Financial firms continue to roll out robo plans and tweak automation-based investing options. As in the fund universe, all robos are not created equal.
In its third quarterly report, RIA Condor Capital – in cooperation with Backend Benchmarking – gives advisors and investors data that breaks down the performance of firms competing in this growing sector.
"Given the comparatively recent emergence of these algorithm- and automation-backed products, we think it is important to understand what their characteristics are in order to provide transparency for investors," said Condor President Ken Schapiro, in a statement. "That's why we think Condor Capital's proprietary Robo Report is an innovative and go-to resource."
Q1 News
Among firms announcing robo development in the latest quarter are TradeKing, Wells Fargo, Goldman Sachs and Betterment.
Motif said it is launching three proprietary portfolios, which it calls Impact Portfolios; they are managed at Motif's discretion based on their risk assessment of users, like other robos, according to Condor Capital. "What sets them apart from most other offerings is they each have a socially responsible theme, allowing their clients to invest with a social purpose," the group explained in its Q1 report.
TradeKing, now part of Ally Financial, is making a change in strategy that entails moving investors to Ally Invest Managed Portfolios. Investors most affected by the shift are those invested in the TradeKing's Momentum strategy and portfolios with the Risk Assist feature. "They will transition from an active strategy employing technical analysis to what we anticipate will be a more passive strategy," the latest Robo Report states.
Betterment said it is adding "live" advisors to individuals with $100,000 or more of invested assets. "This is a continuation of a trend we see from 'pure' robos with little to no human advice, to a 'hybrid' model where robo tools are combined with more traditional person-to-person interaction," the report explained.
As for Wells Fargo, it is poised to roll out Intuitive Investor targeted at younger clients and prospects with an account minimum of $10,000 and a 0.50% management fee. It will be managed by SigFig (also working with UBS Americas), with the Wells Fargo Investment Institute handling its asset selection.
The industry buzz is that Goldman Sachs is working on its own robo-advice platform that could be aimed at mass affluent investors.
"We also hope to see an offering from Morgan Stanley later this year, although it is unclear whether their digital advice tools will be used to augment their existing advisors' businesses, be marketed directly to consumers, or both," the report said. "[CEO] Jamie Dimon also said in his yearly letter to shareholders that JPMorgan is developing a digital investment advice solution that should be ready this year."
