Overview of the Best Managed Investment Accounts
You can open managed investment accounts, also known as advisory accounts, at E*Trade, J.P. Morgan, and Charles Schwab. Each offers different products, services, fees, and minimum investment requirements, so it’s wise to review these details before choosing one.
Key Takeaways
• You can open advisory accounts at J.P. Morgan, Charles Schwab, and E*Trade.
• Only E*Trade and Schwab offer automated advisory accounts, known as robo advisors.
• Fees and minimum investment amounts differ significantly between these three companies.
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Charles Schwab's Best Managed Account
Charles Schwab not only offers a range of self-directed brokerage accounts but also provides an advisory service. This includes automated accounts with no advisory fees and a $5,000 minimum, called Intelligent Portfolios®.
The Intelligent Portfolios service is automated; a computer program manages trades and monitors the account, focusing exclusively on ETFs. No other types of assets are included.
For those looking for more variety, Schwab also offers traditional managed accounts, which are handled by human advisors. These accounts allow investments in stocks, mutual funds, and bonds.
These traditional accounts have higher costs, with annual fees ranging from 0.90% to 0.20%, and require at least $25,000 to start. Schwab’s Wealth Management service starts at a $500,000 minimum.
You can open a Schwab advisory account online or through a local advisor—the latter is necessary for Wealth Management accounts. Schwab has over 300 locations for in-person services.
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Top Managed Accounts at E*Trade
E*Trade offers an automated advisory service called Core Portfolios, which manages a selection of ETFs for a 0.30% annual fee and requires a $500 minimum balance. This service includes tax-loss harvesting, which can be beneficial for taxable accounts.
Tax-loss harvesting isn’t necessary for tax-deferred accounts like IRAs, but it’s an available feature. Core Portfolios can be set up as personal IRAs, though not for business IRAs or trusts.
E*Trade’s robo-advisor automatically monitors and rebalances accounts daily, using Modern Portfolio Theory to create balanced portfolios.
You can customize your investment choices in Core Portfolios at E*Trade, including the risk level and type of ETFs, like socially responsible options.
Existing E*Trade accounts can be converted into Core Portfolios accounts, making it easy for current clients to switch to automated investing.
While E*Trade focuses on automated investing, its parent company Morgan Stanley offers traditional managed accounts with a broader range of services and investments. These accounts require higher minimum investments and fees but provide more personalized financial planning and a wider selection of investment options.
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Managed Accounts at J.P. Morgan
J.P. Morgan, unlike the other firms, doesn’t offer a robo-advisor. Instead, it provides traditional advisory accounts. Its Personal Advisors program gives access to a team of advisors over phone or video, creating personalized financial plans and portfolios for an annual fee of 0.60% to 0.40%. The minimum balance required is $25,000.
While Personal Advisors doesn’t offer a dedicated one-on-one planner, the Private Client Advisor program does. It assigns a personal advisor to each client for more tailored guidance, and you can also access other account types through it, including brokerage accounts.
This program has a range of options with different fees and minimums, from $10,000 to $100,000 to start, and annual fees from 0.30% to 1.45%.
Private Client Advisor clients receive more personalized attention and a broader array of services and investment choices, including unique options like hedge funds and separately managed accounts (SMAs). Various tax-advantaged accounts, such as custodial accounts and 529 plans, are also available.
Customers of the Private Client Advisor program also enjoy perks from Chase Bank, like reduced mortgage rates and lower costs for wire transfers.
To start with J.P. Morgan, you can initiate the process online, but a Private Client Advisor account will require a meeting with a financial planner.
Although J.P. Morgan Investing, which previously offered a low-cost robo-advisor, has discontinued this service, it no longer offers managed accounts online.
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