Inside the making of Schwab PlanTM 

How a single idea within Schwab’s Innovation Lab led to the creation of thousands of financial plans 


February 26, 2021

It began with a big idea – to give a complimentary financial plan to any client who wants one.

In less than a year, Schwab PlanTM was developed and launched. It was an important moment for investors because it happened to come at a time people really needed help – in the middle of a pandemic.

The backstory provides a unique insight into the innovation process at Schwab. Through a fast-paced approach to user testing and research within Schwab’s Innovation Lab, teams determine which new concepts and products to take to market based on investor input along the way.

We asked three central figures involved in the development of Schwab Plan – from the Innovation Lab to market – to share their insights around how it came to be.

Cynthia quote

“Making financial planning more accessible is one of our biggest drivers at Schwab. Before Schwab Plan, we had a range of planning services, from more digital-based solutions like Schwab Intelligent Portfolios Premium, to in-person higher human touch planning relationships with our Financial Consultants – but we ultimately wanted to make planning available to all clients.”

Cynthia Loh, Vice President, Digital Advice and Innovation at Schwab
Cynthia Loh

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In the beginning, the focus was on addressing one of the planning questions that clients ask most: Do I have enough money to last through retirement? But Loh soon realized that was too limited.

“We’ve interviewed a lot of investors, and a huge pain point we consistently see them experience when it comes to retirement is getting an overview of all of their financial accounts,” she says. “People typically hold multiple financial accounts across several firms and often track them manually with systems they cobble together, so we knew we had to build a digital capability that helped them easily organize multiple accounts.”

To the lab

Loh brought the idea to Schwab’s Innovation Lab.

“Cynthia came to us for help to define what the long-term vision of digital planning for self-directed investors would be,” says Raul Rodriguez, who runs the lab. “And she gave us the room to explore.”

Getting multiple perspectives is important to the process, and that’s where Alykhan Daya came in. Daya had joined Schwab just a month earlier as a Managing Director in Product Management, and he was selected to rotate into the lab as Product Lead.

“We thought Alykhan would be great because he had experience with tech and healthcare start-ups, and those skills align well with the lab environment,” says Rodriguez. “We paired him with a coach – Sahil Sachdeva – so he could get a crash course on our lab operating model. A bromance ensued.”

The lab was launched in late 2019. Not long into the process, the pandemic hit, and Schwab saw an immediate spike in clients wanting to have planning conversations.

“A lot of the team working on Schwab Plan felt that this was their individual contribution to helping clients at a vulnerable time,” says Daya. “At the same time, our team had to adapt to a completely new working style when COVID hit. Co-location is a big part of the innovation process at Schwab, and we had to figure out how to translate that energy into a fully remote working environment.”

The team members did a substantial amount of preliminary and secondary research. Then they had a breakthrough. 

“We learned that the tool needed to encourage good habits early on with small ongoing wins,” says Daya. “We expanded our thinking not just to model innovation in our industry, but to the behavior changes we wanted to model from other industries. Many wearable fitness tracking companies, for example, pair habits with goals and send notifications and reminders to track progress to keep people motivated. Similarly, Schwab Plan has an interactive dashboard that allows clients to model how changing short-term factors like income or ongoing savings rate can impact their long-term retirement outcomes.”

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He adds, “Big shiny, insurmountable numbers aren’t interesting. Telling someone in their 30s that they need $2 million to retire is something they can’t easily perceive. But they can feel great about saving $20,000 in a year and taking steps to prioritize.”

Another unique discovery was related to the need for guidance, even in a digital environment. During testing, clients clicked on nearly every link explaining how a number or assumption within Schwab Plan was calculated. “When clients need to make important decisions, it’s crucial that we offer enough transparency and explanation to allow them to feel comfortable moving forward,” Rodriguez said.

On to market

Within weeks there was a working prototype of Schwab Plan. From there the tool was on its way to market. As it hits the six-month mark since launch, Schwab Plan is making a real impact. Nearly 4,000 clients complete a new financial plan each month, and 25,000 financial plans have been completed to date.

Schwab Plan is available to all Schwab clients with no minimum asset level. Clients across the board are using it, though most are families (61% of users are married), and nearly 30 percent of clients using Schwab Plan make less than $50,000 in individual income, while around half make $100,000 or more. The average age of a Schwab Plan user is 48, but many are also young investors who likely didn’t previously have access to planning – around 25 percent of users are 34 and under.

“When it comes to financial planning, we don’t need to encourage clients to do more,” says Daya. “We need to remove the roadblocks that stand in the way. We explored over 50 different ideas in the lab focused on making planning easier, and there is much more to come with this offering.