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Lawrence McOchillo

What is the minimum amount required for a robo-advisor account at E-Trade?

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E-Trade Financial Corp (NASDAQ:ETFC) today announced that it had reduced the minimum amount required for a customer to access its robo-advisor services. The previous amount of $5,000 has been lowered to $500 in an effort to attract more customers.

The robo-advisory services allow investors to benefit from professionally managed portfolios (its Core Portfolios product) at a fraction of the commissions charged by traditional investment accounts and at an affordable account minimum of just $500.

The Core Portfolios product charges a 0.30% annual advisory fee as opposed to the 2% minimum management fee charged by most advisors, which makes the account very attractive to individuals with low incomes and minimal savings.

Given that recent surveys indicate that a significant percentage of American households cannot afford to cater for a $400 emergency with cash, the recent move by E-Trade targets such households that still have a desire to invest.

The company remains at the forefront of innovation given that most millennials do not have a lot of funds to invest but have a long time to do so as they have decades of work ahead, but they may prefer to start investing now.

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