Frec vs Schwab Personalized Indexing: Fees and Minimums

Frec Classic charges 0.09% to 0.35% a year and starts at $20,000. Schwab Personalized Indexing charges 0.40% and starts at $100,000. On the S&P 500 specifically Frec is roughly four times cheaper at one fifth of the minimum, and Schwab does not offer the S&P 500 at all. What Schwab gives you instead is a separately managed account at a custodian holding trillions, daily portfolio-manager oversight, and a refund guarantee on the program fee.

That is the decision in five sentences. Everything below was checked against Frec's and Schwab's own published pages in August 2026. This is educational content, not investment advice, and neither firm pays us anything.

Frec vs Schwab Personalized Indexing at a glance

Frec vs Schwab Personalized Indexing fees: which is cheaper?

Frec, and it is not close. Frec Classic runs 0.09% to 0.35% depending on the index. Schwab charges a flat 0.40% until you pass $2,000,000. Take the cheapest honest comparison, a broad US equity strategy at each firm. At $100,000, Schwab costs $400 a year. Frec's 0.09% index costs $90. That $310 annual gap compounds quietly for as long as you hold the account.

Run it further up the scale and it gets worse rather than better, because Schwab's discount tier is set so high that almost nobody reaches it. At $500,000 Schwab charges $2,000 a year against Frec's $450 to $1,750, depending on which index you picked. The 0.35% breakpoint only applies to the portion above $2,000,000, so an investor with exactly $2,000,000 pays the full 0.40%, which is $8,000 a year. Schwab is priced like the separately managed account it is, not like a retail direct indexing product, and comparing it to Frec on fee alone will always flatter Frec.

The one place the fee comparison genuinely narrows is at Frec's expensive end. Frec's 0.35% indices sit within touching distance of Schwab's 0.40%, and at that point you are choosing between a startup and a custodian for five basis points. Most people picking Frec are picking it for the 0.09% tier, so this is more of a footnote than a real scenario, but it is worth knowing that Frec's headline number is the bottom of a range rather than a flat rate.

What is the minimum for Frec vs Schwab Personalized Indexing?

Frec Classic starts at $20,000 and runs to $50,000 depending on which index you choose. Schwab Personalized Indexing requires $100,000. That five-times difference in the entry point decides the comparison for most people before fees enter into it, because below $100,000 Schwab is not an option at all.

Schwab is not being greedy here, it is being an SMA. Institutional separately managed accounts traditionally opened at $250,000 and up, and Schwab genuinely did lower that bar when it launched Personalized Indexing in 2022. But the retail direct indexing market moved further and faster: Wealthfront and Fidelity now open at $5,000, and Frec at $20,000. Measured against the market an individual investor actually shops in, Schwab has the highest minimum on the shelf.

Does Schwab Personalized Indexing track the S&P 500?

No, and this is the fact that most often surprises people who have already half decided on Schwab. There is no S&P 500 strategy in the program. The flagship strategy tracks the Schwab 1000 Index, which is Schwab's own index of the 1,000 largest US companies. The large cap option tracks the Solactive US Large Cap Index and the broad option tracks the Solactive United States 3000 Index. The only S&P index anywhere in the six strategies is the S&P SmallCap 600.

Frec, by contrast, offers the S&P 500 directly, at its cheapest 0.09% tier. So if your reason for direct indexing is specifically to own the S&P 500 as individual shares, this comparison resolves itself: one of these two firms sells that and the other does not, and the one that sells it is also the cheaper one.

How much the index name matters is a fair question. The Schwab 1000 and the S&P 500 are close cousins, both float-adjusted and cap-weighted portfolios of large US companies, and their returns track each other closely. The Schwab 1000 simply reaches further down the size scale. If you just want broad US large cap exposure, the distinction is academic. If you are trying to match an S&P 500 position you hold elsewhere, or you want to benchmark cleanly against the index everyone quotes, it is not. We lay out all six strategies and the index behind each one on the Schwab Personalized Indexing breakdown.

Which one harvests losses better?

Both make real commitments, which already puts them ahead of Fidelity, and they make them in different currencies. Frec quantifies the outcome: its pricing page markets Classic as able to "harvest up to 40% of your portfolio in losses." Schwab describes the process instead, saying its "portfolio managers monitor accounts separately on a daily basis and use proprietary technology to optimize portfolios and seek out potential tax-loss harvesting opportunities."

Neither claim can be verified from outside, and both firms attach the standard caveat that no particular investor is guaranteed a tax benefit. Daily monitoring is the meaningful detail on Schwab's side, because harvesting opportunities open and close inside a quarter and a monthly scan misses most of them. Research from J.P. Morgan Asset Management put the difference between daily and monthly scanning at roughly 30 basis points of additional annualized tax alpha across sixteen scenarios from 2018 to 2021, which is a real number relative to the fees being argued over here.

The more useful way to compare them is against the fee each charges for the service. Whatever tax alpha a systematic harvester produces, Frec charges 0.09% for it and Schwab charges 0.40%. Published estimates of realistic tax alpha vary enormously, from the 1% to 2% that providers market down to the 0.18% to 0.44% that Wealthfront's own backtest produces on the US stocks portion of an account. If the honest figure is nearer the lower end, a 31 basis point fee difference eats a large share of the benefit, and the argument for the more expensive harvester has to rest on something other than the harvesting.

The wash sale gap neither firm can close for you

Here is the part that applies to both platforms and gets left out of nearly every comparison. Schwab discloses that it "will monitor for wash sales within an SPI account" but "does not monitor for wash sales in other accounts held by a client," including other Schwab Personalized Indexing accounts you hold. No direct indexing provider can see inside your 401(k) or your other brokerage, so the same limitation applies at Frec and everywhere else.

The wash sale rule under IRC section 1091 covers a 61 day window, the day of the sale plus 30 days either side, and it applies across all of your accounts rather than per account. So the harvester sells a holding at a loss on the tenth, your automatic 401(k) contribution buys a substantially identical fund on the fifteenth, and the loss is disallowed. In a taxable account that is usually only a deferral, since the disallowed loss is added to the basis of the replacement shares. In an IRA it is not. Under IRS Revenue Ruling 2008-5, a loss disallowed because the replacement was bought inside an IRA is gone permanently, and your IRA basis is not increased to compensate.

The practical consequence is that whichever platform you pick, you own the reconciliation. Know what your other accounts buy and when they buy it, and keep substantially identical exposure out of any account that contributes automatically. It also shows up at filing time, because disallowed wash sales are reported on your 1099-B and have to be carried correctly into the return, which is one of the more common places a direct indexing account creates work that the pricing page never mentioned. If you would rather hand the 1099s to software that reads them than reconcile lots by hand, that is a reasonable way to spend the time you saved.

Compare direct indexing AUM fees: Fidelity vs Schwab vs Frec

Fidelity and Schwab charge the same 0.40% for index strategies, and that symmetry is misleading. Fidelity commits to harvesting only "on a limited basis, at the discretion of the portfolio manager," while Schwab commits to daily monitoring. For the same fee, Schwab makes the firmer promise, which is the single strongest argument in Schwab's favor anywhere in this comparison. Fidelity's counter is that it will take your $5,000 and Schwab will not. The full breakdown of Fidelity's wording sits on Fidelity Managed FidFolios, and the whole field is side by side on direct indexing platforms compared.

So which should you pick?

Pick Frec if the fee is the point. It is four times cheaper, it offers the S&P 500 that Schwab does not, it gives you 25 indices instead of six, and it lets you in at $20,000. For an investor optimizing after-tax outcomes on a $100,000 to $500,000 taxable account, Frec is the rational default and the burden of proof sits with anything more expensive.

Pick Schwab if the institution is the point. You already custody at Schwab and want one statement and one login. You want a separately managed account with named portfolio managers rather than an algorithm at a startup. You want the refund guarantee. You are wealthy enough that 31 basis points on the sleeve is genuinely immaterial next to the operational simplicity. These are legitimate reasons and nobody should pretend otherwise, but notice that none of them is about direct indexing. They are about who holds the account.

Pick neither if you are below $20,000, if you want an index outside both menus, or if the account would be a retirement account, where there are no capital gains to offset and the entire tax argument disappears. And if what you actually want is to author the construction rather than buy someone else's, that is a different product entirely. We cover that route in can you do direct indexing yourself.

Model the construction before you move the money

Both firms ask you to make one decision from a short menu and then commit real money to it, and neither gives you a way to see what the choice does before you make it. Schwab hands you six strategy names. Frec hands you 25 index names. In both cases you are picking from a list on a marketing page and finding out afterwards.

That is the gap we fill, and it is worth being precise about our role: Indexes is not a brokerage and not an adviser. We do not custody assets, place trades, harvest losses or track cost basis. What we do is let you define the members and the weights, backtest that exact construction against real market history, and track it as a named index against the S&P 500 or BTC. So you can see how a 1,000 name US construction actually behaved against a 3,000 name one, or what excluding your employer's industry did to the risk profile, before $100,000 is committed to a strategy chosen from six words on a page. The tool at the top of this article does that, and there is no minimum.

Last updated August 2026. Fees, minimums and strategy line-ups were taken from frec.com/pricing and schwab.com/personalized-indexing in August 2026 and change without notice. Confirm current terms with each provider before acting.