Schwab to use AI for personalized advice for smaller investors

Charles Schwab plans to use artificial intelligence to deliver the personalized wealth guidance it currently reserves for clients with at least $1 million to a broader set of retail customers, Wurster told interviewer David Rubenstein. “Using AI, we’ll be able to offer them some of the same personalized insights that we’re giving every day in our branches and in our dedicated relationships.”

Schwab requires a minimum of $1 million for a “dedicated relationship,” and most clients fall below that threshold. Wurster noted AI will allow the firm to scale the individualized guidance now available in branches and dedicated relationships.

Earlier this month Schwab introduced a generative-AI tool for customers that combines portfolio performance data, market news and Schwab analyst commentary. The product is designed to synthesize these sources into concise explanations and insights about investors’ holdings and market developments.

As of March, Schwab managed about $12 trillion in client assets and had more than 39 million active brokerage accounts. The company is based in Westlake, Texas and is 55 years old.

Wurster called AI a “real accelerant” for the firm and argued the technology will help rather than hurt Schwab after recent concerns about disruption in the wealth-management business affected its shares.

Schwab’s use of AI follows a long trend of lowering barriers to investing. The firm focused on retail customers after the Securities and Exchange Commission eliminated fixed commission rates in 1975, and the past two decades saw other brokerages expand low- or no-cost trading.

On his long-term plans, Wurster expressed that he loves the company and does not plan to leave soon, and added he would consider public service after he retires.