Charles Schwab one of America’s largest retail stockbrokers is expanding the range of services it offers to UK investors, through the launch of its Managed Account Select product.
Managed Account Select is a separate portfolio that’s managed on the client’s behalf. Charles Schwab will assist in stock selection and also offer access to fixed-income investing and balanced strategies that are split across multiple asset classes.
In effect, this is a personalised wealth management service, which, according to Schwab is tailored to meet an investor’s goals, and is supported by disciplined investing principles, in-depth research, and insights from industry-leading experts.
Managed Account Select is largely focused on investment opportunities in the US markets, which these days account for the majority of global stock market capitalisation.
How do you qualify for Managed Account Select?
To qualify for an account investors will need to deposit a minimum of $100,000 or its equivalent, to secure a managed equity account.
However, to access either a fixed-income or balanced account they will need to invest $250,000 or more.
Charges start at 1.00% per annum for the equity account, and at 0.65% and 0.95% respectively for the fixed-income and balanced strategy pots.
Managed Account Select isn’t limited to just Charles Schwab products
If you are not just investing in single stocks Schwab offers a choice of funds from 10 external managers, on top of its own funds. The external managers have all been vetted by Schwabs analysts, who use qualitative and quantitative screens to inform their selections.
For those UK clients who want a higher level of personal service Schwab also offers Schwab Wealth Advisory which matches customers with a dedicated advisor. However, to qualify for this service you will need to be able to invest $1.0 million or more and fees start at 0.80% per annum.
The UKs wealth management industry is growing
According to data from PIMFA, the Personal Investment Management & Financial Advice Association the UK wealth management market manages £950 billion in assets with another £272 billion being managed with the help of a financial adviser.
£1.20 trillion pounds is a significant sum of money and clearly, it’s enough to attract Charles Schwab to this side of the Atlantic.
Richard Flynn, UK Managing Director at Charles Schwab, told us exclusively:
“The economic climate means investment advice could be particularly valuable for investors right now. The topsy-turvy nature of US markets so far in 2023 has meant that the stocks that fell the most in 2022 have been outperforming over the past couple of months. In these conditions, it remains crucial for investors to know what they are buying—especially as it relates to growth, value, and quality.
“Our new financial advice solutions for UK investors will allow our clients to access a wide range of professionally managed USD portfolios. Schwab Managed Account Select provides clients with access to a variety of focused investment strategies, and Schwab Wealth Advisory offers a personalised wealth management service tailored to investors’ goals.”
However, the UK’s wealth management business is well established and there is plenty of domestic competition for clients and assets already. Whether thats from traditional managers, Robo-advisors or the Direct to Consumer (D2C) platforms.
Schwab’s principal selling point will presumably be its knowledge of and experience in the US markets, Self-determined investors can probably find lower costs ETFs that will provide a similar asset allocation strategy to the Schwab services.
However, if you have the cash and you want to be advised on investing in the US from the UK then this could be the service for you.