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Charles Schwab Switches To A Subscription-Based Payment Model For Financial Clients

April 10, 2019 Sarah Cavill

charles schwab

Another industry is moving to a subscription-based payment model. In a move industry insiders are speculating may be a game-changer, Charles Schwab implemented a subscription service for its financial planning customers.

“Cost and complexity are two of the biggest roadblocks to accessing financial planning, and our goal is to break down those barriers,” said Cynthia Loh, Charles Schwab Vice President of Digital Advice and Innovation. “These changes [moving to a subscription payment plan] are a result of client feedback and our commitment to meet consumer expectations for simplicity, transparency and value.”

A Subscription Payment Plan Is A Responsive Approach To Modern Client Demands

The new subscription-based payment plan from Schwab is called The Schwab Intelligent Portfolios Premium and replaces Schwab Intelligent Advisory. The new portfolio is a $30 monthly fee after an initial $300 payment for new customers, which Schwab is calling a planning fee. The fee does not change at higher asset levels. Existing customers who have reached 125k in assets have been moved over to the new plan and are not required to pay the planning fee.

Schwab’s financial planning services offer a variety of different digital planning tools, offering autonomy for clients. The addition of a subscription payment plan moves Schwab even further into this turnkey digital space. “This new pricing approach is part of our focus on making the investing and planning experience easier, more modern, and more approachable,” says Loh.

A Subscription Payment Plan Offers A Win For Schwab And Their Clients

charles schwab financial planning subscription

Prior to implementing a subscription payment plan, Schwab charged 0.28% of clients assets on a monthly basis. This new move by Schwab is intended to respond to the demands of a marketplace becoming more accustomed to subscription services, while providing a simple and transparent way for clients to pay.

Schwab has 300,000 accounts and $37 billion in combined digital advisory solutions. And while this is only a fraction of its $3.5 trillion in assets, the new subscription-based payment model could be scalable to millions of clients providing additional revenue, similar to other successful subscription based businesses that are experiencing growth. Financial insiders believe this new approach could ripple across the industry with other financial service businesses following suit.

“We’re going to look back at this day and say it was a monumental change in our business,” says Gavin Spitzner, president of industry consultant Wealth Consulting Partners.

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About the Author

Sarah Cavill

Sarah Cavill is a Marketing Communications Writer at Digital Media Solutions (DMS), the fastest-growing independent digital performance marketing company. DMS helps its clients accelerate growth by deploying diversified and data-driven customer acquisition solutions that deliver scalable, sustainable and measurable marketing results. DMS performance marketing solutions connect the right consumers with the right offers at the right time to achieve the marketing objectives of our clients. DMS is continually innovating to provide new and emerging media and technology solutions that minimize waste and maximize results across the most competitive industries. Since its inception, DMS has demonstrated incredible year-over-year growth which has earned recognition on the Inc. 5000 list in 2014, 2015, 2016, 2017 and 2018.

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