Through the alliances, Schwab retirement plan participants will now be able to receive personalized recommendations on how to invest in the specific mutual fund choices in their 401(k) plans. They will also be able to access the online services through links on Schwabplan.com, Schwab's 401(k) Web site, the San Francisco-based brokerage firm said in a statement yesterday.
Financial terms of the deal were not disclosed.
Schwab competes among a growing number of companies in the Internet brokerage space, including leaders E*Trade, Ameritrade, Merrill Lynch and Morgan Stanley Dean Witter. As additional brokerages set up shop online, more consumers follow. In 1999, the number of households that trade online increased to 3.1 million from 2.2 million in 1998, according to Forrester Research.
Palo Alto, Calif.-based Financial Engines and San Francisco-based mPower are making sure that retirement plan and participant data are automatically pre-loaded and updated for customers. After completing an online advice session, customers can change their investment allocations or implement the investment recommendations online.
Retirement Plan Services, a division of Schwab, currently offers general plan investing, record keeping and trustee services. As of November of this year, assets at the division totaled $26.5 billion, up 49 percent from the same period a year ago, the company said.
Schwab said fees for the new services vary by plan size and will be offered to customers beginning in the second quarter of next year.