Automated online managed account services are faring very
well, Corporate Insight says in a new report, “Next-Generation Investing: The
“Fintech firms introduced a new business model—the automated
online managed account—that incumbents and startups alike are rallying behind,”
Corporate Insight says. Online managed accounts invest in exchange-traded funds (ETFs) and, in
some cases, mutual funds. They have a minimum investment as low as
$5,000 and typically charge less than 50 basis points of assets.
“The online managed account model has emerged as the clear winner
when it comes to investing and personal finance startups,” Corporate Insight
says. “Many of the other direct-to-consumer models have not fared as well.
Managed account providers like Betterment, Personal Capital and Wealthfront
have continued to win new client assets. Today, these three firms alone manage
$13.4 billion in assets, almost $5.5 billion more than 11 leading startups
managed in July 2015.”
In 2015, Charles Schwab and Vanguard launched online managed
account services, and this year, Capital One Investing, E*TRADE, Fidelity Investments, Merrill Edge and TD Ameritrade launched or announced their intention
to launch such services. Recently, BlackRock and Invesco acquired online
managed account firms FutureAdvisor and Jemstep, respectively.
Those interested in ordering a copy of “Next Generation Investing:
The Incumbents Arrive” can contact Corporate Insight Sales and Marketing
Associate Erin Bosetti at firstname.lastname@example.org.