Schwab Expands Relationship with Morningstar to Include 401(k) Managed
Employers will have choice of managed account providers when implementing
Schwab’s index-based 401(k) plan offer
SAN FRANCISCO -- April 23, 2013
Schwab Retirement Plan Services, a Top 10 401(k) provider* to approximately
1.6 million workers saving through company retirement plans, today announced
the addition of Morningstar Associates, LLC (Morningstar) as a managed account
provider for Schwab Index Advantage^®, an innovative retirement plan solution
combining low fund investment expense^1 with personalized savings
recommendations and investment management designed to help workers better
prepare for retirement. Morningstar Associates is part of the Morningstar
Investment Management division.
Morningstar will join GuidedChoice as a fully integrated provider of managed
account services to workers saving for retirement through Schwab Index
Advantage. Employers will be able to choose Morningstar’s managed account
services once the integration with Schwab Index Advantage is completed, which
is expected later this year.
Long History with Both Providers
“We have a long history of offering both Morningstar and GuidedChoice 401(k)
advice to participants in the traditional 401(k) plans we service. We are
pleased now to be able to offer our Schwab Index Advantage clients a choice of
these two advice providers,” said Steve Anderson, executive vice president,
Schwab Retirement Plan Services.
“We are excited to be part of this innovative 401(k) offering. With
Morningstar’s managed account services,participants can receive personalized
savings and investment advice recommendations that we believe can make a real
difference in helping them meet their retirement goals,” said Brock Johnson,
president of retirement solutions for Morningstar Investment Management.
"The growth of Schwab Index Advantageshows strong market demand for high
quality investment services at a low cost, including unbiasedsavings and
investment advice using low-expense funds. The addition of Morningstar will
continue to expand Schwab's reach andenable even more workers to receive
professional management in their retirement plans," said David Bernard, chief
client officer, GuidedChoice.
Schwab Index Advantage
Schwab Index Advantage integrates 401(k) features in a unique way to help
workers save and invest for retirement. To help drive costs down, Schwab Index
Advantage includes index mutual funds with low fund operating expenses instead
of the often more expensive actively managed mutual funds found in many 401(k)
plans. Focusing on simplicity, the program includes a professional, low-cost,
independent managed account service that develops an ongoing personalized
savings and investment strategy for individuals.^2 Once the Morningstar
services are implemented, employers will be able to choose Morningstar or
GuidedChoice to provide managed account services to their employees.
The level of integration of the managed account services will be the same
regardless of whether an employer chooses Morningstar or GuidedChoice for
Next: ETFs in Schwab Index Advantage
Schwab Retirement Plan Services is also developing a version of Schwab Index
Advantage that will provide index-based exchange-traded funds (ETFs) in the
investment lineup so employers will ultimately have a choice – index mutual
funds or ETFs. Schwab expects to launch the ETF version of Schwab Index
Advantage later this year. Morningstar and GuidedChoice both will be available
for clients choosing the ETF version as well.
“Fund operating expenses for index ETFs are often lower than those of index
mutual funds.We believe integrating ETFs into a 401(k) lineup can offer fund
options that drive fund operating expenses down further and provide workers
with the opportunity to save even more for retirement,” Anderson said.
Employers interested in learning more about Schwab Index Advantage should
visit rethinkyour401k.com or call Schwab at 877-223-7036.
Investors should carefully consider information contained in the prospectus,
including investment objectives, risks, charges and expenses. You can request
a prospectus by calling Schwab at 800-435-4000. Please read the prospectus
carefully before investing.
About Charles Schwab
The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial
services, with more than 300offices and 8.9million active brokerage
accounts, 1.6million corporate retirement plan participants, 888,000banking
accounts, and $2.08trillion in client assets as of March 31, 2013. The
companywas ranked ‘Highest in Investor Satisfaction With Self-Directed
Services’in the 2012 US Self-Directed Investor Satisfaction Study^SM from J.D
Power and Associates. Through its operating subsidiaries, the company provides
a full range of securities brokerage, banking, money management and financial
advisory services to individual investors and independent investment advisors.
Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC,
www.sipc.org), and affiliates offer a complete range of investment services
and products including an extensive selection of mutual funds; financial
planning and investment advice; retirement plan and equity compensation plan
services; compliance and trade monitoring solutions; referrals to independent
fee-based investment advisors; and custodial, operational and trading support
for independent, fee-based investment advisors through Schwab Advisor
Services. Its banking subsidiary, Charles Schwab Bank (member FDIC and an
Equal Housing Lender), provides banking and lending services and products.
More information is available at www.schwab.com and www.aboutschwab.com.
Schwab Retirement Plan Services is comprised of Schwab Retirement Plan
Services, Inc. and Schwab Retirement Plan Services Company, which provide
recordkeeping and related services with respect to retirement plans. Schwab
Retirement Plan Services, Inc., Schwab Retirement Plan Services Company,
Charles Schwab Bank, and Charles Schwab & Co., Inc. are separate but
affiliated companies and subsidiaries of The Charles Schwab Corporation.
Brokerage products and services are offered by Charles Schwab & Co., Inc.
Trust, custody and depositproducts and services are available through Charles
GuidedChoice is an independent investment advisory firm specializing in
investment advice, managed account services and strategic solutions for
corporate and public retirement plans, advisors and individual retirement plan
participants in many of the largest defined contribution plans in the U.S.
They are also the creators of the award-winning Financial Guidance Theory
(FGT), developed for retirement income planning.For more information,
GuidedChoice is not affiliated with Schwab Retirement Plan Services, Inc. or
About Morningstar Associates, LLC
Morningstar Associates, LLC is a registered investment advisor and wholly
owned subsidiary of Morningstar, Inc. It is part of the Morningstar Investment
Management division, which creates custom investment solutions that combine
award-winning research and global resources with proprietary Morningstar data.
With approximately $149 billion in assets under advisement and management, the
Morningstar Investment Management division provides comprehensive retirement,
investment advisory, and portfolio management services for financial
institutions, plan sponsors, and advisors around the world.
Data as of Dec. 31, 2012. Includes Morningstar Associates, Ibbotson
Associates, Morningstar Investment Services, OBSR Advisory Services, and
Morningstar Associates, Morningstar, Inc., and their affiliates are not
affiliated with Schwab Retirement Plan Services, Inc. or its affiliates.
*Top 10 ranking by total 401(k) recordkeeping assets. PLANSPONSOR 2012
Recordkeeping Survey, June 2012.
^1Low fund investment expense refers to lower operating expense ratios.
^2 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. Schwab
Retirement Plan Services, Inc., is currently implementing a similar
independent savings and investment service that will be provided by
Morningstar Associates, LLC.
Some of the statements may be forward looking and contain certain risks and
uncertainties. There can be no guarantee of future performance. The views
expressed are subject to change based on market and other various conditions.
Investment Products: Not FDIC Insured – No Bank Guarantee – May Lose Value
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© 2013 Schwab Retirement Plan Services, Inc., and/or its affiliates. All
Mike Peterson, 330-908-4334
Alexa Auerbach, 312-696-6481
Donna Lehman, 770-565-7275
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