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Human Touch Brings Calm to Schwab’s Robo Clients


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The robo-advisory business is booming as more enter the space, but many have been interested in how robo advisory clients reacted to the last week of August. While many robos provide investment guides, Charles Schwab’s Intelligent Portfolios stand out with a personal touch to help investors out if they want to talk to a live person.

While the recent bout of volatility and market mayhem may have shook investors’ confidence, Schwab’s services helped some wary clients from doing something they may have later regretted.

Looking at how robo-advisor clients reacted to the recent turmoil, Schwab was open to sharing some insights into investor interaction and trading.

“Clients are largely staying the course, reinforcing the idea that automated investing services help people remove emotion from the investing process and keep them focused on their longer term goals,” Tobin McDaniel, President of Schwab Wealth Investment Advisory, told ETF Trends.

With a steady hand, Schwab has provided a calming touch in an volatile market where emotions ran high.

Between August 21 through August 28, McDaniel pointed out that fewer than 1% of Schwab Intelligent Portfolios clients made changes to their risk profile, only a small percentage of clients called the phone team about the markets and even fewer had an online chat with Schwab about the markets.

“While a small percent of clients have contacted us, it’s noteworthy that it is still a significant increase from the average volumes we see, proving that there are times when clients want access to a live investment professional, even as part of a ‘robo’ service,” McDaniel added.

For instance, during the height of market volatility from August 21 through August 28, there was a 51% increase in the number of client calls, there was a 66% increase in the number of client online chats held and the most common client questions were about the markets in general and how the portfolios work during these periods of volatility, in particular regarding automatic rebalancing and tax loss harvesting.

While most robo-advisory business provide a clear cut-and-dried formula for people to ride the markets, there are times when talking through personal circumstances may benefit investment decisions.

While McDaniel admitted that there were a very few clients who did actually redeem or close their Schwab Intelligence Portfolios accounts, there were many more clients who added more money, and opened accounts were “many times more than that number.”

Robo advisor clients might find that just having the option of calling can serve to calm investors’ fears during those periods of market volatility.

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