E-Trade Core Portfolios review 2023
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E-Trade Core Portfolios: Best for
- Cost-conscious investors
- Existing E-Trade customers
- Low-cost funds
E-Trade Core Portfolios is a low-cost robo-advisor service that works especially well for existing E-Trade clients who are looking for a do-it-for-me investing solution at a reasonable price. Not only are the funds on offer low-cost, but clients can add some specialty funds to the mix, such as socially responsible funds, among others. E-Trade’s service is well-suited for beginning investors, with a low account minimum and the ability to purchase fractional shares. Customers looking for a competitive interest rate can also open a savings account here at E-Trade and access both accounts from a single sign-on dashboard. Unfortunately, E-Trade removed some prior features such as access to financial consultants and a retirement planning tool, though the service still gets the basics right, albeit without all the perks of some other robo rivals.
If human advisors are something you need, you’ll want to have a look at Betterment, which offers a strong cash management account, too. Schwab Intelligent Portfolios could also be an excellent pick for its comprehensive service and access to advisors at its higher tier. If cost is your only objective, then Vanguard Digital Advisors should be up there on your list, too.
E-Trade Core Portfolios: In the details
Pros: Where E-Trade Core Portfolios stands out
E-Trade Core Portfolios offers one of the lowest-cost portfolios around. In fact, the expense ratio of an average portfolio almost couldn’t go any lower. An average portfolio has a weighted expense ratio of just 0.06 percent. That translates into $6 annually for every $10,000 invested. While fees on the ETFs range from 0.03 to 0.39 percent, most sit very close to the cheap end.
Now, this is money that goes to the companies managing these funds, not E-Trade itself. But everyone has to pay expense ratios, and it’s vital to minimize them where you can. And this cost comes on top of the management fee that you have to pay to E-Trade. These fees are paid seamlessly, as is typical for any expense ratio with an ETF.
Almost no rival robo-advisor gets below E-Trade’s cost, Vanguard Digital Advisor being a notable exception.
In addition to the core funds that comprise portfolios, E-Trade also offers a couple other choices that are not standard in most robo-advisor portfolios — a socially responsible ETF and a smart beta ETF. You can opt in to these selections, if you like, but you don’t have to make them part of your portfolio.
E-Trade adds a portion of your money to a socially responsible ETF that focuses on companies with good records in environmental, social and governance issues. These funds often exclude companies in industries such as armaments or fossil fuels if they don’t meet the fund’s criteria.
A smart beta fund looks for certain factors that might drive higher returns with lower risk or achieve the same returns as a traditional index fund with lower risk. This kind of fund often takes a more active approach to investing, with fund managers searching out investments that they think can generate better risk-adjusted returns.
E-Trade Core Portfolios also uses fractional shares when it builds your portfolio, and not all robo-advisors do. This feature is valuable because it allows you to put all your money to work immediately. Without this feature, your money might be sitting in cash until you have enough to buy a full share, as happens at some rival robo-advisor services. So the market could be rising while you’re waiting to have enough money to buy.
E-Trade allows you to not only buy fractional shares but reinvest your portfolio’s dividends in them, too. So any time you get a cash dividend, it’s rolled back into new shares of your investments. Again, that keeps your money invested and working for you at all times.
Reasonable management fee
E-Trade’s robo-advisory charges a reasonable management fee for what it offers – 0.30 percent annually of your assets – a figure that’s just above what could be called the industry standard of 0.25 percent. In practical terms, that fee means you’d pay $30 each year for every $10,000 managed by E-Trade. This fee includes all the routine costs of the robo-advisor service. That’s serious savings over a traditional human advisor where 1 percent might be more common. However, as is typical in the industry, you’ll pay an additional charge for any ETFs (more below).
Cons: Where E-Trade Core Portfolios could improve
E-Trade offers only minimal tax strategy in its account, a shortcoming of the service relative to the top robo-advisors. To help generate better tax-efficiency, E-Trade will use municipal bond ETFs, which are tax-free at the federal level, in place of a taxable bond fund. This feature only makes sense in taxable accounts, not in tax-advantaged accounts such as IRAs. E-Trade allows you to opt into this feature at any time, and you can switch it off, as you like.
Unfortunately, this is E-Trade’s main tax strategy, and the robo-advisor does not offer tax-loss harvesting, which can save investors substantial money, by recognizing investment losses on this year’s taxes and offsetting taxable gains. Wealthfront and Betterment are two notable leaders in offering this premium feature.
Cash management account
E-Trade offers a basic savings account, and you can open it as another part of your E-Trade experience, meaning the account will appear on your dashboard along with your other accounts. The savings account pays a competitive interest rate, and it has the basic functions with no minimum, operating mainly as a place to amass your cash while you wait to invest it.
In contrast, some of the top cash management accounts give you checking-like features, including bill pay, a debit card and check writing, as well as early direct deposit, no monthly minimums or fees, no-fee ATMs and a competitive interest rate on your money. Two of the most popular are from the top robo-advisors Wealthfront and Betterment.
E-Trade requires a $500 minimum to get started with Core Portfolios, and sure, that’s not a lot in the big scheme of things. But it’s still higher than most rivals, who let you get started with no minimum at all. Still, it does beat a few rivals, such as Schwab Intelligent Portfolios, with its $5,000 account minimum, and Personal Capital, with a hefty $100,000 minimum.
Reduced feature set
E-Trade has eliminated features that clients may have found helpful, including access to financial consultants. With a robo-advisor, clients may not expect to speak with a human, but it’s certainly helpful if you have an unusual question. Many rivals don’t offer them, and frankly, this price point won’t get you an advisor on retainer. Still, it was a nice addition, and clients will have to turn to customer service via email, phone, chat or one of more than two dozen E-Trade offices. Unfortunately, some reports suggest that customer service isn’t what it used to be either.
A greater selection of tools could also aid clients in planning their financial futures with E-Trade.
Betterment5.0 Bankrate Score
Betterment offers a high level of service and features across every aspect of its robo-advisor, from its core investment management to low-cost funds to premium features such as tax-loss harvesting. You can also upgrade your service if you need unlimited access to human advisors, and get access to a feature-rich cash management account, too.
Axos Invest3.0 Bankrate Score
Axos Managed Portfolios offers a strong robo-advisor service with some premium features, all at a reasonable price. Clients also receive a wide choice of funds, including socially responsible funds, though the associated cash management account forces clients to jump through some hoops to receive what is only a mediocre interest rate.
Interactive Advisors4.5 Bankrate Score
Interactive Advisors has upped its game this year, with new features such as tax-loss harvesting that put it among the top robo-advisors. That’s on top of one of the widest range of investing choices, low-cost funds and low overall fees. As strong as all these features are, though, the robo-advisor doesn’t offer access to human advisors, not unusual among robo-advisors.
SigFig3.0 Bankrate Score
SigFig keeps costs low whether it’s account fees, fund fees or the annual management fee. You’ll also get access to human advisors and benefit from automatic rebalancing and tax-loss harvesting. But the lack of a cash management account and relatively high account minimums may cause some investors to look elsewhere.
Titan Invest3.0 Bankrate Score
Titan offers something unusual in the robo-advisor space: Titan combines its own actively managed investments with passively managed ETFs, something no other major robo-advisor does. It also hedges those portfolios, does not charge a management fee for the passive funds – a rarity among rivals – and has a low minimum, making it easy to get started.
Morgan Stanley Access Investing3.5 Bankrate Score
For younger investors looking to invest based on their values or certain themes, Morgan Stanley’s Access Investing provides a suitable option among robo-advisors. Investors can choose between impact portfolios that focus on environmental, social and corporate governance (ESG) issues, market-tracking portfolios that minimize fees and performance-based portfolios that attempt to outperform through active management.
J.P. Morgan Automated Investing3.0 Bankrate Score
J.P. Morgan Automated Investing provides portfolio management services with automatic rebalancing and may be a good fit for existing J.P. Morgan customers. But you’ll also pay above-average management fees and have limited account types to choose from. There’s also no tax strategy included in the offering.
Vanguard Digital Advisor3.0 Bankrate Score
Vanguard Digital Advisors keeps it simple: an investment portfolio comprised of four funds at a low all-in price, and then adds on helpful tools and educational components. The combination should do well for clients who don’t need a robo-advisor to provide everything under the sun but want competent investment management from a proven and knowledgeable leader.
Fidelity Go4.5 Bankrate Score
Fidelity Go offers a solid robo-advisor offering that beginning and cost-conscious investors will especially appreciate. However, investors looking for features such as tax-loss harvesting or comprehensive goal planning may be disappointed.
Personal Capital4.0 Bankrate Score
Personal Capital customers will get an experience that more closely resembles that of a traditional financial advisor than a robo-advisor, but you’ll need at least $100,000 to get started. You’ll also get a comprehensive tax strategy to help minimize what you owe to Uncle Sam. But this higher level of service does come at an above average cost compared to the rest of the robo-advisor industry.
Stash3.5 Bankrate Score
Stash’s managed portfolios might appeal to small investors who are looking to save as they spend, but the monthly fees can be high for investors who don’t have a large balance built up and there are only a few types of accounts available.
M1 Finance4.5 Bankrate Score
M1 Finance takes some of the best of what brokers and robo-advisors do and mixes it into a new service that provides automated investing in a fully customizable portfolio – all for no cost. If you want to take it up a notch, you can pay an additional fee and receive a host of upgraded features, including one of the best cash management accounts out there.
Wealthfront5.0 Bankrate Score
Wealthfront offers a strong lineup of features – sophisticated portfolio management using low-cost funds – that showcase why it’s one of the leading independent robo-advisors. It provides a strong cash management account, a robust planning tool and premium features such as tax-loss harvesting that may more than pay back your annual fee.
Ellevest3.5 Bankrate Score
Ellevest brings a competent and well-considered robo-advisor, pitching itself to women, whose financial needs are traditionally underserved. But don’t think it won’t work for anyone who needs nuanced investment management, since it offers low-cost funds, socially responsible funds and – unlike most rivals – a flat monthly fee, making it advantageous for those with more to invest.
Schwab Intelligent Portfolios5.0 Bankrate Score
Schwab Intelligent Portfolios provides a top robo-advisor experience that should be a good fit for many investors. The basic plan comes with no management fee and a low-cost portfolio, plus you’ll get Schwab’s top-notch customer support and easy-to-use platform. The premium plan comes with unlimited access to human financial advisors, but both plans come with above-average account minimums and tax-loss harvesting isn’t an option until you reach at least $50,000 in assets.
Acorns3.5 Bankrate Score
Acorns is a good choice for new investors who are starting with small sums of money, allowing customers to build a diversified portfolio with just a few dollars. However, the fees are above average for small account values, though they’ll decline as your portfolio grows, and you won’t find any tax strategy as part of the robo-advisor offering.
Wells Fargo Intuitive Investor4.0 Bankrate Score
Wells Fargo Intuitive Investor is a solid robo offering that gives customers easy access to human financial advisors at no additional cost along with tax-loss harvesting that can help you save on taxes. However, the management fee is above average unless you’re an existing Wells Fargo banking customer.
Ally Invest Managed Portfolios4.0 Bankrate Score
Ally Invest Robo Portfolios are a good option for new investors who pay particular attention to costs. Existing Ally clients may also appreciate having all their finances in one place. Unfortunately, Ally doesn’t offer tax-loss harvesting or provide human advisors to help with those especially difficult questions.
Merrill Guided Investing3.5 Bankrate Score
Merrill Guided Investing offers a credible investing service for Bank of America customers, but its high management fee makes it less attractive among a competitive field of robo-advisors. Merrill offers several positives, including access to human advisors and low-cost investment funds, but premium features such as tax-loss harvesting are missing.
SoFi Automated Investing4.5 Bankrate Score
SoFi Automated Investing gives cost-conscious investors a solid robo-advisor offering that comes with access to human financial advisors at no additional cost. But the lack of tax-loss harvesting and no socially responsible investing options may cause more sophisticated investors to look elsewhere.
Marcus Invest4.0 Bankrate Score
Marcus Invest offers the core feature of a robo-advisor – portfolio management – and then adds some twists, such as several portfolio types, all for a cost-competitive fee. It’s a great add-on for current Marcus customers, though some features of higher-end robo-advisors such as tax-loss harvesting and an expansive toolset are missing.