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March 2018 Robo-Advisor News – Overstock, Amazon, TD Ameritrade + More

March 2018 Robo Advisor News – Insights and Updates

The robo-advisory wars are heating up with new features, lower prices and more. First, M1 Finance eliminated management fees. Next, Ellevest, the women-focused robo-advisor lowered investment management fees and added human advisors, and now TD Ameritrade is ramping up with new changes. With the digital investment landscape running in the fast lane, it’s tough to keep up with the March 2018 robo-advisor news.

TD Ameritrade’s Essential portfolios now offers tax-loss harvesting in their taxable accounts. Account holders can access their investments through Facebook Messenger, and Amazon Alexa. Users can also logon to their investments with the TD Ameritrade Portfolios app using Face ID on the iPhone X.

Research on users of TD Ameritrade’s robo-advisor found that the majority of their client’s aren’t the Millennials one would anticipate, but Baby Boomers and the older Silent Generation. Seems as though older investors recognize the simplicity, efficiency, and low cost benefits of digital investment portfolios.

Women are more likely to enroll in TD Ameritrade’s robo advisor across all generations with the most females opting in from Millennials and Generation X.

Across all generations, millennial’s have the highest risk tolerance. With the most time until retirement, a high risk tolerance makes sense for younger investors.

More March 2018 Investing and Robo-Advisor News

“Amazon Eyes Banking: Will it Launch a Robo Advisor?” by Steve Garmhausen – Barrons.com

“If I told you Amazon will eventually be your rival in the advisor space, would you bet against me?

The everything store is already dipping its toes into financial services, having entered talks with JP Morgan Chase and other firms about what the Wall Street Journal calls a “checking-account-like product” for retail customers.

We recently wrote about Overstock’s new robo-advisor, and why the firm’s 40 million monthly customers should force the wealth industry to take it seriously. Well, Amazon has 90 million paying Amazon Prime subscribers in the United States, not to mention its regular customers.”…..

“Laughing at Overstock.com’s robo advisor? Its CEO has some thoughts about that” by Suleman Din – Financial-planning.com

“Could there be any clearer sign that wealth management is being commoditized than Overstock.com offering robo advice?

“Unbiased artificial intelligence drives financial advising,” the e-commerce giant declared on Wednesday, a statement it obviously didn’t run past NAPFA.

Immediately, financial advisors reacted on social media with obvious jeers and puns. No doubt, it’s hard to resist pointing out this is Overstock.com, after all, the same dot-com you might check out when you’re looking for affordable furniture, a coffee maker or a new handbag; the same dot-com that had the actress on TV telling you why “it’s all about the O.”

But consider how quickly the robo advice model has evolved, the implications of what it means to democratize financial advice and the crusading motivations of Overstock’s CEO, and you might want to reel in the jokes.”…..

March 2018 robo-advisor news - Amazon, Overstock, TD Ameritrade + More

“Robo-Advisors Encouraging Millennials to Invest, But Do They Understand How It Works?” by James Hamory – Lendedu.com

“We have found that an alarming percentage of robo-advisor users are naively attributing their portfolio growth directly to their specific investment services rather than general market performance. In addition, we have found that many of these investors have false understandings about how their portfolios will perform in poor market conditions.

It was also revealed that a significant portion of investors, who primarily use a robo-advisor, would consult a human financial advisor if the market took a sudden downturn. On another note, we found that robo-advisors are attracting first-time investors, including the ever-so-absent millennials, to the stock market.”…..

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“5 Predictions for Robo Advisers and Digital Advice in 2018” by Allessandra Malito – MarketWatch.com

“Digital investing advice has evolved in the past several years from digital-only to a hybrid that includes advice from human beings — and assets on these platforms have grown substantially. In 2018, experts expect that trend to continue, but with a face-lift for the traditional and hybrid “robo advisers.”

It’s estimated that robo advisers, which are online automated investment platforms, managed $166 billion in 2017, and by 2018, that number will be more than $435 billion, according to research firm Aite Group. Some of the well-known leaders in the digital advice realm include Betterment, Personal Capital and Wealthfront, though many more entrants have joined since those three started in the late 2000s — including most of the large investment firms, like Fidelity and Vanguard.”…..

“The Ways Robo Advisors Stand Apart” by Barbara Friedberg – U.S. News and World Report

As new players put their own spin on a growing industry, robo advisors are evolving and replicating the exchange-traded fund industry, which began with passive index-tracking funds and now include endless varieties from sector to actively managed hedging funds.

Business Insider Intelligence predicts that robo advisors will manage approximately $1 trillion by 2020 and $4.6 trillion by 2022. “The first generation of robo advisors offered basic portfolio management and maintenance,” says Will Trout, head of wealth management research at Celent. That standard fare typically consisted of a risk assessment quiz, asset allocation and ETF portfolios to match the investor’s risk profile.

Yet, as competition increases, robo advisors keep adding other services and investments to stand out and attract business. “The robo advisory world is big enough to accommodate many types of players,” says Kalen Holliday, director of communications at robo advisor Interactive Brokers Asset Management, formerly known as Covestor. From plain vanilla WiseBanyan to Hedgeable, which lets you invest like hedge funds do, robo advisors are taking on more flavors than Baskin-Robbins. Here are several distinct varieties to consider.”

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Barbara A. Friedberg, MBA, MS

Barbara A. Friedberg, MBA, MS

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