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We asked 4 robo advisers and 4 human advisers for portfolios for the same investor

Published: Apr 27, 2015 9:14 a.m. ET

Slide 2 of 11

Unique in liking gold: Charles Schwab Corp.’s SCHW, +1.13% robot is alone among the eight advisers in telling our 35-year-old to plunk money into a gold ETF IAU, +1.98% That runs counter to the common advice that individuals shouldn’t invest in the yellow metal.

Cash heavy: Schwab Intelligent Portfolios also distinguishes itself by recommending our investor put 8.5% in cash. This cash-heavy approach has drawn criticism, since it can result in lower returns. Schwab defended the approach last month in an interview, and it gave a detailed defense in a blog post in early April.

Fees: One big plus is that Schwab’s robo adviser doesn’t charge a management fee.

But the San Francisco–based financial giant can make money on the cash holding it recommends, just as any bank profits from the difference between the interest rate that it pays to customers and the rate it can earn on money it told. Since Schwab is an ETF provider, unlike the other advisers, it also gets revenue through the fees tied to this portfolio’s Schwab ETFs. What’s more, the Schwab “fundamental” ETFs are smart-beta funds, meaning they have higher fees than plain-vanilla ETFs and aim to beat the market.

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