The financial giants are jumping into the so-called robo-adviser business, underscoring the high hopes surrounding services that offer low-cost, automated investment advice. The newest entrant is Charles Schwab SCHW, -2.16% which on Monday launched its Schwab Intelligent Portfolios. Vanguard already has attracted more than $4 billion to its robo-adviser offering, according to Investment News. In addition, Fidelity has teamed up with robo-advisers and considered offering its own automated advice service. So it’s clear that the big boys are taking aim at robo-adviser startups likeWealthfront and Betterment. Also read: What robo-advisers can and can’t do for you In Schwab’s case, its automated offering has sparked a bit of an outcry. In particular, critics have blasted the amount its robo-adviser recommends that investors put in cash, pointing out that can result in lower returns since that money isn’t invested. Schwab Intelligent Portfolios users could end up with as much as 30% of their portfolios in cash that’s at a Schwab bank where it can earn a spread for the San Francisco company, said an RIABiz article last month. A New York Times article last week pointed out that Schwab’s cash allocations were raising eyebrows in the industry. The Times piece noted that cash allocations of at least 6% to as much as 30% will often be larger than many financial advisers recommend and will make money for Schwab. On Monday, Wealthfront’s CEO weighed in: “A 25-year old investor who is just starting out, making $65,000 per year and saving 10% annually, could end up with over $138,000 less in retirement due to having a 6% cash allocation in Schwab’s Intelligent Portfolios,” Wealthfront CEO Adam Nash said in a “personal reflection” posted on Medium. (Nash also criticized his rival’s use of so-called smart beta ETFs, which aim to perform better than plain-vanilla index funds and ETFs.) For its part, Schwab said the concerns about cash are overdone. “We believe that cash is a ballast for a portfolio, and the amount of cash I also think is getting exaggerated in the media,” said Naureen Hassan, the executive heading up Schwab Intelligent Portfolios, in an interview Monday. “They’re focused on the extreme end of the 30%, and that’s if you’ve got a really short-term goal ... or if you’re already in retirement.” Hassan said the average cash holding across all portfolios is expected to be about 10%, and that’s in line with current practice among registered investment advisors. Schwab also has posted a response to Wealthfront. What to make of the kerfuffle? This could be a sign of how it’s “never been a better time to be an investor,” suggests Cullen Roche over at the finance blog Pragmatic Capitalism. Roche, an occasional MarketWatch contributor, notes that “we’re not arguing about how crummy the high fee asset management business is. We’re arguing about how perfect the low fee services are.” Victor Reklaitis