Schwab Switches to Subscription Model
The subscription model that’s being used globally by companies like Disney, Apple, Amazon and Netflix are now be supported by yet another major company, Charles Schwab Corp. The company, which on average handles $3.5 Trillion in assets announced in March that they’re moving over to a subscription model for their digital advisory services and financial planning options. This announcement will help make Schwab accessible to new clients across the United States.
The Digital Vice President at Charles Schwab Corp, Cynthia Loh, in an interview, stated: “We are making this change on behalf of our clients to be simpler and more transparent, but we’re also paying attention to the broader landscape. Customers are accustomed to subscription services.’’
$30 Monthly Fee
The Schwab Subscription model took effect on April 1st, and for nearly two months has been running optimally for clients. During their press junket, Schwab revealed that the yearly cost of their new service would be $300 and the monthly rate would be $30. Before the subscription-model, clients of Schwab’s services had to pay 0.28% of their monthly assets to use the service. The new rendition of their platform is called “Schwab Intelligent Portfolios Premium”, and it will automatically build portfolios for clients that exchange-traded funds.
It isn’t surprising to see Charles Schwab Inc switch over to the subscription model. All major companies in the technology, film and fitness industries have switched over to this modern-day model. This new subscription service will allow for Schwab to earn$9 Million yearly.
JMP Securities Analyst, Devin Ryan, commented to Finance Magnates about the new subscription-model by saying: “There aren’t many firms that have tens of millions of customers. That being said, for certain parts of the industry that are maybe tech-driven, incredibly scalable and could potentially service millions of people, absolutely I could see there being value to a subscription model.’
Tom Arran
