Charles Schwab and AARP announced Monday a joint plan that would offer Schwab’s financial guidance services to AARP members.
Called “AARP l Financial Guidance Services provided by Charles Schwab,” the new program provides AARP’s millions of members access to special offers, including a free consultation, seminars and rebates for Schwab’s mutual funds.
"We are in the midst of a challenging economy that has disrupted how many Americans are thinking about and planning for their retirement. Their need for information and access to resources is greater than ever, and through this program, we hope to be able to help many of AARP's members prepare for retirement on their own terms," said Ben Brigeman, executive vice president for Charles Schwab, in a statement.
Under the terms of the Schwab-AARP agreement, all brokerage services are performed by Schwab. While AARP endorses the program, it is not a registered broker-dealer and does not provide brokerage services or financial advice and cannot recommend or endorse specific investments in connection with the program. For the first new account opened at Schwab by an AARP member, Schwab pays AARP a one-time royalty fee for the use of AARP intellectual property, including its name, logo and mailing list. These fees are used for the general purpose of AARP and do not increase any fees, commissions, charges, or expenses paid by the customer to Schwab.
The educational seminars will be available throughout Schwab's network of more than 300 branches. The rebate is for program fees on Schwab Managed Portfolios, a professionally managed, diversified portfolio of mutual funds. In addition, AARP members will have access to a dedicated toll-free number at Schwab and content online.
A recent survey of Americans 50 and older performed by Schwab shows gaps between financial information received and action taken among those on the verge of retirement. While 67% say they know what they need to know to manage their finances successfully, just 10% say they feel prepared for planning and saving for retirement.
Additional findings from the survey include:
- 61% of those surveyed would prefer to have financial advice tailored to their situation
- 53% think their most challenging financial issues are in their future
- 47% of respondents say they are handling their financial future “passively”
- 31% say they still have a lot to learn about managing their finances successfully, and 55% say they have learned more from their mistakes than from their financial successes
"Our members tell us that achieving financial security is their top goal along the way to living their best lives,” said John Wider, president and CEO of AARP Services Inc., AARP's for-profit subsidiary, in the statement. “This new program will give them easy access to straightforward information and financial guidance from a familiar source in a pressure-free setting to help them with their goals and dreams."
Read about Schwab’s fourth-quarter 2010 earnings at AdvisorOne.com.