J.P. Morgan Automated Investing at a glance
Pros: Where J.P. Morgan Automated Investing stands out
Like other robo-advisors, J.P. Morgan Automated Investing asks you a series of questions when you open an account. The service gauges your risk tolerance and goals – when you need the money, for what purpose and how much you can invest – then it crafts your portfolio based on those answers. You can do this even before you’ve officially opened the account, so you can see the portfolio types, the types of funds and the allocations.
The robo-advisor classifies its portfolios into four broad categories, with various hypothetical allocations:
- Conservative: 75 percent fixed income / 25 percent stock
- Moderate: 50 percent fixed income / 50 percent stock
- Growth: 25 percent fixed income / 75 percent stock
- Aggressive: 10 percent fixed income / 90 percent stock
After you’ve completed the questionnaire, the app will match you with a portfolio type (for example, a growth portfolio), and provide you with the preset allocations, down to the individual ETFs. If you don’t like that selection, you can usually pick an adjacent portfolio (say, moderate) and receive a different allocation. Or you can simply run through the questionnaire again with new answers to get a different allocation.
The portfolios are built using eight ETFs, which are then mixed and matched at different weightings.
If you’re selecting a retirement account – traditional and Roth IRAs are both available – you’ll also be able to use the robo-advisor’s “glide path strategy.” This strategy gradually moves your investments from an aggressive (more stock, less bonds) to conservative (less stock, more bonds) allocation as you approach your indicated retirement date.
Mix of funds, but uneven costs
The mix of funds available at J.P. Morgan Automated Investing is on the lighter side, though it represents the most important asset classes. In other words, the robo-advisor can still build you a diversified portfolio even if it doesn’t use a huge number of funds to do so. About the only robo with a more limited selection of ETFs is Vanguard Digital Advisor, which runs with just four funds.
This limited selection may not be the worst thing in a financial industry that is often given over to needless complexity. Automated Investing does include eight funds covering the basics: U.S. stocks, REITs, emerging markets, developed markets and various bond funds.
The expense ratios on the funds are uneven, in part because the robo-advisor uses both actively managed and passively managed funds. For example, its U.S. stock fund charges a mere 0.02 percent, and it’s an index fund priced about the cheapest you can find anywhere. That equals a fee of about $2 a year for every $10,000 you have invested.
But its actively managed emerging-market fund charges 0.33 percent, while one active bond fund charges 0.4 percent, or fees of $33 and $40 for every $10,000 you have invested. These are not especially high in the fund world, but definitely on the higher side in the robo world.
It’s worth mentioning here that the robo-advisor will credit any fees you pay for its in-house ETFs to your management fee. For example, if you’re paying an average of 0.1 percent on J.P. Morgan ETFs, that amount will be credited as a payment of your management fee. That’s a move that Marcus Invest also makes, and it helps offset the conflict of interest in recommending its funds when other lower-cost funds are potentially available in the market.
That said, the portfolios have a mix of funds, so even if you own a little bit of the pricier funds, you’ll have other lower-cost funds that will pull down your average fees. And as noted above, it may all be moot anyway, since fund fees are effectively rolled into the management fee.
Automatic rebalancing is something of a standard feature in robo-advisors today, but it’s still worth mentioning that J.P. Morgan’s service does provide it, given that it’s missing some other typical features.
Rebalancing helps your portfolio stay on track with its target allocations. As the various investments in your portfolio grow at different rates, they’ll move away from their targets. For example, stocks typically grow faster than bonds, and so you’ll wind up with higher stock allocations over time. Rebalancing brings it all back into alignment with your long-term goals.
Integration with other J.P. Morgan Chase accounts
If you already have some or all of your financial life at Chase, this robo-advisor account may appeal more to you. You’ll be able to consolidate your investment accounts – including a J.P. Morgan Self-Directed account, if you have one – and banking accounts with one institution. You’ll be able to see it all on one dashboard, giving you a bird’s eye view of your financial life. It’s a useful benefit that no other robo-advisor can offer, though they’re trying to consolidate their own customers, too.
So if that “one-stop shop” appeal fits with your needs – and you’re not too demanding of your robo-advisor – then J.P. Morgan’s offering may be what you’re looking for.
J.P. Morgan distinguishes itself from other robo-advisors by offering customer service representatives via phone six days a week. This might not seem exceptional, but in the increasingly digital world of financial services, it is often difficult to get a person on the phone to answer questions. You’ll be able to speak with a J.P. Morgan representative 13 hours a day Monday through Friday, and during regular business hours on Saturday.
J.P. Morgan Automated Investing is a solid, if unspectacular, robo-advisor that likely appeals the most to existing customers of the bank who are interested in keeping their accounts in-house. The all-in cost – including the management fee and the refunded credits from investing in the company’s ETFs – probably won’t have you paying much more, if any, than you would for a top-tier robo-advisor. But you won’t be getting the same level of tools and features.
For those who need more comprehensive tools, Betterment and Wealthfront are solid options. Those looking for human advice could turn to Schwab Intelligent Portfolios (though you’ll need more money to access the feature) or Ellevest, which offers an à la carte advisor option.
And if you’re looking to simply grow your relationship with your existing bank, Goldman Sachs offers Marcus Invest, Bank of America offers Merrill Guided Investing and Fidelity offers its Go portfolio manager, among other larger institutions.
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