Charles Schwab Review – Modern Retirement and Investing Solutions

Charles Schwab has become a household name in the financial community, offering decades of top-notch services no matter how you take part in the market, from investing to day trading. Since its inception in 1971, the company has grown to serve more than 33 million investing accounts. 

And it continues to grow. 

With the recent acquisition of TD Ameritrade, Schwab has consolidated two of the most respected brokerages on the stock market. It should come as no surprise that so many people say the company is one of the best online brokers. 

But what’s driving Schwab’s popularity, and should you open a new Schwab account?

Key Features of Charles Schwab

There’s quite a bit to talk about when it comes to features offered by Schwab. Here’s a list of the features investors rave about:

Account Types

Charles Schwab offers a wide range of investment account types, all falling into four distinct categories. See the chart below for details:

Keep in mind that choosing the type of investment account you’ll use is an important process that may have significant tax implications. If you’re considering opening a tax-advantaged account like a retirement or educational account, take a moment to read IRS guidance or speak to a tax professional to get an understanding of tax benefits, limitations, and requirements first. 

Trading Platforms

Schab has been a go-to choice among traders and investors alike for decades, and for good reason. The company offers several trading platforms ranging in functionality. For the end user, that means you’ll likely find a platform that fits your needs as either a trader or investor. 

Here are the different platforms available:

Schwab One (Schwab.com) 

Charles Schwab’s flagship web trading platform is best for the long-term investor who doesn’t need advanced trading tools, but is more focused on what’s driving their portfolio and the market overall. 

The platform offers one of the best stock screeners on the market as well as up-to-date news on each stock you look into. It also features a unique tool called the All-In-One Stock Ticket that gives you the ability to trade multiple financial products at once. 

You’ll also be able to keep tabs on your net worth with an option to connect your external accounts to your Schwab.com platform. 

Of course, as with any other trading platform, you’ll have access to real-time market data as well as basic charting capabilities. Unlike many others, these tools are both intuitive and easy to use, reducing the learning curve for beginners who want to get involved in the market. 

Schwab Mobile App 

The Schwab Mobile trading app is available on Android or Apple iOS devices and offers a mobile version of the company’s web trading platform. Mobile users are able to access all features and tools available on the web-based platform while they’re on the go. 

StreetSmart Edge

If you’re an active trader, you know that the basic tools provided by discount, web-based trading platforms just don’t fit the bill. You need technical analysis, quality charting capabilities, and the ability to analyze short-term trends. 

That’s what StreetSmart Edge was designed for. 

The stock trading platform is a software that offers state-of-the-art trading technology to help you get a leg up in the market. On the platform, you’ll find a wide range of indicators and can customize your dashboard to make sure the information that’s important to you is available at a glance. You can also link multiple tools to make finding and capitalizing on trading opportunities a simple process. 

The StreetSmart Edge platform also has advanced features for options traders in a section known as StreetSmart Central. The added features include Idea Hub — a tool for helping you find the types of options trading opportunities you’re looking for — trade and probability calculators, and the ability to create options chains and auto-adjusting limit orders.  

StreetSmart Mobile

StreetSmart Mobile is the mobile version of Schwab’s StreetSmart Edge platform. Like the flagship web and mobile platforms, the StreetSmart Mobile platform offers on-the-go access to all the features found in the StreetSmart Edge software. 

Available Self-Directed Investment Products & Trade Commissions

Schwab self-directed portfolios give investors and traders access to a wide range of asset classes at highly competitive pricing. 

Stocks & ETFs

Charles Schwab was one of the pioneers in the field of commission-free stock trading. Today, it facilitates commission-free trades on all United States stocks and exchange-traded funds (ETFs), including over-the-counter (OTC) stocks, as well as trades in select foreign markets. 

Mutual Funds 

Schwab gives you access to thousands of mutual funds through Schwab Mutual Fund OneSource with no transaction fees or commissions. You will pay commissions when trading other mutual funds. While most funds come with a commission of around $50, the firm states on its website that fees on some funds can be as high as $74.95. 

Fixed-Income Securities

Schwab offers fixed-income securities including government bonds, corporate bonds, and annuities. The transaction fees for these investments depends on the type and size of the order you make. However, Schwab’s fixed-income costs are generally significantly lower than the industry average. 

Cryptocurrency

Schwab does provide access to cryptocurrency, but not directly. Schwab users can’t purchase crypto directly, but do have access to several cryptocurrency ETFs and mutual funds. Trading these funds involves paying the expense ratio associated with the ETF and any fees for mutual fund transactions (usually $0). 

Margin Trading

Schwab offers customers with sufficient assets access to margin trading, a way for speculative traders to increase the potential profitability of their moves in the market. Margin traders borrow funds from the broker in order to magnify their returns, whether positive or negative. 

Adding margin trading to your account is simple. Just click “Service,” “Account Settings,” and “Options & Margins.” From there, you’ll be able to see if your account qualifies for margins. If so, simply turn the feature on. 

If your account doesn’t qualify for margins, it’s likely due to a low balance. You’re required to maintain a minimum balance of $2,000 in your account to borrow money for your trades. Once the account is approved for margin privileges, you’ll be able to borrow up to a 50% margin level. 

Margin trading isn’t for everyone. Unfortunately, Schwab’s margin rates — the interest you pay on what you borrow — are on the higher end of the spectrum, which may be a turn-off for some investors. Also, only traders with sophisticated knowledge of technical and fundamental analysis should consider trading on margin because it’s possible to lose more than your initial investment amount if things go wrong. 

Your Complete Financial Picture

When it comes to finances, it’s important to consider the complete picture when making any moves. Schwab is no stranger to this concept and is one of few brokers that makes it possible to connect external accounts to your brokerage account, giving you the ability to track your net worth in real time. 

Managed Portfolios

Schwab offers two types of managed portfolios: Managed ETF Portfolios and Managed Mutual Fund Portfolios. These are diversified portfolios constructed and managed for you by the experts at Schwab. With both options, you’ll have access to a team of investment consultants.

Managed Mutual Fund Portfolios

There are 24 model portfolios to choose from, offering both taxable and tax-aware options. The portfolios also take on different strategies that range from conservative income to aggressive growth portfolios. As with any managed portfolio, you’ll also have the benefit of the experts managing your investments for you, taking the tough decisions out of your hands. 

In order to qualify for Managed Mutual Fund Portfolios, you must have a minimum account balance of $25,000. The fee structure is as follows:

Managed ETF Portfolios

Like with Managed Mutual Fund portfolios, there are several Managed ETF Portfolios to choose from, each focused on different investing models. All told, 12 different models give you the ability to find the right balance between income and growth. 

These portfolios are highly diversified, both in terms of stock diversification and asset allocation, with some investing in assets like real estate and commodities. At the same time, you can rest assured that your portfolio will stay in balance as the experts keep a close eye on what’s happening inside of it. 

In order to qualify for Managed ETF Portfolios, you’ll need to have a minimum account balance of $25,000. Moreover, the fee structure for these investments is as follows:

Schwab Intelligent Portfolios

Schwab also offers a robo-advisor service known as Schwab Intelligent Portfolios. The service uses an advanced algorithm to build, monitor, and rebalance your portfolio, acting as an automated investment advisor.  

All you need to do is sign up and answer a quick questionnaire about your investment goals. From there, Intelligent Portfolios will create the best course of action for you, outlining how much money you should be investing on a monthly basis and taking care of asset allocation for you. 

If you miss a contribution or need to tap into your investments, that’s OK; Intelligent Portfolios will guide you through making adjustments to help you stay on track. 

Intelligent Portfolios Premium

Do you want a mix of a robo-advisor and a highly-trained human working on your behalf? Schwab Intelligent Portfolios Premium is made for you. You’ll get all the benefits of the robo-advisory services along with access to a real-world Certified Financial Planner. 

If you’d like to go premium, you’ll pay a one-time portfolio setup fee of $300 and a monthly advisory fee of $30. 

Research & Education

All Schwab customers gain access to some of the most robust research and educational resources on the market today. The company knows that its success depends on your success and has invested massive amounts of time and money into tools to help ensure you have the education and training you need. 

The company’s articles and videos cover a wide range of topics and are designed to turn the beginner into an expert while giving the experts something to look forward to as well. 

Aside from the robust educational platform offered, you’ll also have access to in-depth research tools. Not only does Schwab make its proprietary research available to its investors and traders, it also offers analyst opinions from third parties like Morningstar and Reuters. 

Large Network of Physical Branches

It’s nice to be able to walk into a physical branch and talk to a human being, face to face, about what’s going on in your account and your goals. With Schwab, you can. There are currently over 300 physical branches located throughout the United States. 

Advantages of Charles Schwab

Charles Schwab has become one of the world’s leading brokers for several reasons. Some of the biggest benefits to the company’s services include:

• Commission-Free Trading. Why would you want to pay trading commissions if you don’t have to? Schwab’s commission-free trading on stocks and ETFs is a massive draw for the investing community. 
• Quality Trading Tools. Whether you’re investing or trading, you’ll find the tools you need to find and take advantage of opportunities in the stock market on one of Schwab’s five trading platforms. Enjoy best-in-class stock screeners, trading indicators, charting capabilities, and fundamental analysis tools. 
• Customize Your Approach With Little Work. Using Schwab Intelligent Portfolios, you’ll be able to customize your approach to making money in the market without taking part in the daunting task of finding and analyzing opportunities on a one-by-one basis. 
• See Your Entire Financial Picture. No matter which platform you use, you’ll be able to connect external accounts to see your entire financial picture, not just what’s happening in your Schwab brokerage account. 

Disadvantages of Charles Schwab

Every rose has its thorns, and Schwab is no different. Some of the drawbacks to working with this broker include:

• Margin Rates. If you’re interested in trading on margin, you may want to look elsewhere. The company’s margin rates are on the high side. 
• No Forex. Currency traders will be disappointed to find that there are no forex capabilities in the platform. 
• Limited Cryptocurrency. You won’t be able to buy and sell cryptocurrency directly or take your crypto holdings off the platform. Instead, access to crypto assets is available only through cryptocurrency-based ETFs and mutual funds. 

How Charles Schwab Stacks Up

Charles Schwab is clearly one of the best online brokers of today, but how does it stack up against another leader? Here’s a quick look at Schwab vs. Fidelity:

Final Word

Charles Schwab is a long-standing broker with a history of providing top-notch services to its customers. Whether you’re an active trader or a passive investor, the trading platforms offered by Schwab will more than likely meet your needs. 

While people interested in trading forex and cryptocurrency may want to look elsewhere, those looking for low-cost access to more traditional assets for individual investments, trading, or retirement saving will benefit greatly by working with Schwab.