Broker brawl breaks out over Schwab’s wealth management ‘robo-advisors’

The feelings — and the funds — are mutual.

WealthFront, an investment advisory startup, started a Wall Street war of words on Tuesday when its CEO accused Charles Schwab, a firm about 125 times its size, of hoarding customer funds to pad its bottom line — a charge disputed as "misleading."

The broker brawl broke out about Schwab's "Intelligent Portfolios," which were made widely available on Monday, and use automated technology to make investment decisions for investors and keep costs down.

We've clearly hit a nerve among competitors who are now looking for any possible way to attack. - Alison Wetheim, Schwab

Those programs, known as robo-advisors, were the latest from some of the biggest investment names, including Schwab and Vanguard, and newer companies like WealthFront and Betterment.

A day after Schwab's product launched, WealthFront CEO Adam Nash took to Medium, a blogging platform, to accuse Schwab of straying from its original values for "greed."

Nash, whose company markets to the millennial generation, told The Post that the Schwab portfolios keep too much of its clients' funds in cash in order to lend out at a higher rate.

"They actually make a lot more money there than on trading," he told The Post.

After Nash's digital diss, Schwab, in an unusual move, issued a statement disputing Nash's post — and accusing him of "misrepresenting facts."

"It's easy to question cash in the sixth year of a bull market," it said.

"We've clearly hit a nerve among competitors who are now looking for any possible way to attack what is a very straightforward, sophisticated, convenient portfolio solution at a lower all-in cost than they provide," Alison Wetheim, a Schwab spokeswoman, told The Post.

"They're in a tough spot, because it is value proposition they can't match," she added. "Hence the misinformation."

WealthFront, which announced last week that it's passed $2 billion in assets, has more than 17,000 clients.

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