An intriguing entrant to the robo-advisory arena is Acorns, an SEC Registered Investment Advisor. The idea behind this firm’s approach is to enable investors to “invest the change” (aka “acorns” or relatively small amounts of money) that will build over time into a sizable portfolio.
Vanguard is an investment management firm that serves personal investors with a broad range of offerings, including low-cost, market-index mutual funds and ETFs, discount brokerage services, and advisory services. The company is owned by its clients (who own Vanguard funds) so investment costs are relatively low.
The company’s founder, John (Jack) Bogle, launched market-index mutual funds for individual investors through Vanguard. The company remains a leader in index investing through its mutual funds and ETFs but also offers actively managed funds and facilitates investing in individual stocks and non-Vanguard funds through its brokerage service. Learn about the mutual fund company and brokerage firm in this review.
To test the local advisers’ skills and integrity, I worked with my initial contact to execute the rollover of a 401(k) plan to an IRA; and then make investment recommendations that I either approved or rejected. Based on recent successes, the adviser seemed confident of recommended investments and their superiority to other choices.
I didn’t mention to the sales rep that I had a significant amount of money in an IRA in a separate account, possibly available for management for the right person. Again, my goal was to evaluate the adviser’s integrity and knowledge and then possibly expand our relationship.
Initially, I was pleased with the service. The rollover was completed and funds invested. But when another adviser replaced my initial contact, a new and improved recommendation was made. I was happy to test this new person’s investment savvy. But later I felt that the change in investments may have been contrived just to generate a sale. The investment did not seem superior and the adviser did not maintain the relationship.