Charles Schwab “Schwab Intelligent Portfolios” Investigation

09.16.2021

Girard Sharp is investigating potential claims on behalf of investors in the “Schwab Intelligent Profiles” (“SIP”) program, following reports that this program may have substantially reduced returns on account of Schwab’s practice of allocating cash to client SIP accounts in order to increase Schwab’s own profits.

If you invested in “Schwab Intelligent Portfolios,” you may have a claim for relief.

Protect your rights by speaking with a Girard Sharp attorney. Call us toll-free at (866) 981-4800 or by filling out the form below.

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More Information on “Schwab Intelligent Portfolios”

In 2015, Charles Schwab launched its SIP program, which has since acquired almost $64 billion in client assets. SIP uses “robo-advisors” to invest funds. However, unlike other robo-advisor investment programs, SIP does not assess advisory fees. Instead, Schwab reportedly “sweeps” large cash allocations from client accounts into Schwab Bank, earning returns on those amounts at the expense of SIP investors.

By using this cash allocation strategy, Schwab is able to advertise that the SIP program requires no advisory fees. Schwab has reportedly profited substantially from this “Sweep Program,” which SIP investors are unable to opt out of.

In other words, Schwab allegedly profits off investors by realizing the investment gains from its practices, after attracting investors with a no-fee representation.

The SEC has opened an investigation of Schwab in relation to the SIP program, and recently reported that, in connection with its inquiry, Schwab’s “second quarter financial results will include a non-deductible charge of $200 million” (though Schwab’s “ultimate liability may differ”).

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We have recovered over a billion dollars for our clients against some of the nation’s largest corporations, such as Raymond James, Peregrine Financial Group, and Oppenheimer Funds, in cases arising from securities fraud, false advertising and other unfair business practices.   

For a free consultation about your potential claims, contact one of our investment fraud attorneys at (866) 981-4800 or by filling out the form above.

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