A look at today's generation of online RIAs

JAN 27, 2014
Client numbers and assets under management, when available, are drawn from regulatory filings or company officials.

Betterment Holdings Inc.

Clients: 20,000 AUM: About $300 million Betterment lets users select from a series of goals, such as building a tax-advantaged retirement account, developing a safety net or planning a vacation. From a few bits of client input data, the system creates an asset allocation and portfolio of exchange-traded funds to achieve that goal. The website automatically re-balances the portfolio and invests dividends, and tells users how likely it is that they will achieve their goal. The service is offered for 0.35% of assets annually for accounts under $10,000, 0.25% for accounts above $10,000 and 0.15% for accounts above $100,000. No trading or transaction fees.

FutureAdvisor (Xulu Inc.)

Clients: 100 AUM: $13 million In addition to the common set of online portfolio management tools such as account aggregation and automatic re-balancing, FutureAdvisor's algorithm recommends low-fee index funds diversified to gain exposure to small-cap companies. The service is free for monitoring investments and $19 a month for portfolio management features.

Jemstep Inc.

Clients: 10,000 AUM: N/A The registered investment adviser offers account monitoring, projections of retirement income and asset allocation advice for free. Jemstep also can alert customers to what they should buy and sell in their portfolios to reach a suggested allocation with the cheapest products. Those premium features are free for accounts under $25,000 and go up to $69.99 per month for larger accounts.

LearnVest Inc.

Clients: 2,400 AUM: N/A LearnVest gives users tools to look at their financial and investment accounts, as well as their savings objectives. It also partners users with a certified financial planner by phone or e-mail to help them set goals for areas such as budgeting, insurance, estates, big purchases and investing. Setup fees, depending on the type of account, start at $89, and the program costs $19 per month.

Personal Capital Corp.

Clients: 805 AUM: $252 million The firm provides investment guidance and data online, as well as on its iOS and Android mobile applications. Former Paypal Inc. chief executive William H. Harris Jr. runs the firm and said that it plans to hire 100 advisers over the next two years. Personal Capital takes direct aim at the bricks-and-mortar industry. The firm's advisers work with an investment committee that prefers to deviate from traditional market-capitalization-weighting strategies in selecting individual stocks and ETFs for clients. The firm charges 0.95% on accounts under $250,000, a fee that decreases on larger accounts.

SigFig Wealth Management

Clients: 309,000 AUM: N/A SigFig's free service takes in data on investment accounts, tabulates how much poor-performing investments cost a portfolio, and compares users' investment strategies and performance against others. The website also identifies the effect of fees, such as those charged for “late settlement,” and notes whether a manager is more expensive than his or her competition yet doesn't beat the market. The firm has apps for Android, Apple and Windows smartphones. SigFig also has built an index that tracks the performance of all the investors who synchronize their accounts on the website.

Wealthfront Inc.

Clients: 4,500 AUM: $400 million Wealthfront builds its users a portfolio of ETFs across six asset classes, with a strong preference for funds with low cost, low tracking error or divergence from a benchmark's return and low lending of underlying securities, as well as high market liquidity. The website promises services such as tax loss harvesting and portfolio re- balancing, all with a relatively small minimum balance of $5,000. Fees of 0.25% annually start when account balances surpass $10,000. — Trevor Hunnicutt

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