No Trade-offs: Give customers everything they want as cheaply as possible


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XY planning Network XYPN deployed successfully a subscription based offer for financial advisors in the US, 5years ago. They actually celebrated their 5yr birthday on April 4th with 900 members that use the service. This is evidence that a subscription service for financial advice works at the B2B2C level.

On the 28th of March, Charles Schwab took the subscription service of financial advice to another scale.

Charles Schwab subscription service rhymes with Apple`s news service.

For $30 a month, Schwab offers a financial planning package.

Schwab Intelligent Portfolios Premium (rebranded name) is offered at $30 a month after a one-time $300 fee with a $25k minimum. Asset allocation is from a universe of 50+ ETFs, including a financial plan with a customized roadmap and unlimited one-to-one guidance from a CFP professional. Regulated financial-investment advice at $630 a year.

Schwab Intelligent Advisory (the original robo name) was at 28bps per annum 0.28% of assets.

Think of the 300,000 Schwab Intelligent Advisory accounts ($37 billion). Some will remain in the free, no-advisory offering. But a significant part will switch over to Schwab Intelligent Portfolios Premium and get advice.

Evidently, any account with enough assets ($125k seems to be the magic number) will switch over.

What will this move do to the rest of the large players?

When will Vanguard follow suit?

This is another discount brokerage moment in the investment industry. This is the subscription financial advice retail moment.

Eric Balchunas, the Bloomberg Intelligence analyst, has baptized the fee war that has been going on in the US, “the Vanguard Effect” simply because the major ETF producers rush to cut their fees, responding systematically to the lead of the 43yr old low-cost producer.

Now the Vanguard Effect` for financial advice is upon us but led by Schwab.

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[1] “You’re able to get extraordinary quality at extraordinary value now,” Bettinger says. “That’s where our industry is. And in reality, that’s where the whole economy’s going.”
Bettinger is president of the Charles Schwab Corporation

I have no positions or commercial relationships with the companies or people mentioned. I am not receiving compensation for this post.

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№1 Finance Global Woman Influencer by Refinitiv 2020 & 2019. Fintech & Blockchain Advisor: 30yrs FINANCE; #fintech #blockchain

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