Most major online stock brokers have introduced their own robo-advisor platforms, and E*TRADE's version is called E*TRADE Core Portfolios. Importantly, the robo-advisor shines with its customer service, competitive fees, and low account minimum of just $500. In this E*TRADE Core Portfolios review, we'll take an in-depth look at how this robo-advisor platform works, what it costs, and its features.
With great access to customer service, low-cost investments, and automatic rebalancing, E*TRADE Core Portfolios is a great option for anyone with at least $500 to start investing.
$0 per trade, management fee 0.30%, expense ratio 0.06%-0.12%
This robo-advisor is a good fit for: Hands-off investors that want to put their investments on cruise control and manage their money needs under one roof.
E*TRADE Core Portfolios has a highly rated customer service department and flexible support hours. Clients and potential clients can speak with a specialist weekdays from 8:30 a.m. until 8:30 p.m. EST.
E*TRADE requires a $500 initial investment, which is on the lower end of the range among the best robo-advisors -- some don't have a minimum deposit requirement, while others require minimums of $5,000 or more.
E*TRADE Core Portfolios invests client assets in portfolios made up of low-cost exchange-traded funds, or ETFs, which have underlying expense ratios ranging from 0.06%-0.12%.
In addition to its standard customized portfolio options, E*TRADE Core Portfolios allows investors to choose specific focuses, such as tax-advantaged portfolios and strategies that exclusively invest in socially-responsible ETFs.
Like most other robo-advisors, E*TRADE offers periodic rebalancing of client accounts to maintain the target asset allocation. E*TRADE rebalances only twice a year, significantly less frequently than some rivals, but it's still a nice feature.
E*TRADE Core Portfolios integrates with other accounts on E*TRADE's platform, which allows clients to see all of their accounts in one place, and facilitates smooth transfers into and out of the Core Portfolios account. Any existing E*TRADE account can also be easily converted into a Core Portfolios account.
E*TRADE Core Portfolio charges a 0.30% annualized management fee, far lower than you'd pay for a human financial advisor, but on the higher end of our favorite robo-advisor platforms.
Unlike some of its competitors, E*TRADE Core Portfolios doesn't offer tax-loss harvesting strategies, which can save many investors a lot on their taxes. The platform does offer a portfolio of tax-sensitive ETFs specifically designed for clients who are worried about tax implications, but this is still a downside of E*TRADE's offering.
According to E*TRADE's website, "For Core Portfolios clients, interaction with E*TRADE Capital Management will generally be limited to the web-based interface." You can speak with a Core Portfolios specialist, but this is more along the lines of technical support, not financial advice.
If you want a lower management fee: Betterment offers both a lower management fee and has no account minimum, in addition to including tax-loss harvesting. But Betterment isn't a fit for investors seeking a full-featured broker that allows them to manage some of their investments by themselves while setting aside other fund for automated strategies.
If you want want the best of both worlds, a robo-advisor and access to human advisors: SoFi Automated Investing offers its robo-advisor customer unlimited access to registered investment advisors. SoFi Automated Investing also has lower fees with no management fee and expense ratios on its funds.
E*TRADE's application process is seamless, making it a great broker for beginners who are filling out a new brokerage account application for the first time. New clients first fill out a quick but thorough questionnaire to help E*TRADE assess their risk tolerance and investment goals. Next, clients see a recommended portfolio, plus an alternative. For example, E*TRADE might think you have a high risk tolerance based on the questionnaire, but if the recommended portfolio seems too risky, there’s a second option that might be a better fit.
There are some customization options, including tax-advantaged investments, investing exclusively in socially-responsible companies, or using so-called "Smart Beta" ETFs to potentially boost returns. You can also open an E*TRADE Core Portfolios account as a standard individual or joint brokerage account, a custodial account, or an individual retirement account (IRA).
Once you've accepted a portfolio option, chosen customizations, and made your opening deposit, you can start investing with a simple click of the mouse. E*TRADE monitors portfolios and rebalances them semi-annually to make sure the target investment allocation is maintained, and accounts integrate nicely with other E*TRADE brokerage and bank accounts.
Like most robo-advisors, E*TRADE Core Portfolios has two types of ongoing investment fee. You'll pay a flat management fee to E*TRADE, equal to 0.30% of your assets per year. This translates into $3 for every $1,000 in your account. In addition, your portfolio's investment funds (exchange-traded funds, or ETFs) have their own fees, known as expense ratios.
In terms of all-in pricing, E*TRADE is in the middle of the pack when it comes to our favorite robo-advisors. The account management fee is on the higher end, while its ETFs are quite reasonably priced.
|SERVICE/ITEM||E*TRADE CORE PORTFOLIOS COST|
|Account management fee||0.30%|
|Investment fund fees||0.06%-0.12%|
|Other account charges||$75 transfer-out fee|
There are two types of support that robo-advisor clients might need -- investment advice from a human being, and help with technical issues. Here’s how E*TRADE Core Portfolios stacks up.
When it comes to technical support, E*TRADE Core Portfolios shines. It has a highly-rated customer service department, and the hours are flexible. You can call and talk to a Core Portfolios specialist anytime from 8:30 a.m. until 8:30 p.m. EST.
On the other hand, E*TRADE Core Portfolios clients generally don't have access to human financial advisors. Some rival robo-advisors provide access to financial planners who can provide guidance if, say, a client wants to save to buy a house. E*TRADE Core Portfolios clients don't get this level of advice.
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E*TRADE services are available just to U.S. residents.
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