Please read the Schwab Intelligent Portfolios disclosure brochure at Schwab.com/transparency/advisory for important information, pricing, and disclosures relating to the Schwab Intelligent Portfolios program.
Portfolio Management for the Schwab Intelligent Portfolios is provided by Charles Schwab Investment Management, Inc. ("CSIM"), a registered investment adviser and an affiliate of Charles Schwab & Co, Inc. ("Schwab"). CSIM and Schwab are separate entities and subsidiaries of The Charles Schwab Corporation.
There is no advisory fee or commissions charged for Schwab Intelligent Portfolios. Investors enrolled in Schwab Intelligent Portfolios do pay direct and indirect costs. These include ETF operating expenses which are the management and other fees the underlying ETFs charge all shareholders. Schwab does not charge an advisory fee for the SIP Program in part because of the revenue Schwab Bank generates from the cash allocation (an indirect cost of the Program). The portfolios include a cash allocation to FDIC‐insured Deposit Accounts at Charles Schwab Bank, SSB ("Schwab Bank"). Schwab Bank earns income on the deposits, and earns more the larger the cash allocation. The lower the interest rate Schwab Bank pays on the cash, the lower the yield. Some cash alternatives outside of Schwab Intelligent Portfolios pay a higher yield. Schwab Intelligent Portfolios invests in Schwab ETFs. A Schwab affiliate, Charles Schwab Investment Management Inc., receives management fees on those ETFs. Schwab Intelligent Portfolios also invests in third-party ETFs. Schwab receives compensation from some of those ETFs for providing shareholder services, and also from market centers where ETF trade orders are routed for execution. Fees and expenses will lower performance, and investors should consider all program requirements and costs before investing. Expenses and their impact on performance, conflicts of interest, and compensation that Schwab and its affiliates receive are detailed in the Schwab Intelligent Portfolios disclosure brochure. Certain conditions must be satisfied for FDIC insurance coverage to apply. Charles Schwab & Co., Inc. and Charles Schwab Investment Management Inc. are not FDIC-insured banks and deposit insurance covers the failure of an insured bank.
The cash allocation in Schwab Intelligent Portfolios will be accomplished through enrollment in the Schwab Intelligent Portfolios Sweep Program (Sweep Program), a program sponsored by Charles Schwab & Co, Inc. By enrolling in Schwab Intelligent Portfolios, clients consent to having the free credit balances in their Schwab Intelligent Portfolios brokerage accounts swept to FDIC-insured Deposit Accounts at Charles Schwab Bank, SSB through the Sweep Program. Funds deposited at Charles Schwab Bank, SSB are insured, in aggregate, up to $250,000 per depositor, for each account ownership category, by the Federal Deposit Insurance Corporation (FDIC). The interest rate on cash balances in the Sweep Program is set on the first business day of each month equal to the seven-day yield (with waivers) for the Schwab Government Money Fund – Sweep Shares (symbol: SWGXX) as determined at the end of the prior month. See Current Interest Rates for more details. Charles Schwab Bank, SSB is affiliated with Charles Schwab & Co., Inc. and Charles Schwab Investment Management, Inc. Certain conditions must be satisfied for FDIC insurance coverage to apply. Charles Schwab & Co., Inc. and Charles Schwab Investment Management Inc. are not FDIC-insured banks and deposit insurance covers the failure of an insured bank.
Schwab Intelligent Portfolios is designed to monitor portfolios on a daily basis and will also automatically rebalance as needed to keep the portfolio consistent with the client's selected risk profile. Trading may not take place daily.
Tax‐loss harvesting is available for clients with invested assets of $50,000 or more in their account. Clients must choose to activate this feature. The tax‐loss harvesting feature available with Schwab Intelligent Portfolios is subject to limitations which are described on the Schwab Intelligent Portfolios website and mobile application (collectively, the "Website") as well as in the Schwab Intelligent Portfolios disclosure brochure. You should consider whether to activate the tax‐loss harvesting feature based on your particular circumstances and the potential impact tax‐loss harvesting may have on your tax situation. Please read the tax‐loss harvesting disclosures on the Website and in the brochure before choosing it. Neither the tax‐loss harvesting strategy, nor any discussion herein is intended as tax advice, and neither Charles Schwab & Co., Inc. nor its affiliates, including but not limited to Charles Schwab Investment Management, Inc., represents that any particular tax consequences will be obtained. For more information please visit the IRS website at www.irs.gov.
Diversification, asset allocation, automatic investing and rebalancing strategies do not ensure a profit and do not protect against losses in declining markets.
