JPMC Hops On Robo-Advisor Bus

JPMorgan Chase is launching a lower-cost online investment management tool this week: the robo-adviser.

According to news from Reuters, the company plans to offer the service to some clients next March and on a wide scale in the middle of the year. The required disclosures were expected to be filed on Wednesday with the U.S. Securities and Exchange Commission. JPMorgan Chase could start testing it this week, with fewer than 100 employee accounts.

The service, piloted as JPMorgan Digital Investing, is the latest in a number of online investing tools called robo-advisers that firms offer as a low-cost way to get basic advice and automated portfolio management. With consulting firms estimating the services could be managing more than $10 trillion within several years, financial companies, including Morgan Stanley, Wells Fargo and Bank of America Merrill Lynch have jumped on board to offer the financial management tool.

The goal of the robo-adviser is to offer “guidance and advice for a broad range of clients, whether you have a few thousand dollars or more,” said Kelli Keough, head of digital wealth management.

The service asks such questions as customer age, risk appetite and objectives, then suggests investments, like diversified exchange-traded funds, which often are selected by an investment committee. Computers rebalance portfolios according to preset rules.

JPMorgan plans to set its fees for the public by March, Keough said. It will also lower the $5,000 minimum investment being used during testing with employees. “We are exploring and testing a variety of different pricing mechanisms,” Keough said.

Chief Executive Officer Jamie Dimon said last year the bank could offer the service free or as part of a package of products.

The bank developed the investment adviser in-house with InvestCloud, a financial software firm that it hired and invested in last year to improve its online, mobile banking and investment offerings.


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