24 KIPLINGER’S PERSONAL FINANCE^ 02/2020INVESTING
As of September 30, 2019. *Composite benchmark
return consists of 60% MSCI ACWI All Cap index and
40% Bloomberg Barclays Global Aggregate Bond in-
dex. SOURCE: Backend Benchmarkingan account with its Personalized Plan-
ning & Advice service. At Vanguard’s
Personal Advisor Services, you need
$50,000 to start, and the annual fee
is 0.30% of assets (the fee drops for
balances above $5 million). Personal
Capital’s $100,000 minimum is even
higher, and its 0.89% fee is a bigger
annual nut, too (the fee tiers decrease
for balances over $1 million). But the
account comes with robust technical
tools and eye-catching graphics that
allow you to dissect and view your
portfolio by asset class or holding,
among other things.Investors Who Want to Bank
and Invest All in One Place
Two robos are waging a small war
over the rest of your cash. Wealthfront
and Betterment recently offered high-
yield cash accounts to customers.
Wealthfront’s pays 1.82%; Better-
ment’s pays 1.85%. Wealthfront plans
to add bill paying and direct deposit
features, as well as ATM debit cards.
“This is the stepping-stone to the fi-
nancial nirvana we’re trying to build,”
says Wealthfront spokesperson Kate
Wauck. For its part, Betterment is now
testing a no-fee checking account and
debit card that it plans to roll out in
early 2020.
Meanwhile, SoFi Invest already
offers ATM withdrawals, a debit card,
check-writing and a 1.6% yield on
a cash management account, called
SoFi Money, that is connected to its
robo product. Customers’ money “is
all in one account in which they can
save and spend,” says Brian Walsh,
manager of financial planning at SoFi.
Customers at Merrill Guided Investing
get a discount, starting at 0.05 per-
centage point, on the 0.45% annual
management fee if they bank at the
firm’s parent company, Bank of Amer-
ica, and have a combined balance be-
tween both firms of at least $20,000.
The bigger the combined balance, the
bigger the discount. ■Investors With
Multiple Goals
Juggling life’s big-ticket purchases,
such as a home or college, with the
biggest goal—retirement—is difficult.
The sign-up process at Merrill Guided
Investing allows you to work toward
multiple goals with different time ho-
rizons. You’ll have to set up different
accounts to do so, as each goal will be
assigned a separate portfolio, depend-
ing on how close you are to your goal
and other factors. But you’ll be able to
see all of your accounts on a single
“dashboard” at Merrill Edge.Investors Who Want to
Talk to an Actual Person
If robo advisers are a good first step
for investors into the world of invest-
ment advice, then a hybrid robo adviser,
which combines automated investing
advice with a human touch, is a solid
second one.
These services typically start as a
robo, with a digital accounting of your
goals and investments. A consultation
via phone or computer with an adviser
follows. He or she can craft a more
customized strategy—which could
include individual stocks, bonds and
mutual funds as well as ETFs—and
answer questions about other finan-
cial issues, such as budgeting or when
to claim Social Security.
Five years ago, Vanguard’s Personal
Advisor Services and Personal Capital
were among the only hybrid advisers.
(Both firms offer only hybrid services
at the moment, though Vanguard is
getting ready to launch its own digital-
only advisory service.) Today, many fi-
nancial firms that offered digital-only
services at first, including Betterment,
Fidelity, Merrill Edge and Schwab, now
have hybrid robo services that include
access to a licensed broker or a certi-
fied financial planner.
Expect to fork over more to open
such an account. Fidelity Go’s digital-
only service has no minimum, for in-
stance, but you’ll need $25,000 to open(^) By the Numbers
A Robo Portfolio
Report Card
Thanks to Backend Benchmarking, which
tracks the robo adviser industry by open-
ing accounts with real money at each
firm, we can see how some robo advisers
have performed over the past three years.
The Martinsville, N.J., advisory firm,
in its quarterly Robo Report, recently re-
ported that for the three years ending
September 30, 2019, Fidelity Go and
Axos Invest had the best-performing
moderate-risk portfolios.
For this ranking, Backend Benchmark-
ing tracked the taxable portfolio at each
firm that is closest to a diversified mix of
60% stocks and 40% bonds, both U.S.
and international. Even so, these portfo-
lios are not exactly the same. Some have
as little as 60% devoted to stocks, and
some have as much as 70%. In addition,
the allocation to U.S. stocks versus inter-
national stocks varies from firm to firm,
as does the fixed-income allocation to
U.S. and international bonds. We created
a composite benchmark of the MSCI All-
Country World Index All Cap (at 60%)
and the Bloomberg Barclays Global
Aggregate Bond index (at 40%) to use
as a general reference point.
FIRM
3-year
annualized
return
Acorns 6.01%
Axos Invest 7. 6 1
Betterment 6.66
ETrade 7. 0 0
Fidelity Go 7. 6 1
Personal Capital 6.11
Schwab 6.23
Vanguard 7. 0 4
Wealthfront 6.98
COMPOSITE BENCHMARK 6.23%
CONTACT THE AUTHOR AT NELLIE [email protected].