Charles Schwab will pay nearly $200 million after a Securities and Exchange Commission probe found its "robo-advisory" services advise clients to invest sub-optimally and didn't adequately warn clients of hidden fees.
The SEC is looking into Charles Schwab's services.
The company knew that allocating client assets to cash investments in a way that would cause them to make less money than taking the same amount of risk would cause clients to make less money.
The company said in a statement that it didn't admit or deny the allegations.
The company will pay a civil fine and disgorgement of money.
"Schwab's conduct was egregious and today's action sends a clear message to advisers that they need to be transparent with clients about hidden fees and how such fees affect clients' returns," said the director of the SEC's Division of Enforcement.
The firm reported a nearly $200 million charge in the second quarter of 2021, related to the SEC investigation, as the firm's shares fell 2.5% on Monday.
More than 30 million. As of the end of the first quarter of the year, the company had $7.86 trillion in client assets, according to the most recent SEC filing.
The $200 million charge puts scrutiny onrobo- advising.
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