By Andrew Welsch

Charles Schwab is joining the ranks of financial services firms pulling the plug on robo-advisor offerings.

The Westlake, Texas-based company is phasing out Schwab Intelligent Portfolios Premium, which combines automated investment management with access to human financial planners. Schwab has closed the service to new clients and will cease operating it for existing clients in the first quarter of 2026.

A spokeswoman for the company confirmed the change, which was earlier reported by The Daily Upside.

Schwab isn't exiting digital advice entirely, however. It will continue to offer its stand-alone robo-advisor, Schwab Intelligent Portfolios.

"We believe in the power of digital advice, and our automated investing service, Schwab Intelligent Portfolios, remains available to current and new clients," the spokeswoman said.

Schwab's digital advice offerings, which includes both hybrid and stand-alone, had nearly $100 billion in assets under management as of the third quarter, although the company didn't break out how many assets were in the hybrid offering.

Premium customers are being given a complimentary planning session to update their financial plan and still have access to the pure digital service, according to Schwab, which is one of the nation's largest brokerage and wealth management companies. Schwab doesn't charge an advisory fee for Schwab Intelligent Portfolios. Customers can open a Schwab Intelligent Portfolios account with a minimum of $5,000. The premium tier cost $30 a month plus a one-time $300 planning fee, and it had a $25,000 minimum.

Schwab also has a full-service wealth management offering, Schwab Wealth Advisory. The company charges an annual fee of 0.80% on assets under management, which decreases at higher asset levels. It has a $500,000 minimum.

Robo-advisors arrived on the scene about 15 years ago, offering investors automated and professionally managed portfolios at a fraction of the cost of traditional human financial advisors. Most charge an annual fee of about 0.25% of assets under management, a significant discount to human advisors' typical 1% fee. However, attracting customers and achieving scale hasn't been easy, and some companies have thrown in the towel on robo advice. In October, for example, U.S. Bank discontinued its robo-advisor, Automated Investor. And earlier this year, UBS said it was winding down its purely digital robo-advisor.

"We are seeing a clear shift where many traditional banks and brokerages are retreating from proprietary, mass-market robo products to prioritize higher-margin wealth management," says David Goldstone, manager of investment research at Condor Capital Wealth Management and author of a report on robo-advisors.

Goldstone adds that hybrid digital advice offerings like the one Schwab is phasing out are more difficult to scale compared with pure digital offerings. "When you are offering access to CFP-credentialed advisors, you need to continue to hire advisors as you bring on more clients," he says.

Companies that have found success with digital advice, such as Schwab (with its stand-alone robo) and Vanguard, tend to have large brokerage platforms. Robinhood Markets launched a robo-advisor earlier this year that features active stock-picking as part of its portfolios.

Betterment and Wealthfront, two of the pioneers of digital advice, have remained independent companies. And Wealthfront became a publicly traded company this month.

Write to Andrew Welsch at andrew.welsch@barrons.com

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December 18, 2025 14:17 ET (19:17 GMT)

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