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E*TRADE Core Portfolios is E*TRADE’s robo-advisory service that provides you with professional investment portfolio management for a small fee.
E*TRADE describes this product as “efficient digital wallets guided by you”. This means that you enter your goals, investment schedule and risk tolerance, and E*TRADE Capital Management designs a customized investment portfolio for you. It adapts to market changes by rebalancing as needed.
Commissions and fees – 7
Customer service – 9
Ease of use – 7
Tools and resources – 7
Investment options – 7
Asset allocation – 8
7.5
E*TRADE’s entry into the robo-advisory space, Prime Portfolios, makes sense for existing E*TRADE clients. Provides stellar customer service. However, there are better robo investing platforms on the market with smaller minimum requirements.
The platform offers a fully managed investment account that is perfect for someone who wants to invest but doesn’t want to get involved in the day-to-day details of the process. Our review includes how it all works, the fees, and how to decide if this robo-advisor is right for you.
Pros Cons
pros
- It offers some smart beta and ESG portfolio options
- Invest in funds with low expense ratios
- Good customer service
- Low $500 minimum funding requirement
- Access other E*TRADE tools and research as a customer
- ESG and beta smart portfolios are available
against
- It does not offer tax loss harvesting
- Fewer customization options than other robo advisors
- No cash management account
Main characteristics of E*TRADE wallets
| Minimum investment | $500 |
| commissions | 0.30%/year |
| accounts |
|
| 401(k) Assistance | |
| Recovery of tax losses | |
| Portfolio rebalancing | |
| Automatic deposits |
Daily, weekly, fortnightly and monthly |
| advice | human assisted |
| Smart beta | |
| Socially Responsible | |
| Fractional actions | |
| Customer service | Phone: MF 12A-11:59P ET; Live Chat: 24/7 |
How do E*TRADE Basic Wallets work?
E*TRADE Core Portfolios starts with a three-step process:
- Step 1: Complete your investor profile. This is a series of questions designed to establish your goals, time horizon, and risk tolerance. Your portfolio is built from this information.
- Step 2: Review your investment proposal. You will receive a tailored proposal. You can choose from a portfolio of all exchange-traded funds (ETFs) or a combination of ETFs and mutual funds.
- Step 3: Deploy your wallet. If you accept the custom designed wallet offered and meet the minimum investment requirement, you can activate the wallet.
Unlike traditional managed portfolios, master portfolio accounts do not have an individual portfolio manager. Instead, portfolio management is managed by E*TRADE Capital Management through its Investment Policy Committee and with the support of Investment Strategist. They will select, remove and add portfolio holdings and determine the rebalancing methodology.
If you want personalized assistance from a human, you can select one of E*TRADE’s other investment products, such as blended portfolios or dedicated portfolios, for a higher fee.
what does it offer
E*TRADE is a leading online broker and is one of our favorite investment platforms at Investor Junkie. But its main wallet robo advisor also has excellent features and holds its own in the competitive robot landscape.
Two types of investment portfolios
You can choose between a portfolio composed entirely of ETFs or one that includes a mix of ETFs and mutual funds.
The fully ETF portfolio it consists of index funds with very low operating costs specifically designed to adapt to the evolution of the general markets. The portfolio offers an opportunity to achieve broad diversification at a very low cost.
The hybrid portfolio consists of both ETFs and mutual funds. Use ETFs to provide low-cost diversification, but add mutual funds if actively managed funds are determined to add value to the portfolio. This gives the investor the opportunity to pursue investment returns that have the potential to outperform the overall markets. You can also opt for some ESG investment options, although this is not what E*TRADE specializes in.
In both cases, E*TRADE core portfolios use funds that provide exposure to multiple market segments. Your portfolio typically consists of six to eight funds. The mix may include large- and small-cap stocks, emerging markets, international markets, medium- and short-term bond funds, Treasury Inflation-Protected Securities (TIPS) and high-yield bonds.
Portfolios are made up of funds from iShares, Vanguard and other fund families, while mutual funds are provided by a larger number of fund families. Basic portfolios avoid the use of E*TRADE’s own funds in the construction of these portfolios.
Very little cash is kept in any type of wallet. In fact, the cash position is limited to a 1% allocation. Any cash beyond that is moved to funds.
Automatic rebalancing
Like other leading robo-advisors, Core Portfolios rebalances your portfolio based on E*TRADE Capital Management’s portfolio allocation drift parameters. Your portfolio “self-adjusts” by comparing your portfolio allocations to the target allocation drift parameters each trading day after the markets close.
When necessary, trade orders are sent on the next trading day to align the portfolio with target allocations.
Account protection
Accounts are protected by SIPC, which provides coverage of up to $500,000 per account, including $250,000 in cash. This coverage provides protection against broker failure and not against market value fluctuations.
E*TRADE offers additional brokerage protection. It has additional coverage from the London insurers with an aggregate limit of $600 million to pay amounts additional to those returned in a SIPC liquidation, provided that (1) the combined return of Trustee, SIPC and London distributions to any customer does not exceed $150. million, and (2) as a sublimit, London’s return of cash to any customer does not exceed $900,000. Like SIPC, this coverage does not protect against loss of market value of securities.
Low minimum deposit
There is a minimum deposit requirement of $500 to open an E*TRADE Core Portfolio account. It’s in the same ballpark as competitors like Betterment and Wealthfront, which charge $0 and $500 respectively.
If your account balance falls below this level, your account will remain open. However, E*TRADE will eventually ask you to add additional funds to bring the account up to $500. This is considered to be the minimum balance required to maintain the portfolio.
E*TRADE Core Portfolios mobile application
E*TRADE Core Portfolios are available as mobile apps for both iPhone and Android as well as tablets. Apps provide:
- Stock, ETF and Mutual Fund Research, including E*TRADE’s All Star Fund List and Evaluator
- Live streaming quotes including level II and charts
- Enhanced quote details for stocks, ETFs, options and indices
- Conditional orders, including trigger-other (OTO), contingent and stop-loss
- Mobile check deposit by taking a photo
- Customizable dashboard that can include portfolio top performers, open orders banner and portfolio related news and watchlist
How much do basic E*TRADE wallets cost?
E*TRADE Core Portfolios charges an annual advisory fee of 0.30%. The fee is charged to your wallet at the beginning of each quarter. You also pay fund-related expense fees, as will be the case with all robo-advisory services. These fees will be slightly higher in the hybrid portfolio as it also includes mutual funds.
How can I contact E*TRADE?
You can contact E*TRADE Core Portfolios customer service by calling 866-484-3658 weekdays from 8:30 AM to 8:30 PM ET.
Better alternatives
The robo advisor world is crowded and competitive. But despite the competition, E*TRADE Core Portfolios stands, offering a competitive service and a good variety of portfolio options for investors.
However, the lack of tax loss harvesting is a drawback for this robo-advisor, as is the lack of in-depth portfolio customization options. And E*TRADE’s annual fees are slightly higher than some popular alternatives:
Options like Betterment and Wealthfront are great if you want slightly lower annual fees at just 0.25% per year. Betterment also has more ESG investment options, while Wealthfront offers more customization options. And both robo advisors have cash management accounts so you can earn significant interest on your idle cash. Finally, both Betterment and Wealthfront have tax loss harvesting unlike E*TRADE.
You can also consider options like M1 and SoFi Automated Investing, which don’t charge annual fees. But if you’re an existing E*TRADE brokerage client, it might make sense to stick with your robo-advisor. And the platform’s hybrid wallet helps make up for the lack of in-depth wallet customization.
bottom line
E*TRADE Core Portfolios offer most of the benefits typical of robo advisor investment management platforms. However, the fees are a bit above the norm and a tax loss harvesting service would be a nice addition to the mix.
As a broker, E*TRADE is one of the best in the business. Their robo advisor is also a solid product, although not the best choice if you want the lowest possible fees and more portfolio customization.
