No: Charles Schwab & Co. is a broker-dealer and an investment adviser in one firm, and it is paid through the spread on cash, fees from its own funds and other fund companies, insurance and annuity commissions and order routing, as well as advisory fees. That comes from Schwab’s own Form CRS (October 15, 2026). Its advisory programs charge an asset-based fee, a one-time planning fee or no advisory fee at all, and the brochures say exactly how Schwab is paid beyond that.
Fee-only means the client is the only source of pay: no commissions and no other payments tied to products, by the firm or its related companies. Schwab’s filings describe several payments of that kind, so the label doesn’t fit, even where a program carries no commissions.
How Schwab is paid
Charles Schwab & Co. (CRD 5393) is a dual registrant, registered with the SEC as an adviser and a broker. Its Form ADV Part 1, filed October 21, 2026, checks “broker-dealer” and “insurance broker or agent” under other business activities (Item 6A). Under compensation (Item 5E) it reports fixed fees and “asset based fees for wrap pgrms & subsc pricing for fin planning.” Commissions aren’t checked there: Item 5E covers advisory pay only, and Schwab’s commissions are earned on the brokerage side.
The Form CRS is plainer. For brokerage accounts, Schwab says “we and our affiliates earn money from”:
- Shareholder service fees from other fund companies and from Schwab’s own funds, plus management fees paid by Schwab funds and ETFs to its affiliate, Charles Schwab Investment Management (Schwab Asset Management)
- The “spread” on cash: what Schwab earns on your cash minus what it pays you
- Dealer concessions or fees when it trades with you as principal
- “Commissions or trail commissions paid to us by insurance companies” when you buy an annuity or other insurance
- Order routing payments from other brokers and exchanges
For advisory accounts the list is the fund fees, the cash spread, fees from outside advisers in its referral service, and other conflicts specific to each program.
The CRS also says Schwab’s representatives “earn more for recommending certain services over others,” and receive pay “to navigate you to our investment advisory services.” Schwab Wealth Advisory’s own advisors get a base salary and a bonus based on Schwab’s overall results.
What the advisory programs charge and earn
Schwab Intelligent Portfolios is a robo-advisor with a $5,000 minimum and no advisory fee. Its brochure is direct: “the SIP Program is not free of charge.” You pay the ETFs’ expenses, including Schwab ETFs, which pay Schwab Asset Management. Each portfolio holds 6% to 30% in cash, swept to Charles Schwab Bank, and the brochure says Schwab doesn’t charge an advisory fee “in part because of the revenue Schwab Bank generates from the Cash Allocation.” It calls the way it sets that cash level “a conflict of interest.” Schwab also receives payments from some other ETF sponsors, and from market centers it routes trades to.
On a $500,000 portfolio, that cash allocation is $30,000 to $150,000, depending on the risk level you choose.
The brochure also reports a 2022 SEC order (June 13, 2022). In it, the SEC found that from March 2015 through November 2018, Schwab advisory subsidiaries made “false and misleading statements” in their Form ADV filings about the program’s cash: about their conflict in setting the cash allocations, and about the effect of that cash on returns. Without admitting or denying the findings, the Schwab firms named agreed to pay $186,536,861 in disgorgement, interest and a civil penalty.
Schwab Wealth Advisory is a wrap fee program: one asset-based fee covers advice, financial planning and most trading. The advice is non-discretionary, meaning Schwab Wealth Advisory recommends and you decide and place the trades. The fee isn’t charged on cash or money market funds. The brochure lists what Schwab earns more on: no-transaction-fee funds, Schwab ETFs, separately managed accounts run by Schwab Asset Management, and its government money fund, which pays Schwab up to 0.10% a year for sweep services. Its advisors don’t recommend annuities or life insurance, but can refer you to someone who does, and “CS&Co. may receive compensation” if you buy.
Schwab Wealth Specialties sells one-time written plans: $300 for Schwab Plan Comprehensive and $2,000 for a Personal Financial Plan. There’s no ongoing monitoring. When a franchise branch refers you, the branch receives 50% of the planning fee.
Schwab also sponsors Schwab Managed Portfolios ($25,000 minimum), Schwab Managed Account Services (from $100,000) and Schwab Advisor Network, a referral service to outside advisers ($2 million minimum).
What Schwab costs
The standard Schwab Wealth Advisory fee schedule, in effect since October 1, 2024:
| Assets | Yearly fee on that portion |
|---|---|
| Up to $1 million | 0.80% |
| $1 million to $2 million | 0.75% |
| $2 million to $5 million | 0.70% |
| $5 million to $10 million | 0.50% |
| Over $10 million | 0.30% (or less, negotiated) |
There’s a quarterly minimum of $1,000 (or 1.60% of billable assets, if lower), and Schwab says fees may be negotiated at any level. Fund expenses are separate.
Worked out on that schedule, before fund expenses: $4,000 a year on $500,000, $8,000 on $1 million and $15,500 on $2 million.
Fee-only firms that publish prices charge a median 1% of assets, or a median flat $4,500 a year for ongoing planning (middle half $2,400 to $7,200). A one-time plan has a median of $2,000, and hourly advice $300 an hour.
The services differ. Schwab Wealth Advisory leaves trading decisions to you. A flat-fee planner may not manage investments at all. A percentage-fee advisor usually manages them for you. Compare what’s included, not only the price. Our guide to whether 1% is too much works through the trade.
Who Schwab may suit
- Small balances that want automated investing. Intelligent Portfolios starts at $5,000 with no advisory fee, if you accept the cash allocation and Schwab ETFs.
- People who want to keep control. Schwab Wealth Advisory gives recommendations and planning but leaves each trade to you, at 0.80% or less, with no fee on cash.
- People who want everything at one firm. Banking, brokerage, trust services and advice sit under one company.
- A one-time plan on a budget. The $300 Schwab Plan Comprehensive costs less than the $2,000 median for a fee-only one-time plan. It doesn’t include ongoing advice or monitoring.
Schwab may not fit if you want an advisor whose only income is what you pay, or one who isn’t connected to a bank, fund manager or insurance seller.
How to check it yourself
- Read Schwab’s Form CRS. Both relationship summaries are in one file on the SEC’s adviser search, under “How else does your firm make money.”
- Open the brochure for the specific program you’re offered. The fees and the “Benefits to CS&Co. affiliates” and conflicts sections are where the details are.
- Check Form ADV Part 1: Item 5E for pay, Item 6A for brokerage and insurance, Item 7A for related banks and fund managers. Our guide to telling whether an advisor is fee-only walks through each.
- Look up the person you’d work with on BrokerCheck to see whether they’re registered as a broker, an adviser, or both.
- Ask in writing. These questions to ask a financial advisor include the one that matters most here: “What do you and your firm earn, in total, from my accounts, beyond the fee I pay?”
For the wider picture, see fee-only vs fee-based vs commission, how revenue sharing works, and how a robo-advisor compares with a financial advisor.
Compare similar firms
Other fund companies and digital advisers we’ve checked against the fee-only definition: Vanguard, Fidelity, Betterment, Wealthfront, Empower, Facet, TIAA. See all 50 firms.