Robo-Advisor Analysis
Transcript: Robo-Advisor Analysis Fidelity Go® Fidelity (additional service) No minimums ($10 required for trading to occur) Fee based on balance; $0-$10,000; No fee $10,000-$49,999; $3 a month $50,000+; 0.35% annually Basic questionnaire, optional additional questioning for more specific portfolio detailing. You can accept the proposal or make moderate changes within guidelines. Vested in Fidelity Flex® mutual funds. Zero Expense ratios, only available to select fee based clients. No management fees or fund expenses, with limited exceptions. The funds are paid a portion of the clients advisory fee. Highlights 01 02 03 No minimums Fee structure is attractive to lower income clients Access to exclusive funds Opportunities Fee structure is not as advantageous to higher net worth clients than others Very basic investing options No mention of Tax Loss Harvesting options Charles Schwab (additional service) Charles Schwab $5,000 minimum ; taxable and retirement available No advisory fee, no commissions. Vested into low-cost ETF's which includes Schwab's ETF's. Tax Loss harvesting available for clients with more than $50,000 Questionnaire to develop profile; up to 80 variations of the tailored portfolio across 51 ETF's, 3 investment strategies and 6 risk profiles. A portion is vested in FDIC-insured deposits based on risk profile. Option for Premium service; 1:1 guidance with a CFP, access to digital planning tools. $300 one time fee + $30/month fee ($25,000.00 Minimum Highlights Highlights Low fees Tax loss harvesting Option for premium service Opportunities High minimums No option for customizations No incentives for lower income or higher income clients Betterment (Main service) Betterment 3 different tiers of service levels offering various services with increasing costs and factors. Income generated through merchants when customers utilize debit cards and the tiered annual service fee. High balance discounts; 2M+ receives 0.10% discount Betterment offers 401(k) plans to employers that utilize their robo-advisor Launched in 2010 Options for socially responsible investing; asset customization. Offering "Advice Packages" ; $299 for a 45 minute into call with a CFP, $399 60 minute cal with a CFP for financial check up, $399 college planning, $399 marriage planning, etc. No Fee No fee $0 minimum No fee checking account with; Visa Debit card, ATM fees reimbursed, FDIC-insured up to $250K. Cash reserve savings portion; variable 1.1% interest, buckets for saving, FDIC-insured up to $1M. Advice and planning tools; Financial goal-setting and advice tools, Retirement planning tools, Feedback on accounts you hold at other institutions. (To actually fund an investment goal and utilize the robo-advisor you must sign up for the next plan) 0.25% Annual fee 0.25% Annual fee Digital Investing Low-cost investing portfolios built and managed based on your priorities Socially responsible investing options Account choices, including joint accounts, IRAs, and trusts Automatic features like portfolio rebalancing, dividend reinvestment, and auto-adjust Advanced tax-saving strategies like Tax Loss Harvesting+ and asset location Add Checking and Cash Reserve with no additional fees (Digital investing can be stand-alone) 0.40% Annual fee 0.40% Annual fee Premium Investing All the features of Digital investing Unlimited calls and emails with our team of CFP® professionals In-depth advice on investments held outside of Betterment through our team of CFP© professionals Packaged with Digital investing as a premium option. Debit card services cash reserves variable 1.10% APY Tax Loss Harvesting Options for customizing investments based on personal preferences Incentives for high net worth clients with high balance discounts The only service I have seen offering 401(k) options to employers Highlights Opportunities Misleading $0 intro tier as you are not able to invest into a portfolio at this point. Betterment makes money through their debit card services so this is just a revenue generator. Redundancy in the advice packages. College, marriage and retirement planning can be purchased separately. Good concept, interesting execution WealthFront (Main service) Wealthfront Customized questionnaire with ability to add interest to the profile such as social responsibility, tax adverse, etc. After tax returns boosted on average by 1.8% with their tax loss harvesting $500 minimum Option for visa debit card; 1.4% APY Option to save cash into buckets and utilize automation tools that allocates funding Customized investing option, ability to control the tax liability and timeline of how customer investments are added to your portfolio 0.25% annual fee (advertised that 96% of Classic portfolio clients had fees covered by tax savings) Highlights The most customizable robo-advisor out of the 4 analyzed in this presentation. Options to customize the impact of taxes. If you select a new investment you can choose how quickly or slowly it is implemented into your portfolio
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