Charles Schwab plans a new robo-advisory service for investors in 2017 as the trend grows for financial companies to pair computer algorithm-driven advice with human helpers to compete in a market led by Vanguard Group. Traditional financial-services companies – e.g., Morgan Stanley and BofA Merrill Lynch - have recently announced plans to offer automated investment services, most of which include advisers.

Dubbed "Schwab Intelligent Advisory", the new service is entering a market that was pioneered by fully automated services from startups including Betterment LLC and Wealthfront Inc. But as the field has grown, it has become dominated by so-called hybrid services, including Vanguard’s Personal Advisor Services.

With the new offering, Schwab - which already has a robo-advisory service - will compete more directly with Vanguard. With an account minimum of $25,000, the new Schwab service is open to more investors than Vanguard’s offering, which requires at least $50,000. The costs are similar - a weighted average of 0.4% for Vanguard, versus 0.26% to 0.52% for Schwab.

The SF-based discount brokerage will continue to offer Schwab Intelligent Portfolios, the robo service it launched in June 2015 that now has $10.2 billion in assets. Intelligent Portfolios offers some assistance from phone representatives, but it doesn’t provide the financial-planning services that are at the heart of Schwab’s new offering.

Schwab’s move reflects the rise of the hybrid approach, said Scott Smith, director at Cerulli Associates, a research firm that specializes in the asset management industry. “Even if they are pretty competent investors, people want help,” he said. “They want someone to bounce ideas off of and to collaborate with on goals.”

Schwab’s new service, which is expected to launch in first half of 2017, will be tested by employees and clients in pilot programs “very soon,” said Ms. Hathi.