Throughout 2017, the brokerage industry saw a growing trend of the pairing of digital advice with human advisors. Three firms in particular—TD Ameritrade, Charles Schwab and Betterment—introduced or made changes to existing digital advice models. TD Ameritrade rebranded its legacy Amerivest Portfolio service as Selective Portfolios, which provides automated managed accounts paired with guidance from financial advisors. Charles Schwab introduced Schwab Intelligent Advisory, which provides live advice and portfolio recommendations from planning consultants who are Certified Financial Planners. Similarly, Betterment introduced new, higher-tiered service options that provide clients with access to human advice. Most recently, Ellevest, a digital advice platform geared specifically toward female investors, followed suit, with a few unique twists.
In September 2017, the platform raised another $34 million in a round of funding led by RethinkImpact, a venture capital firm that looks for companies run by women. With the help of this funding, Ellevest restructured its offerings to provide three tiers of service: Ellevest Digital, Ellevest Premium and Ellevest Private Wealth Management. Investors can access the robo-advisor itself, Ellevest Digital, for just 25 basis points, whereas previously, the firm imposed a 50-point fee for all users. This service does not require an investment minimum and includes tax minimization strategies and text and email support. Ellevest Premium imposes a $50,000 minimum and an annual fee of 50 basis points and offers personalized goals-based planning from a CFP. Through a partnership with Forshay, a career coaching and executive recruiting firm, it also provides advice on preparing for a job interview, negotiating a salary and asking for a raise. The third-tier option, Ellevest Private Wealth Management, resembles a traditional RIA relationship. It imposes an investment minimum of $1M and an annual fee of 90 basis points and includes a dedicated advisor. Investing options are particularly focused on “driving social impact and advancing women.” Overall, Ellevest’s expanded offerings show tremendous promise in the race to closing the gender investing gap, arming women with more tools than ever to prosper financially.
The growing trend of firms’ providing digital advice paired with a human touch shows no signs of slowing down. It speaks to the innate desire of customers to receive tangible reassurance that they are on the right track to achieving their financial goals. It also reiterates the notion that purely digital advice offerings are not a one-size-fits-all solution because certain investor segments will always want or need access to a human advisor. With these expanded human offerings, firms can also attract larger audiences, namely older, wealthier customers.