal bond research for new issues through J. P. Morgan
  • Bond Wizard – helps with bond investment choices.
  • Screeners – access to screeners for equities, ETFs, bonds, mutual funds, options, and stocks.

Negatives of TD Ameritrade research and technology

• Robo-advisor minimum – Schwab’s Intelligent Portfolio rob-advisor has a minimum $5,000 investment. This is high for robo-advisors, since there are quite a few offering minimums of $100 or less.  One example of this is M1 Finance.  While the fees and technology of Schwab’s Intelligent Portfolio is great, it’s minimum is high.
• Charles Schwab app – the general app for Charles Schwab has a bit of a clunky interface and is not the easiest to use.  The app allows for trades and shows portfolio rates of returns, however, it does not come with some important functionality, such as stock alerts.  In general, the app could be designed better.

Charles Schwab Advisory Services

Schwab has a solid advisory arm including everything from personal financial consultants, to robo-advice and managed portfolio solutions.

Schwab Intelligent Advisory

This services offers robo-advice for a low fee of .28% as long as you invest more than $25,000.  Think of it as a cheaper option than a relationship with an individual financial planner.  Schwab Intelligent Advisory provides access to a Certified Financial Planner (CFP) 24/7.  Not everyone is interested in just opening a brokerage account and buying a few stocks or ETFs.  There are many people searching for advice on complicated issues, from college planning and 529 plans, to guidance on whether to open a Roth IRA, traditional IRA, or maybe even a SEP or Simple IRA.  With access to CFPs, you can ask their opinions on what is best for you.

Schwab Private Client

For a fee of .90% on equities and .70% on fixed income, a client with more than $500,000 can utilize Schwab Private Client.  This includes a team that will work together for a unique and individualistic service to help you with your goals.

Schwab Advisor Network

Schwab has a network of independent advisory firms that have met their requirements and been prescreened.  There are over 200 advisory firms spread across the United States, many of the advisors holding advanced designations, such as the CFP designation.

Schwab Managed Portfolios

There are two types of managed portfolios at Charles Schwab: ETFs and Mutual Funds.  If you utilize the managed portfolios, you will have professional portfolio management and a diversified portfolio for a minimum investment of $25,000.

• Managed Portfolios : Mutual Funds – twenty- four portfolio models are available which hold a blend of stocks, bonds and cash.  The fees range from .90% – .20% depending on the amount of money you invest.
• Managed Portfolios: ETFs – twelve portfolio models are available based on risk tolerance; they range from conservative to aggressive.  The fees range from .90% – .50% depending on the amount of money you invest.

Managed Account Select

The Managed Account Select is a service offered by Schwab and will allow access to a financial consultant.  This program invests in individual securities and fixed income assets, as opposed to other strategies investing in ETFs and mutual funds.  Your money is managed by a third-party asset manager who will invest depending on your strategy.  It includes a minimum $100,000 investment and the fees for the equity strategy start at 1.35%.  The fees for the fixed income strategy start at 0.65%.  The fees for a balanced equity strategy start at 0.95%.

Windhaven Strategies

This is an option provided by Schwab through their division: Windhaven Asset Management.  The Windhaven Strategies include tactical investment strategies, which allow for the asset managers to take a proactive strategy with your money.  They can adjust allocations depending on market conditions and try to reduce risk and volatility.  The program can invest globally in stocks, bonds, real estate, and hard assets.  The fees are below 1% and the account minimum is $100,000.

ThomasPartners Strategies

ThomasPartners Investment Management is a division of Charles Schwab Investment Advisory Inc.  The division invests money under the dividend growth and balanced income strategies.  The goal of ThomasPartners is to help retirees cover their expenses with their invested assets.

Charles Schwab Bank Review

Charles Schwab Bank offers an array of traditional banking products.  These range from traditional checking and savings accounts, to home loans and refinancing.

Positives of Charles Schwab Bank

• High Interest Checking – Schwab Bank offers high interest checking accounts paying 0.20% as of when this is written. According to Schwab, this is higher than the checking account interest offered under Bank of America, Chase, Citibank, and Wells Fargo.  The checking account will link directly to your Schwab One brokerage account and you will be given rebates on ATM fees, which includes unlimited ATM fee rebates worldwide.  There is also no service fee for this account.
• High Yield Investor Savings Account – The high yield account offers no minimum balance requirement, no monthly fees, and an annual percentage of 0.40% as of when this is written. According to Schwab, these fees are higher than many other banks, but vary on the deposit amounts of other banks, as some banks pay higher interest rates based on deposit amounts.  The savings account offers unlimited free rebates for ATM withdrawals worldwide.
• Home loans – Charles Schwab offers a variety of home loans. These range from jumbo loans to traditional loans.  The interest rate options vary between fixed rate and adjustable rates mortgages.

Negatives of Charles Schwab Bank

• Because Charles Schwab Bank is a bit of an extension of the Charles Schwab brokerage account, the ability to manage cash is not convenient with Schwab. For this reason, anyone with a Charles Schwab bank account will likely need to have another bank account that is convenient for their cash.  There is no way to deposit cash into your Schwab account without first converting the cash to a money order or check.

Is Charles Schwab good for long term investors?

Yes.  Charles Schwab is a great platform for long-term investors.

Long-term investors don’t need sophisticated trading platforms, charting technology and other advanced tools.

Many investors  adhering to a long-term time horizon consider themselves buy and hold investors.  The main technology and research needed for these types of investors generally include fundamentals for companies, financials, and screeners.

Because long-term investors don’t care about short term moves of their investments, they don’t need sophisticated trading technology.  That being said, Schwab offers all the tools long-term investors need.

Their research is top-notch.  The star ratings by Charles Schwab can help investors find long-term equities, and the screeners offered through Schwab can help long-term investors screen for different fundamental data.

Charles Schwab VS. TD Ameritrade

Is Charles Schwab good for traders?

Yes. Charles Schwab has technology to help serious traders.

While I am not a proponent of short-term trading, Schwab does have the technology available to those who are sophisticated traders.

They offer technical / charting resources to help with research.

The StreetSmart suite of products offers powerful technology for traders.  Both StreetSmart Edge and StreetSmart Central provide enough technology for both equity traders and options traders.

Schwab also offers lower commissions for trades than its competitors, such as TD Ameritrade.  This can help reduce the cost associated with trading.

Charles Schwab review conclusion

I’ve had a Charles Schwab brokerage account for over ten years, and it is a premier broker offering a wide variety of research and technology for a range of investors.  They offer services and research for almost all investors – from the advanced trader to a novice investor.

Charles Schwab Intelligent Portfolios is a powerful robo-advisor with an extremely competitive lack of fees.  While the robo-advisor is attractive from a fee standpoint, it does have a high minimum compared to other standalone robo-advisors.

The low commissions of Charels Schwab are one of its most important features.  Many online brokers charge $6.95 per trade or higher.  Schwab beats them by $2, as it only charges $4.95 per trade.

For anyone who is an active trader, this low-fee structure can save a lot of money.

Anyone investing in just ETFs may not care about the low commissions for trades, since Schwab offers commission free ETFs.

For those searching for a more personal touch from their broker, Charles Schwab offers an assortment of advisory services.  These services range in price depending on the service and the amount of money invested.  It offers robo-advisory services for a low fee, a private client service which includes access to a team of professionals, and it even offers tactical and income strategies.

For an online broker, Schwab offers quite a lot of personalization and access to financial consultants and professionals depending on your assets under management.

Charles Schwab even offers banking services including checking and savings accounts, as well as HELOCs and home mortgages. If you have a Schwab One Brokerage account, you can take part in the banking features of Schwab.

Charles Schwab offers many platforms and services, which can be a bit overwhelming since there are so many features available to investors.  It takes some time to navigate and learn the features, as well as understanding the interface.

Once you become a client and start using the platform and/or different services, you will get the hang of the technology it offers.

Related Article: TD Ameritrade review: TD Ameritrade after the Scottrade Acquisition

Disclaimer: These are the ideas and opinions of the author.  The author is not responsible for the actions of those who read the posts on this blog.  Each individual reader has a unique situation and unique needs.  This blog is not intended to solve those unique situations of the readers.  This blog is not liable for decisions made by the readers of this blog.