Charles Schwab Vs. Mercer: What’s the Difference?
Take a closer look at investment firms Charles Schwab and Mercer and compare their services, pros and cons, accessibility, and investment strategies.
Summary
Charles Schwab is a massive financial advisory firm that offers various services, including financial planning, investment management, and a robo advisor.
Mercer is also a sizable leading investment advisor firm that offers services ranging from portfolio management and financial planning to retirement and tax preparation.
The two companies have different fee structures and client base types.
Mercer vs. Charles Schwab: what’s the difference?
Mercer and Charles Schwab are two multinational companies coexisting in the financial advice industry.
Established in 1945, Mercer financial services now provides solutions to clients in 130 countries on six continents. Mercer manages tens of billions in AUM. Its client base consists of approximately 20% individuals, 60% high-net-worth individuals, and 20% charitable organizations.
Charles Schwab is an American financial services company offering a vast range of investment and wealth management products and services. The multinational firm was founded in 1971, and its focus on empowering individual investors has attracted a broad spectrum of clients, including non-high-net-worth individuals, high-net-worth clients, banks, businesses, trusts, estates, and several types of organizations.
What are Charles Schwab and Mercer’s specific investment strategies?
Charles Schwab advisors offer a host of services, including:
Wealth management
Retirement income planning
Investment management
Estate planning
Insurance analysis and planning
Asset allocation and diversification
Customized financial planning
Managed investment portfolios
A hybrid of human advisory services and automated investment management
Online planning tools
Mercer offers a wide array of financial services tailored to clients’ individual goals. The firm provides the following services:
Investment management
General financial planning
Estate planning
Retirement planning
Tax planning
Family office services
Mercer’s financial planning and investment strategies favor a long-term approach, investing in various asset classes and securities. One of its primary values is sticking to environmental, social, and governance (ESG) principles and socially responsible investing (SRI) considerations.
What fees can I expect from Mercer and Charles Schwab?
Mercer’s fees are structured so that financial professionals only receive compensation from clients for their services. They don’t earn an additional commission or receive kickbacks for recommending a specific investment product over another. This type of fee structure reduces the risk of conflicts of interest between client and advisor.
Charles Schwab is a fee-based advisory company that takes fees from clients. However, some Charles Schwab advisors may also be entitled to earn commissions from mutual fund companies, brokerage firms, or insurance companies when they sell their products. Charles Schwab's fee structure opens the door for a conflict of interest.
When you employ investment firms to assist you with financial and investment planning, you may have to pay certain fees, including:
Trading fees
Trading commissions
Inactivity fees
Non-trading fees
Charles Schwab has a $0 account minimum and four trading platforms with no fees or trade minimums. Clients also have access to over 200 funds with investment requirements of $100 or below.
Mercer clients pay investment management fees according to their portfolio strategies and total Assets Under Management (AUM). The minimum fee is 2% of AUM or $2,400 annually.
Is Mercer or Charles Schwab better?
While Mercer and Charles Schwab are both leading financial firms, they vary in their offerings, and each has pros and cons.
Pros of Mercer
It offers a full range of family office services, including tax preparation, regular financial planning, estate planning, and more within the same firm.
Its fees are quite competitive.
It has won several awards, including being listed as one of the best 300 investment advisory firms in the U.S. in 2020.
Mercer is dedicated to helping women investors achieve their unique goals, and female clients can choose to work with a woman advisor, should they prefer.
Investment strategies are tailored to clients’ personal objectives.
It’s a reputable brand.
Cons of Mercer
Potential conflict of interest from employees selling insurance who are entitled to receive commissions
There is a chance of conflicts of interest through employees selling securities who earn a commission.
The company pays for customer referrals.
Pros of Charles Schwab
It is suitable for all investor types
No minimum account balance
Active traders benefit from a $0 commission for ETFs and stocks.
It offers extensive research.
Schwab has an array of low-expense ratio funds and funds that have no transaction fees.
Cons of Charles Schwab
It does not have a large selection of fractional shares.
Schwab’s interest rate on uninvested cash is low.
It has some disclosures on its SEC Form ADV.
Mercer or Charles Schwab: which should I choose?
If you’re wondering whether to go with Mercer financial services or Charles Schwab advisors, your personal needs and circumstances will be the ultimate deciding factors. However, to make an informed decision, you ask yourself the following questions:
How do Charles Schwab and Mercer remain competitive and adapt to changing market conditions?
Both companies must continuously innovate and adapt to meet their clients' evolving needs. This includes investing in cutting-edge technology, expanding product offerings, elevating customer service, and keeping up with industry trends and best practices.
Which platform provides better customer service and support?
Clients can reach Charles Schwab’s customer service and support systems via email, phone, in-person consultations, or live chat. They are available 24/7 and have excellent customer service reviews.
Mercer customer service is also available by phone, email, completing the contact form on the website, or by arranging an appointment during office hours.
Can I access my Mercer and Charles Schwab accounts through their websites and mobile apps?
Both Charles Schwab and Mercer provide online access to client accounts through their respective websites and mobile apps. These allow clients to monitor their investments, view statements, access research and educational resources, and communicate with their advisors.
Get expert financial advice
Both Charles Schwab and Mercer are large, highly reputable financial advisory firms offering a wide variety of investment and other financial services. They differ in fee structure and their investment strategies and philosophy. Selecting one or the other will depend on your personal financial objectives.
For expert financial advice, find a professional SEC-regulated financial advisor via Unbiased.
Writers
Our team of writers, who have decades of experience writing about personal finance, including investing and retirement, are here to help you find out what you must know about life’s biggest financial decisions.