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Schwab (SCHW) Down on Robo-Advisor Probe, to Incur $200M Charge
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Charles Schwab’s (SCHW - Free Report) shares slid 1.1%, following the revelation of probe by the Securities and Exchange Commission (“SEC”) last week. In a filing, the company disclosed investigation related to the digital advisory platform - Schwab Intelligent Portfolios (SIP).
The company noted that it is cooperating with the SEC in the probe and “evaluating its options”. Given the development, Schwab expects to incur a “non-deductible charge of $200 million” in second-quarter 2021.
Also, the company stated that the actual “liability” related to this investigation might be different, “depending on the outcome of the matter.” Further, Schwab plans to “continue cooperating with the SEC with the goal of resolving this matter.”
The company’s robo-adviser or automated investment product allocates cash among exchange-traded funds based on formulations derived from client questionnaires. The SIP is an integral part of Schwab’s digital advisory services. As of Mar 31, 2021, it served approximately $64 billion in client assets, up 51% year over year.
Robo-advisors are becoming increasing popular among several Wall Street firms. Last month, JPMorgan (JPM - Free Report) acquired one of U.K.’s largest robo advisory firms, Nutmeg. Also, Goldman Sachs (GS - Free Report) rolled out its robo-advisor service — Marcus Invest — earlier this year. Even Citigroup (C - Free Report) unveiled a robo-advisor service last year for clients with least $50,000 at the bank.
Schwab continues to benefit from aggressive efforts to increase client base in advisory solutions. Despite lowering of fees on certain advice solution products by the company, revenues from the same are increasing as average client asset balances improve.
Over the past six months, shares of Schwab have rallied 23.3%, outperforming 21.8% growth recorded by the industry it belongs to.
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research SherazMian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Schwab (SCHW) Down on Robo-Advisor Probe, to Incur $200M Charge
Charles Schwab’s (SCHW - Free Report) shares slid 1.1%, following the revelation of probe by the Securities and Exchange Commission (“SEC”) last week. In a filing, the company disclosed investigation related to the digital advisory platform - Schwab Intelligent Portfolios (SIP).
The company noted that it is cooperating with the SEC in the probe and “evaluating its options”. Given the development, Schwab expects to incur a “non-deductible charge of $200 million” in second-quarter 2021.
Also, the company stated that the actual “liability” related to this investigation might be different, “depending on the outcome of the matter.” Further, Schwab plans to “continue cooperating with the SEC with the goal of resolving this matter.”
The company’s robo-adviser or automated investment product allocates cash among exchange-traded funds based on formulations derived from client questionnaires. The SIP is an integral part of Schwab’s digital advisory services. As of Mar 31, 2021, it served approximately $64 billion in client assets, up 51% year over year.
Robo-advisors are becoming increasing popular among several Wall Street firms. Last month, JPMorgan (JPM - Free Report) acquired one of U.K.’s largest robo advisory firms, Nutmeg. Also, Goldman Sachs (GS - Free Report) rolled out its robo-advisor service — Marcus Invest — earlier this year. Even Citigroup (C - Free Report) unveiled a robo-advisor service last year for clients with least $50,000 at the bank.
Schwab continues to benefit from aggressive efforts to increase client base in advisory solutions. Despite lowering of fees on certain advice solution products by the company, revenues from the same are increasing as average client asset balances improve.
Over the past six months, shares of Schwab have rallied 23.3%, outperforming 21.8% growth recorded by the industry it belongs to.
Schwab currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research SherazMian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>