From Free Trades to Travel the World – Robo-Advisors Innovate
Just when it seems like there can’t possibly be new and exciting things happening in the investing sector, robo-advisors are there to prove you wrong. This month brought a lot of change in the robo-advisor scene. Although some robos, like Hedgeable and WorthFM, ended up closing their doors this year, we still have a lot to look forward to.
Free Trades – Yea!
One of the most notable events is that Wealthsimple rolled out a new product just for investors in Canada. Wealthsimple Trade, a variation of the Wealthsimple robo-advisor, offers an unlimited number of commission-free trades and over 8,000 stocks and ETFs, Wealthsimple Trade has a lot to offer Canadian investors looking for free stock market investing. (You must be a Canadian citizen in order to use Wealthsimple Trade.)
Wealthsimple Trade is similar to the original Wealthsimple robo-advisor, (available in the U.S., Canada and the U.K.) but without the investing advice. Although operating under a variation of the same name, Wealthsimple Trade has a different prerogative: instead of offering holistic investing advice and retirement planning, Weathsimple Trade functions strictly to help investors make low-cost trades. Since making smart investing and trading decisions is part of a balanced retirement portfolio, Wealthsimple Trade is worth a look for readers residing in Canada.
For US investors seeking free investing check out our M1 Finance Review. M1 Finance offers the opportunity to invest in stocks and ETFs for free. And, M1 rebalances and manages your investments too.
More Robo-Advisor Movement
It might seem like opening another specialized robo-advisor to handle trades is oversaturating the market. However, it is usually precisely those robo-advisors in very specific niches that have long-lasting impacts on the robo arena. Take Wealthfront, for example. Our first piece of robo-advisor news this month looks at the ways Wealthfront meets the growing demand for mini-retirements by honing in on clients’ desire to quit their jobs and travel the world before they reach 70 years of age!
Still other robo-advisors, like Twine, keep simplicity front and center in order to keep the appearance of a startup—essentially, staying noticeably cutting edge and easy to use.
Finally, although some news sources this month feared that robo-advisors are starting to lose popularity, others noted that leading experts are convinced robo-advisors are here to stay. The key to success? Adaptability.
More Robo-Advisor News from August 2018
This month’s robo-advisor news covers questions like “are there too many robo-advisors available already?” and “how can a robo-advisor help me travel the world?” There’s more good news than bad; robo-advisors that are adaptable are consistently meeting or exceeding the needs of their investors.
“Why It’s Time to Quit Your Job Travel the World” by Ben Steverman at Bloomberg.com
“The sabbatical—a chance to recharge midcareer—is hardly a new idea, and it’s still common in academia. But until recently most wouldn’t dream of quitting their jobs just to have fun for a year or two. And, as Gratton acknowledges, doing so is still a financial impossibility for the vast majority of workers.
For well-paid workers in high-demand fields such as technology, however, the idea may be catching on.
Wealthfront Inc., the online money manager based in Silicon Valley, launched a tool on Wednesday that allows clients to estimate whether they can afford to take time off for travel. They can set a months- or years-long trip as a priority alongside other goals like retirement or buying a home.”……
“How Twine, John Hancock’s Robo-Adviser Tool, Keeps a Startup Feel” by Suman Bhattacharyya at Tearsheet.com
“For a 155-year-old financial institution, building a digital finance tool that can hold its own among a sea of popular apps isn’t easy.
But John Hancock wants to change that narrative with Twine, its robo-adviser and personal finance tool it released last month. Twine emphasizes simplicity in its look and feel — a user interface similar to many startup-developed apps out there.”…..
“Qplum Expands Product Suite to Derivatives for Institutional Clients” from BusinessInsider.com
June, 2019 – Qplum is closing due to various business factors.
For investors seeking an active investment strategy that try to outperform the market, please consider: 6 Active Investment Robo-Advisors That Strive to Beat the Market.
“QMAP gives investors access to a diversified investment strategy that trades across different geographies and asset classes. It trades futures such as fixed income, equity indices, foreign-exchange, commodities and volatility. There is a drawdown control-based risk management in place.
The strategy is built using qplum’s proprietary, deep learning framework that already powers other portfolios offered by the firm.”…..
“Have the Wheels Come Off the Robo-Advisory Market?” by Finextra.com
“Hedgeable follows in the footsteps of WorthFM, SheCapital and Owners Advisory, in withdrawing from an increasingly crowded market, which is finding its difficult to lure high net worth investors away from the clutches of top tier banks and high-touch advisory boutiques.
GlobalData’s 2018 survey of wealth managers found that just 10% of private wealth managers feared they would lose market share to robo-advisors over the next 12 months, a big turnaround from the hype-fueled advance of the robots over previous years.
Those HNWs who do place their faith in robo-advisors appear to be handing over only a small portion of their wealth to the digital-only platforms. Ellevest, the female-focused service launched to great fanfare by former Bank of America and Citi executive Sallie Krawcheck in 2016, currently looks after just $7.400 per client on average. Hedgeable ended with $47,000 per account on average, despite marketing specifically to the HNW category.”…..
“Are There Too Many Robo Advisors?” by Barbara Friedberg at USNews.com
“Several robo advisors recently closed their doors, such as Hedgeable, which had been around for over eight years. WorthFM was a women-focused platform that didn’t make it. These two closures fall on the heels of the recent demise of digital financial planning startup LearnVest, just three years after it was acquired by Northwestern Mutual for $250 million.
Despite such closures, experts believe robo advisors are here to stay. There might not be an over-abundance of robo advisors, but there could be the wrong mix of digital advisors to suit the market.
If the experts are correct, robo advisors will evolve, merge and transform.
Room for growth in the robo advisor industry. Roi Tavor, co-founder and chief executive officer of Nummo in Zurich, Switzerland, doesn’t think there are too many robo’s.
“Today, we still see less than 100 robo-advisors available in the U.S.,” Tavor says. “Compared to 35,000 SEC registered investment advisor firms and 11,500 banks and credit unions, this is a very small number.”…..