JP Morgan is rolling out a robo-adviser with free ETFs to lure new investors

[darkblessings]

https://www.cnbc.com/2019/07/10/jpm...ser-you-invest-portfolios-with-free-etfs.html

After years of development, J.P. Morgan is releasing a digital investing service called You Invest Portfolios.

For an annual fee of 0.35% of assets, J.P. Morgan will put users into an investment portfolio made up of the bank’s ETFs.

Unlike most rivals, J.P. Morgan is waiving fees for the underlying investments, which should cut investors’ costs by about 15 basis points, according to the bank.

 

[fire_starter]

@darkblessings So wait , they charge a 0.35% fee for a robo advisor but the underlying investments are free....that isn't a good deal at all. Current robo advisor fees are about 0.15%

I mean wealthfront , betterment charge 0.15% and the underlying funds probably add 0.05% .

Schwab has a free one (keep about 7% in cash). If you count the cash drag it may cost about 0.08%

Who would think this is a good deal?

 

[resjudicata]

@fire_starter Chase is a HUGE public brand. The average person who is just now learning about ETFs, or better yet, those customers that Chase is telling about ETFs, is probably not going to know that there are plenty of options for ETFs with cheaper fees. They're going to say "Oh, I already bank at Chase, may as well start investing at Chase too and this one is FREE! NO TRADING FEES LIKE ETRADE!"

 

[smithrt1967]

@resjudicata Well, and a .35 fee is really not that bad in the grand scheme. Yeah everyone hates paying fees, but we’ve come a long way from the “cut 5 years off your life” 1-2% retirement fund fees that were common not very long ago.

 

[robert2032]

@fire_starter It really all depends on what their strategy is. JPM typically tries to get a bit more cute than the run of the mill portfolio so an extra 10 bips may be justified or it may not. Honestly the difference is pretty small. Paying attention to fees is important but this sub is way too focused on tiny differences.

 

[fire_starter]

@robert2032 I sort of agree, people switching to fidelity zero fee funds may be penny wise pound foolish. The difference is 3 bips for a fund that follows some unknown index and samples leaving off 1k of stocks.

However I think if you want higher risk adjusted returns just invest in some active managed fund , to me robo advisors or people that want normal risk adjusted type returns based on their age/goals/risk tolerance and auto-rebalancing....Meaning personally I think if you want to try to "beat the market" but not trading yourself just invest in one of the 10 thousand active mutual funds. If you want to just keep up with the market and not try anything fancy just go with a robo-advisor that charges 15-10 basis points; but again this is just my personal thought.

I can see people who already bank/invest at chase jumping on this for ease of use