Advice Becomes Standard Operating Procedure On Most Schwab 401(k) Plans
- Created: Monday, 12 September 2011 05:43
Schwab recently crunched its internal numbers and determined that 81% of the plans on its platform offer participant advice.
Of course, since these plans are on Schwab's platform, that probably means most (if not all) of them are taking advantage of its relationship with GuidedChoice as the advisor of record on those accounts.
GuidedChoice advice is essentially free as a perk to Schwab plan sponsors, who might otherwise have to pay a few dollars a year for every $1,000 in assets for the service.
Because Schwab eats the cost, that makes it incredibly tricky for other advisors to get a piece of that business. It's just hard to compete with "free."
Schwab has pointed out that GuidedChoice boosts participation by at least 10% and roughly doubles contribution rates. Those are the real selling points to the plan sponsors.
Any advisor hoping to add extra value to a plan on the Schwab platform is going to have to promise even better metrics to get the sponsor to pay.
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