A simplified shopping experience for retail investors

January 26, 2022 Heather Fischer
Schwab takes steps to help investors who feel overwhelmed and frustrated by the process of making mutual fund buying decisions.

Today’s retail investors are inundated with choices. That can lead to confusion about how to make fund buying decisions. Our research bears that out – in a recent study, nearly half of investors told us they feel overwhelmed or frustrated by the process of selecting funds, and just over half say they feel like they have too many options when shopping.1 To help navigate the clutter, we have developed a redesigned retail mutual fund shopping experience aimed at helping our clients meet their financial goals.  

We’re excited to deliver on this now because of our new strategic relationship with T. Rowe Price, a leading provider of actively managed mutual funds. In December, we announced that independent advisors who custody with Schwab will have access to T. Rowe Price’s lowest cost institutional share class funds without transaction fees. Today, we’re announcing that T. Rowe Price’s actively managed funds will get enhanced visibility – alongside Schwab’s own proprietary funds – as part of our new mutual fund shopping experience for retail investors.

How it will work

The Fund Finder tool on Schwab.com sorts and filters prioritizing the criteria we know based on our research investors typically value most – factors such as low expense ratios, no transaction fees, and high Morningstar Overall Ratings. Starting January 27th, we’ll also add a “Featured Funds” module that highlights funds from Schwab and T. Rowe Price that meet clients’ search criteria, have no transaction fees, and have Morningstar Overall Rating of four or five stars.  

Here’s what it will look like:

For illustrative purposes only. Please see important disclosures below.

In addition, when a client conducts research on a particular fund, they will get a rich snapshot of data and information about that fund. They will also see a “Similar Funds” module featuring no transaction fee fund choices from Schwab and T. Rowe Price, marked as sponsored, that are in the same category.  

Here’s what it will look like:

For illustrative purposes only. Please see important disclosures below.

Demand and benefits

We developed this new mutual fund shopping experience in response to what we see as a clear need in the market. Going back to the research cited above, the good news is that more than half of investors feel well equipped to navigate the fund selection process. Still a significant number of investors feel overwhelmed, frustrated, and confused.1 

Having a world of choices is undoubtedly a great thing for investors, and many new products and asset classes are now more accessible and bring new opportunities to individual investors. We’re proud of the depth and scale we offer and remain deeply committed to an open architecture model. But some of our clients are telling us they want help navigating all those choices. With the launch of our new retail mutual fund shopping experience, help is on the way.