Overview of the Best Managed Investment Accounts
Besides brokerage accounts, investment-advisory accounts, also known as managed accounts, can be opened
at E*TRADE, J.P. Morgan, and Charles Schwab. Because the available products, services, fees, and minimums vary so much, you should read through this article before opening an account with any of the three.
Key Takeaways
• Investment-advisory accounts are available at J.P. Morgan, Charles Schwab, and E*TRADE.
• Only E*TRADE and Schwab have robo accounts.
• Fees and minimums for managed accounts vary widely among these three firms.
Find a Financial Advisor
If you are looking for a professional money management service in your area, you can
find a Financial Advisor on the Wiser Advisor
(or read
Wiser Advisor review).
Find a Financial Advisor
|
|
Charles Schwab's Managed Account
In addition to a large lineup of self-directed brokerage accounts, Charles Schwab runs a strong investment-advisory business. This side of the company offers both automated and traditional accounts. The automated option is a lower-cost choice for customers who want portfolio management. The service, called Intelligent Portfolios®, does not charge an advisory fee. There is a $5,000 starting minimum.
An account opened through the Intelligent Portfolios program is fully automated. A computer program determines what to buy and sell. The same technology also monitors the account and places trades, which are limited to ETFs. There are no other asset classes available.
Schwab advisory clients who want to invest in more than exchange-traded funds can choose one of the company’s traditional managed programs. These are overseen by human advisors rather than software alone. In other words, a real advisor performs the role that the robo program handles automatically. A broader list of investment products is available in these accounts. Choices include stocks, mutual funds, and bonds.
The drawback is the higher cost. Depending on account balance, the annual fee can range from 0.90% to 0.20%. And the deposit requirement rises to $25,000 or more, depending on the exact program selected. The company’s Wealth Management service requires $500,000 to get started.
An investment-advisory account at Schwab can be opened either online or through a local financial advisor (the latter option is required for a Wealth Management account). The company has more than 400 branch locations, which are useful for full-service accounts.
Read Charles Schwab Review
Charles Schwab Review »
Charles Schwab Website
Visit Schwab Website
|
|
Managed Accounts at E*TRADE
Up next is E*TRADE. The investment firm starts with a simple robo service called Core Portfolios. Like Intelligent Portfolios, a computer program trades a short list of ETFs. The service costs 0.30% annually and has a $500 minimum starting balance. One nice feature of Core Portfolios is automatic tax-loss harvesting for eligible taxable accounts. Schwab’s robo program, by comparison, only offers tax-loss harvesting for accounts of at least $50,000.
Not all accounts need tax-loss harvesting, though. Individual Retirement Accounts, for example, generally do not benefit from it because they are tax-deferred. A Core Portfolios account can be opened as a personal IRA, and many retail brokerage and retirement accounts with a U.S. address are eligible.
Like other robo programs, E*TRADE’s automated-investing service monitors accounts on a daily basis and rebalances them as needed. The digital program uses portfolio-allocation technology to build and maintain portfolios.
It’s possible to customize a robo portfolio at E*TRADE by selecting smart-beta or socially responsible investment strategies. It’s also possible to increase or decrease the recommended risk level, which is determined through an online questionnaire provided by the robo advisor.
Existing self-directed brokerage accounts at E*TRADE can be converted into a Core Portfolios account, which is a nice feature for E*TRADE clients thinking about trying automated investing.
Robo investing is the only advisory program offered directly through E*TRADE, although E*TRADE clients are now part of Morgan Stanley. Investors who want a traditional full-service relationship can work with a Morgan Stanley financial advisor instead. These accounts come with a broader set of services than Core Portfolios. Besides access to many more investment products, investors may also be able to receive a personalized financial plan through a local advisor.
In exchange for the added services and investment choices, fees and minimums on a full-service advisory account through Morgan Stanley can be much higher than those in the Core Portfolios program. Exact pricing and minimums depend on the program selected.
Read E*TRADE Review
E*TRADE Review »
|
|
Managed Accounts at J.P. Morgan
The lone investment firm in this survey without a robo program is J.P. Morgan. The company does offer traditional advisory accounts through multiple channels, though. One route is through a J.P. Morgan Financial Advisor or a Private Client Advisor, who can help place clients into one of several managed-account programs. These programs have different pricing schedules and minimums depending on the specific strategy and account type selected.
One benefit of working with J.P. Morgan is the ability to get personalized guidance from a human advisor. A dedicated Private Client Advisor, for example, can provide ongoing support and help build a custom investment strategy. Through this setup, brokerage accounts are also available.
Private Client Advisor offers multiple advisory programs, each with its own pricing and minimum balance. Current published minimums range from $10,000 to $100,000, while maximum advisory fees generally range from 0.70% to 1.45%, depending on the program selected.
In return for the higher minimums and fees, Private Client Advisor customers can receive a great deal of personal attention and access to more services. Besides the standard lineup of stocks, funds, and bonds, some programs can include more specialized offerings, such as SMAs (separately managed accounts), and certain strategies may provide access to alternative investments for eligible clients. Many account tax structures are also available, including custodial accounts and 529 plans.
Investors who sign up for the Private Client Advisor program may also qualify for various perks through Chase’s broader banking relationship, depending on account type and client status.
A managed account opened through J.P. Morgan’s advisor-led programs generally must be opened through an advisor, although the process can begin online. In the case of a Private Client Advisor, an in-person meeting with a local financial professional may be part of the process.
The company’s low-cost alternative, J.P. Morgan Investing, which does offer online account opening for self-directed investing, does not currently offer a robo program.
Read J.P. Morgan Advisors Review
J.P. Morgan Personal Advisors Review »
|
|