Online financial advice platform Jemstep raises $4.5 million

Jemstep Inc., an online financial advice platform, has raised $4.5 million in new funding, company officials announced Thursday. The venture capital financing lifts the Los Altos, Calif.-based startup company's fundraising tally to $15 million, which company officials will use to improve their product, hire new employees and expand distribution, according to spokeswoman Jessica Kipp. The algorithm-fueled Jemstep platform walks clients through a step-by-step process that suggests a risk- and age-adjusted asset allocation, and advice on whether to buy, sell or hold existing investments. Jemstep is one of a growing cast of developers, including FutureAdvisor and Financial Guard, making software that tries to replicate the experience of getting individualized investing guidance for the vast majority of Americans whose low net worth disqualifies them from seeing traditional financial advisers. Among Jemstep's features is a line item that indicates how much management and advisory fees make a dent in an investment portfolio's returns. Jemstep, which is a Securities and Exchange Commission-registered investment adviser, touts its product as a vastly cheaper and more accessible alternative to private wealth managers. The company offers a basic account for free and tracks some $2 billion in assets for 10,000 investors, company officials said.