In another move aimed at repositioning itself as a full-service investment powerhouse, Charles Schwab & Co. has begun offering investment advice through its branch network and over the phone.
The new service, Schwab Portfolio Consultation, pairs customers with Schwab's investment specialists to discuss short- and long-term financial goals, review investments, and perhaps receive recommendations, the San Francisco-based company said.
The service costs $400 and a Schwab brokerage account is required.
The move to provide investment advice, albeit on a limited basis, comes two months after the company that pioneered the mutual fund supermarket said it would merge with U.S. Trust Corp., which caters to high-net-worth clients. This is Schwab's latest effort to shrug off its image as only a discount brokerage.
"They're definitely moving more toward the full-service area. That's where the money is," said Dan Burke, senior analyst with Gomez Advisors Inc. of Concord, Mass.
Schwab already provides several tools to help customers make investment decisions, but it had always stopped short of providing advice. The company has been widely expected to launch an advice-driven model that could put it on a more level playing field with full-service competitors such as Merrill Lynch & Co., said Dennis Gallant, a consultant with Cerulli Associates Inc. of Boston.
The new service is "not as fully integrated as the Merrill Lynch model, but it's a step closer," he said.
Nor is it likely to be a major money-maker for Schwab, said Ellen McKay, principal at Optima Group Inc., a consulting firm in Fairfield, Conn.
However, Schwab Portfolio Consultation should enhance the company's value in customers' eyes. "Whether people use them or not, they like to think you have all these things," she said.
But the service could also put Schwab at odds with its network of financial advisers who buy funds through its supermarket. "This is as close as they've ever come to being in direct competition with their adviser client base," Ms. McKay said.
That concern is not lost on Schwab. In an advertisement that appeared in Tuesday's issue of The Wall Street Journal, the company affirmed its commitment to that channel.
"At Schwab, we strongly believe that independent, fee-based investment advisors provide one of the best solutions for investors seeking in-depth professional guidance," the text said.
