Budgeting app Douugh launches robo advice

An Australian fintech company is trying to break into the already competitive robo-adviser sector with a hybrid financial budgeting, banking and digital advice app. 

Meet Douugh, a five-year-old startup that announced Wednesday the launch of its new SEC registered robo-adviser feature called Douugh Wealth. The robo allows users to choose between six types of portfolios using exchange traded funds from BlackRock, Invesco, Vanguard, State Street, Impact Shares and First Trust that are curated by investment experts, according to the announcement. Douugh Wealth also offers a set of socially responsible investments.

Already, Douugh offered checking and saving accounts as well as automated budgeting and spending that allocated money in virtual “jars” for bills or an emergency fund before rolling out the digital advice feature. 

Douugh Wealth has goals of capturing the 33% of Americans that said they would increase investing post-pandemic, and the 45% that said the pandemic had set back their long-term financial security, according to a recent DriveWealth report.

Users can open an account with Douugh Wealth with no minimums and no brokerage or management fees, but it will cost $4.99 a month, plus a $0.50 withdrawal fee. 

"Douugh Wealth's core investment philosophy is straightforward and based on the understanding that the generation we belong to will be forever influenced by a rapidly changing path adapting to technological innovation and sustainability factors on an almost daily basis," said Douugh Head of Wealth Tom Culver in a statement. 

"A well-diversified, balanced portfolio tilted to emphasize exposure to innovative and highly defensible technology and sustainably focused themes may lead to superior long-term investment returns," he said. 

There are plenty of apps that help users budget, like Personal Capital and Acorns. Independent robo-advisers Betterment and Wealthfront offer similar services, too, providing users with digital advice features and diversified investment portfolios composed of ETFs and index funds. Both robos also offer banking services. 

By comparison to Douugh, Betterment does charge a 0.25% annual advisory fee for its investment account, but there’s no minimum balance. Wealthfront requires a $500 deposit for the investment account and charges an annual advisory fee of 0.25%. 

Competition has been heating up in the robo-advice market this year as new players enter the space, acquisitions expand scale and account openings surge. 

Goldman Sachs’ Marcus Invest and Stash’s Smart Portfolios entered the playing field. Betterment announced its acquisition of Wealthsimple Inc.’s U.S. book of business, while M1 Finance pushed its valuation to $1.4 billion — and got caught up in a Twitter spat with Wealthfront. Social Finance Inc. announced it’s going public with a blank-check company that values the upstart at around $8.7 billion.