Thursday, 28 January 2021

E-Trade Core Portfolios Review 2019

E-Trade Core Portfolios Review 2019
07 Aug

E-Trade is a known trusted discount online broker, but it also offers something else for individuals who don’t want to manage their investments. Core Portfolios, E-Trade’s version of a robo-advisor, allows you to answer a few simple questions about your investment goals and risk tolerance, and then uses your answers to custom-design a portfolio that’s right for you.

In this E-Trade Core Portfolios review, you’ll see how users can benefit from the helpful customer service and intuitive mobile and online apps E-Trade provides, but also have an appropriate mix of assets selected for them. While fees are a bit above what many competitors charge for robo-advising services, E-Trade’s easy-to-use interface makes Core Portfolios a great choice if you want a hands-off approach to investing.

Who should consider E-Trade Core Portfolios?

The field of robo-advising is getting crowded, with established discount brokerages like E-Trade now offering alternatives to companies like Wealthfront and Betterment, which provide robo-advising only.

It’s not surprising robo-advising is a popular investing tool. It’s an ideal solution for investors seeking a hands-off approach to diversification and looking for help managing money — but who don’t want to pay significant fees.

While E-Trade is a little costlier than competitors, Core Portfolios may be a good choice if you don’t mind paying a premium for stellar customer service, a simple process for building your portfolio, low-cost investment options, and excellent mobile and online tools to invest and manage your money.

E-Trade Core Portfolios fees and features

Amount minimum to open account
Management fees
Account fees (annual, transfer, inactivity)
  • $0 annual fee (however if your account balance falls below $500 for an extended period of time, you may be asked to add additional funds)
  • $75 full account transfer fee
  • $25 partial account transfer fee
  • $0 inactivity fee
Current promotions

Pay no advisory fee for one year.

Account types
  • Individual taxable
  • Roth IRA
  • Joint taxable
  • Rollover IRA
  • Rollover Roth IRA
  • Custodial Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
  • Custodial IRA
  • E-Trade offers 5 ETFs in the core portfolio.
Automatic rebalancing
Tax loss harvesting
Tax loss harvesting detail A tax sensitive investment strategy that uses municipal bond ETFs, which may help to reduce taxes on account interest and dividends.
Offers fractional shares
Ease of use
Mobile app iOS, Android
Customer support Phone, 24/7 live support, Chat, Email, 30 branch locations

Strengths of E-Trade Core Portfolios

E-Trade Core Portfolios has some important advantages that make this robo-advisor worth considering. Benefits include:

  • A simple process for picking investments. When you sign up for Core Portfolios, E-Trade makes the process of choosing the right investments simple. You’re asked to choose an individual, joint or custodial taxable account or a retirement account, and to specify when you’ll need the money. Then you’re walked through a series of questions aimed at determining your risk tolerance. E-Trade will recommend a portfolio for you, which you can customize if you desire.
  • Multiple portfolio options full of affordable exchange-traded funds (ETFs.) You’ll have a choice of portfolio options with Core Portfolios, including a Smart Beta Portfolio or a Socially Responsible portfolio. The Smart Beta portfolio puts some of your investments into ETFs aimed at enhancing overall returns, although transaction costs may be higher because of higher turnover. The Socially Responsible portfolio allows you to invest based on your values by limiting investments to companies known for being good corporate citizens. Each portfolio is full of low-cost ETFs, so costs are kept to a minimum.
  • Automatic rebalancing. E-Trade makes hands-off investing easy because your investment portfolio is automatically adjusted to maintain the ideal asset allocation.
  • Excellent customer service. As a Core Portfolios customer, you have access to in-person customer service at more than 30 E-Trade branches. You can also reach out to customer support online via chat or email, or speak with a registered financial consultant via phone. Customer service representatives are friendly and well-informed, and you can talk with someone via online chat within minutes.
  • E-Trade integration. You can easily convert your E-Trade account to a Core Portfolios account. You also have access E-Trade’s helpful mobile and online apps, which provide educational materials and account information in an intuitive and easy-to-understand format.

Drawbacks of E-Trade Core Portfolios

No E-Trade Core Portfolios review would be complete without discussing the potential disadvantages, including the following:

  • E-Trade has a minimum balance requirement. You’ll need at least $500 to get started. Compare this to Betterment, which has no minimum deposit requirement for its robo-advisor.
  • Higher management fees. E-Trade charges 0.30% in management fees for Core Portfolios. This is higher than the 0.25% charged by Betterment’s basic account and by Wealthfront.
  • No tax-loss harvesting: While E-Trade claims to use a tax-sensitive investment strategy, it doesn’t offer tax-loss harvesting. Tax-loss harvesting involves selling losing investments in taxable accounts to reduce capital gains taxes paid on investment gains. Many other robo-advisors offer tax loss harvesting as an option, particularly for portfolios with higher investment balances.

Is E-Trade Core Portfolios safe?

E-Trade has been operating as a discount broker for many years and is well-respected. It’s a FINRA member, which means that it’s met licensure and regulatory requirements. It also is both FDIC-insured and a member of SIPC, which means cash in your accounts is protected — up to a certain dollar value — in case E-Trade faces financial trouble.

But when you invest with E-Trade, your money is put into ETFs that could perform well or could perform poorly. Your investments may decline in value, and there’s always a risk to investing in the market. E-Trade tries to match your investment portfolio with your risk profile — if you’re more risk-averse, your money will go toward safer investments. But there is always a danger you’ll lose money when you invest.

You should carefully research investment options to find out if you’re comfortable with E-Trade’s robo-advisor service managing your money.

Final thoughts

Investing in Core Portfolios gives you access to E-Trade’s extensive infrastructure, including local branches and renowned web and mobile apps. Although the minimum balance requirement and management fees are higher than competitors, great customer service and the easy process used to assess your investment risk makes E-Trade Core Portfolios a great choice for investors looking for hands-off solutions.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Christy Rakoczy

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