A unique approach that combines retirement savings features in a single offering
Studies indicate that there are two keys to better results: cost and advice. That's why we've combined low-cost1 index funds, built-in independent third-party investment advice services,2,3 and a personalized saving strategy in a single offering—Schwab Index Advantage®.
Schwab Index Advantage offers an array of index investments for plan sponsor selection from the industry's largest fund providers.
- Index mutual funds available now; ETFs available soon2
- Variety of equity sizes, styles, and geographies, as well as fixed income and other asset classes3
- Intended to track established market indexes
Beyond investment advice, Schwab Index Advantage also helps employees create a plan and stay on track with:
- Savings recommendations
- Automatic savings increases
- Ongoing access to live assistance, when they need it5
Employees in Schwab Index Advantage have access to independent third-party investment advice services that provide them with:
- Allocation of plan assets to a portfolio based on the funds available in the plan and each employee's personal circumstances
- Diversification of their investments
- Automatic quarterly rebalancing when needed
- Portfolio realignment every year
- Deposit feature offered through Charles Schwab Bank for capital preservation
- FDIC insurance at participant level up to $250,000
- Daily liquidity
Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges, and expenses. You can request a prospectus by calling Schwab at 1-800-435-4000. Please read the prospectus carefully before investing. Past performance does not guarantee future performance.
1 For illustrative purposes only. The definition of "low-cost" is based on Schwab's research using (1) 2010 data from 195 defined contribution plans serviced by Schwab Retirement Plan Services, Inc. and Schwab Retirement Plan Services Company, and (2) 2010 data from a comparison set of plans serviced by other providers. In this comparison set, the weighted average operating expense ratio (OER) for midsize plans ($20 million-$100 million) using actively managed funds was $55 to $95 per $10,000 invested, and for large plans ($100 million-$350 million) the OER was $50 to $75 per $10,000 invested. For similar-sized plans adopting Schwab Index Advantage, the weighted average OER for index mutual funds or ETFs should be about $15 to $25 per $10,000 invested. This example does not include any fees associated with professional, independent advice services or other fees that may be charged to a participant account.
2 Product requires that Plan Sponsor select three proprietary Schwab Funds (Large Cap Blend, Small Cap Blend, and Foreign Large Cap Blend) as part of the five required asset classes in the Plan's fund lineup. The FDIC-insured deposit feature is also required. Index-based exchange traded fund product (ETF) is not yet available.
3 Schwab Bank Savings is a money market deposit account ("MMDA") at Charles Schwab Bank ("Schwab Bank"). A MMDA is a type of savings deposit. Schwab Bank Savings is only available in select retirement plans serviced by Schwab Retirement Plan Services, Inc. Funds deposited in the MMDA at Charles Schwab Bank are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 when aggregated with all other deposits held by a Plan Participant in the same capacity at Schwab Bank. Participants are responsible for monitoring the total amount of deposits that they hold with Schwab Bank, in order to determine the extent of deposit insurance coverage available to them on their deposits, including the MMDA. Participants may generally move funds into and out of the savings account at any time, however federal regulations require Schwab Bank to reserve the right to require seven (7) days' prior notice before allowing a withdrawal or transfer of funds from the savings account.
4 The savings and investment service provides participants with a retirement savings and investment strategy, a major component of which is a discretionary investment management service furnished by GuidedChoice Asset Management, Inc. ("GuidedChoice"), an independent investment advisor. GuidedChoice creates discretionary managed portfolios based on Modern Portfolio Theory using investment alternatives available in the plan. GuidedChoice is not affiliated with or an agent of Schwab Retirement Plan Services, Inc. ("SRPS"), Charles Schwab & Co., Inc. ("CS & Co."), or their affiliates. Neither CS&Co., SRPS, nor their affiliates supervise, make recommendations with respect to, or take responsibility for monitoring the services provided to participants by GuidedChoice. Schwab Advice Consultants, who are employees of CS&Co. and not of GuidedChoice, facilitate participant access to the GuidedChoice services, but do not provide investment advice or recommendations regarding the GuidedChoice services or generally as part of the advice services. Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market. There is no guarantee a participant's savings and investment strategy will provide adequate income at or through retirement. Fees are charged for the advice services, including its discretionary investment management service, based on the participant's account balance. Participants should carefully consider information contained in the disclosure materials furnished at the employer's direction regarding the services provided by Schwab and GuidedChoice, including information regarding compensation, affiliations, and potential conflicts.
5 Schwab Participant Service Representatives are available from 7:00 a.m. to 11:00 p.m. ET Monday through Friday.
6 Schwab Personal Choice Retirement Account (PCRA) is offered through Charles Schwab & Co., Inc. (Member SIPC www.sipc.org), the registered broker-dealer, which also provides other brokerage and custody services to its customers.