Schwab Intelligent Portfolios – My 5 Year Results

I’m always looking to try new and easier ways to invest. I currently use Schwab as my brokerage account, so a few years ago, I came across their version of a “RoboInvestor” called Schwab Intelligent Portfolios. The idea is simple. Put money in this brokerage account, put in some information, and the “Robo Advisor’ does the rest. Five years later, I’m ready to share my results.

What Exactly Is a Robo Advisor?

Robo Advisors are basically algorithm-driven investing tools meant to have as little human supervision as possible. Basically, it means there is essentially a computer analyzing tons more information a person ever could and adjusting your portfolio accordingly. 

This doesn’t typically mean that if you open an account that uses a Robo Advisor you’ll see tons of trades going on every day. More often than not, the accounts are periodically rebalanced to make sure that the investments in the portfolio are on track to meet the client’s specific goals.

Schwab Intelligent Portfolios Costs and Fees

You might think that using such an advanced investing tool would cost you a pretty penny. I can tell you from experience, that the Schwab Intelligent Portfolio doesn’t cost you a dime. The only fees you pay aren’t from Schwab, just the normal expense ratios from the funds you are invested in, which you would pay normally. 

I don’t have the premium account, and I believe there are extra fees associated with it, but you get more services that come along with it as well.

Schwab Intelligent Portfolio Performance

So let’s get into what matters most, how did my investments perform? From a pure financial returns standpoint, I’d say pretty good:

Schwab Intelligent Portfolios Performance
Pretty good returns!

Seeing a 76% return on any investment should be considered a success, unless…

Schwab Intelligent Portfolios Performance wIndex

Take a look at my gains as opposed to the S&P 500 and Russell 2000, they almost double my gains. In this regard, my investments left a lot on the table I could have gained by simply investing in index funds.

But, That’s Not the Whole Story

Remember that I had to enter a bunch of information when signing up? Some of that information was my target amount and date. This is what the Robo Advisor uses to decided my portfolio allocations. With the information given to it, the Robo Advisor was actually pretty spot on (according to its own calculations of course).

With my initial investment, target date, and amount, my Intelligent Portfolio was only set to about 62% stocks, then cash and bonds, so there was no way I’d see the same returns as simply investing in index funds.  For my specific goals, the Robo Advisor seems to be working.

So Should I Use a Robo Advisor?

I guess it comes down to a matter of preference and your overall goals. For long-term investing, I still think the best options are low-cost index funds, you really can’t go wrong. However, if you are looking for a more targeted investment strategy, the Intelligent Portfolios could be the way to go. They don’t cost extra and you’ll get automatic rebalancing to ensure you are on track to meet your goals. 

What’s Next for Me?

Well, I saw the results on my medium-risk portfolio, now I know I need to update my goals. I’ve up my target balance by over 15k and left the timeline the same. I saw the rebalancing of my portfolio happen automatically. I still won’t see the gains I would by simply using index funds, but if the market takes a downturn, my losses could be less as well. Guess, I’ll see you again in 5 years!


Jeff is a fan of all things finance. When he's not out there changing the world with his blog, you can find him on a run, a Mets game, or just playing around with his kids