Pioneered a decade ago by upstarts Wealthfront and Betterment, which used algorithms to pick low-cost investments suited for a customer’s risk appetite, robo-advisers could become a fixture in investing. After the initial push, mutual fund giants like Vanguard and Blackrock quickly released their own versions, and banks with big wealth management arms like Morgan Stanley and Bank of America followed suit. Now JP Morgan Chase is the latest to debut its own robo-advisor.
According to Investopedia, “Robo-advisors (also spelled robo-adviser or roboadvisor) are digital platforms that provide automated, algorithm-driven financial planning services with little to no human supervision. A typical robo-advisor collects information from clients about their financial situation and future goals through an online survey and then uses the data to offer advice and automatically invest client assets.”
After a year of fine-tuning, which included user trials at 27 branches in Brooklyn, JP Morgan Chase is released a digital investing service called You Invest Portfolios this week. For the cost of an annual fee of 0.35% of assets, or 35 basis points, J.P. Morgan will allocate users into an investment portfolio made up of the bank’s exchange traded funds, or ETFs.
“We think we’re offering really great value at 35 basis points given the integration with the Chase experience and our rebating of all of the underlying ETF expenses,” Laskowitz said.
For more investing ideas, visit ETFtrends.com.