E*TRADE is a top stock broker for investors who want to DIY. But what if you’d rather be a hands-off investor?
That’s where E*TRADE Core Portfolios comes into the picture. It’s a robo-advisor, meaning it uses computer algorithms to create and maintain a portfolio for your specific investing needs.
In this review, we’ll take a look at E*TRADE Core Portfolios to help you determine if it’s a good fit for you.
Product Name: E*TRADE Core Portfolios
Product Description: For investors who want to "set it and forget it," E*TRADE offers its Core Portfolios robo-advisor service. It's easy to use Core Portfolios, and there isn't a whole lot of customization to get bogged down in. However, E*TRADE Core Portfolios is a bit on the pricey side, and there are few tools and features, including tax-loss harvesting.
- Commissions & Fees
- Account Options
- Investment Options & Asset Allocation
- Tools & Resources
- Website / App / Ease of Use
- Customer Service
When it comes to Commissions & Fees, E*TRADE Core Portfolios is on the more expensive side of the robo-advisor industry, at 0.30%. Although it offers the basic Account Options you’d expect, you can find a wider variety (including 529s, trusts, etc.) with some of the competition. As for Investment Options & Asset Allocation, E*TRADE doesn’t offer much in the way of customization, and all portfolios are based on stock and bond ETFs, but that’s par for the course with robo-advisors. Unfortunately, unlike some other robo-advisors, E*TRADE Core Portfolios doesn’t offer much in the way of Tools & Resources. However, its Website / App / Ease of Use makes investing easy for beginners, and Customer Service can be reached 24/7 by phone.
E*TRADE Core Portfolios Features
|E*TRADE Core Portfolios||Features|
|Commissions & Fees||0.30%|
|Types of Investments||Stock and Bond Funds|
|Types of Accounts||Individual, Joint, Traditional IRA, Roth IRA, Rollover IRA, SEP IRA|
|Asset Allocation||Five Risk-Based Portfolio Mixes|
|Automatic Portfolio Rebalancing||Yes, Semiannually|
|Human Advisor Availability||None|
|Banking Services||Checking Accounts|
|App Availability||iOS, Android, Mobile Optimized Website|
|Customer Service||Email, Chat, Phone, Branch Offices|
|FINRA CRD Number||#29106|
|SEC Registration Number||#8-44112|
- 24/7 Phone Support. If you need assistance, E*TRADE’s customer service team is available 24/7 over the phone.
- E*TRADE Integration. If you also have an E*TRADE self-directed brokerage account, you can easily transfer some or all of your portfolio into a Core Portfolios account.
- Socially Responsible Investing. SRI is a hot investing topic right now, and E*TRADE Core Portfolios investors can choose to include a socially conscious ETF in their portfolios.
- Smart Beta. Smart beta strategies seek to outperform a benchmark index. You can harness their power by including a smart beta ETF in your portfolio mix.
What Is E*TRADE Core Portfolios?
E*TRADE was a pioneer in the online stock brokerage space. And since its founding in 1991, it’s become one of the most popular investment brokerage firms in the industry. Like several online brokers, a few years ago, E*TRADE rolled out its own professionally managed investment option, E*TRADE Core Portfolios.
E*TRADE Core Portfolios is a robo-advisor offering a fully managed portfolio of some of the most popular exchange traded funds in the industry. Like other robo-advisors, E*TRADE Core Portfolios first determines your investment goals, time horizon, and risk tolerance, and then creates a portfolio based on that investment profile.
Once you invest your money with E*TRADE Core Portfolios, the portfolio is fully managed for you, including periodic rebalancing and reinvestment of dividends. It’s all done for an annual management fee that’s well below what’s charged by traditional human-guided investment advisories. Your only responsibility will be to fund your account. E*TRADE Core Portfolios does all the rest.
How Does E*TRADE Core Portfolios Work?
When you open an E*TRADE Core Portfolios account, you begin by completing an eight-part questionnaire that assesses your risk and investing goals.
Once you complete the questionnaire, your answers are analyzed, and a portfolio recommendation is provided.
E*TRADE Core Portfolios
E*TRADE will recommend one of five potential, diverse portfolios. No matter which you choose, your portfolio will be comprised of low-cost ETFs (E*TRADE doesn’t specify exactly which ETFs it uses).
The five portfolio options are:
- Aggressive Growth. 99% stocks, 1% bonds
- Growth. 80% stocks, 20% bonds
- Moderate Growth. 60% stocks, 40% bonds
- Conservative Growth. 40% stocks, 60% bonds
- Conservative. 20% stocks, 80% bonds
If you wish, you can customize your portfolio by adding either a socially responsible ETF or a smart beta ETF to the mix.
E*TRADE Core Portfolios Fees
E*TRADE charges a flat 0.30% annual management fee on Core Portfolios accounts. Although this is much lower than what a traditional financial advisor charges, it’s a bit on the high side for a robo-advisor.
E*TRADE Core Portfolios Pros & Cons
E*TRADE Core Portfolios Pros
- Easy to Use. It’s easy to set up an E*TRADE Core Portfolios account. All you have to do is answer eight questions and select the portfolio that E*TRADE’s algorithms select for you. The portfolios aren’t particularly customizable, which can be a good thing for hands-off beginners. Too much customization can defeat the purpose of a set-it-and-forget-it portfolio.
- Branch Offices. Core Portfolios customers can take their questions and concerns to an E*TRADE branch office for assistance.
- 24/7 Phone Support. You can access a customer service team member at any hour of any day.
- E*TRADE Offers sign up bonuses for new accounts.
E*TRADE Core Portfolios Cons
- No Tax-Loss Harvesting. Tax-loss harvesting is a strategy that can help you recoup your investment losses at tax time. Whereas many robo-advisors offer this service, E*TRADE Core Portfolios doesn’t. Instead the robo-advisor does use a tax-sensitive strategy, but it’s not the same.
- No Planning Tools. Many other robo-advisors offer financial planning and goal-setting tools and features. There’s nothing like that with E*TRADE Core Portfolios.
- Relatively High Fees. E*TRADE Core Portfolios charges a 0.30% annual management fee, which is slightly higher than the competition.
- High Minimum Balance. You must deposit at least $500 to invest with E*TRADE Core Portfolios. Many other robo-advisors don’t require any minimums.
E*TRADE Core Portfolios is a decent choice for anyone who already has an E*TRADE brokerage account and is looking to move at least some of their portfolio into a managed investment option.
And since E*TRADE is also a full-service brokerage, E*TRADE Core Portfolios could be a good fit for anyone who wants to maintain a hybrid arrangement of both self-directed and manage portfolios.
Everyone else might want to check out some of the other robo-advisors available. E*TRADE Core Portfolios is on the more expensive side of the industry, and it lacks many of the tools and features you’d expect.