Report: startups could change the way we invest

Post on November 01, 2013

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A new analysis of online investment startups suggests that websites offering computer algorithm-based investment advice are the most likely to shape the investment industry.

An Oct. 29 report by Corporate Insight, a New York City-based research firm, evaluates a rash of more than 130 startup online financial companies, ranging from those that provide investment advice, to those that offer real estate crowdfunding or tuition-financing alternatives.

Analyst Grant Easterbrook writes that a dozen or more of the algorithm-advice sites that have popped up in the past couple of years and attracted millions in venture capital have the best potential to impact the investment markets because they address “the lack of affordable, objective and rigorous portfolio analysis and investment advice.”

Firms like Jemstep, Personal Capital and SigFig may attract young investors with business models that use computer algorithms to manage investment funds for better returns and lower fees than traditional models offered by brokerages and financial planners.

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