JP Morgan is rolling out a robo-adviser with free ETFs to lure new investors

via CNBC:

  • After years of development, J.P. Morgan is releasing a digital investing service called You Invest Portfolios.
  • For an annual fee of 0.35% of assets, J.P. Morgan will put users into an investment portfolio made up of the bank’s ETFs.
  • Unlike most rivals, J.P. Morgan is waiving fees for the underlying investments, which should cut investors’ costs by about 15 basis points, according to the bank.

J.P. Morgan Chase is making another bid to persuade banking customers to invest with the firm – this time, with a low-cost robo-adviser.

After a year of fine-tuning, which included user trials at 27 branches in Brooklyn, the New York-based bank is releasing on Wednesday a digital investing service called You Invest Portfolios. For an annual fee of 0.35% of assets, or 35 basis points, J.P. Morgan will put users into an investment portfolio made up of the bank’s exchange traded funds, or ETFs.

That fee is in line with what competitors from Morgan Stanley to Wealthfront charge for similar services, but unlike most rivals, the bank is waiving fees for the underlying investments. The ETFs J.P. Morgan will use range in cost from about 2 to 50 basis points, and users will typically save an average of roughly 15 basis points in fees through the service, according to Jed Laskowitz, the J.P. Morgan executive who runs You Invest.

“We think we’re offering really great value at 35 basis points given the integration with the Chase experience and our rebating of all of the underlying ETF expenses,” Laskowitz said.

The move by J.P. Morgan represents its push to grab market share from competitors and broaden the pool of Americans who are invested in the stock market. Only about half of Americans own stock through mutual funds, retirement accounts or individual equities, and just 31% of those below the age of 30 own shares, according to a 2017 Gallup report.