JPMorgan Launches Robo-Adviser: 'We Think We're Offering Really Great Value'

Banking giant JPMorgan Chase & Co. JPM is ready to release its new robo-adviser platform after a year of testing, according to CNBC.

What Happened

JPMorgan's new digital investing service, You Invest Portfolios, makes use of algorithms to select investment options tailored to individual customer needs. Eliminating a human element in investment management will lower costs for the consumer that typically amount to at least 1% of all assets under management, according to CNBC. 

Instead, JPMorgan will charge customers an annual fee of 0.35% (35 basis points) to invest their capital in investment portfolio made up of the bank's ETFs. Unlike rival platforms at other big banks, JPMorgan won't charge any additional fees for the underlying investments in the ETFs.

"We think we're offering really great value at 35 basis points given the integration with the Chase experience and our rebating of all of the underlying ETF expenses," JPMorgan's Jed Laskowitz told CNBC.

Why It's Important

Only half of all Americans have some form of exposure to the stock market, according to a 2017 Gallup report.

By age group, only 31% of Americans below the age of 30 own stocks; JPMorgan's new service could make stock investing more attractive to the general population.

JPMorgan requires a $2,500 minimum for its new service, which is relatively small compared to to what's required by most financial advisers.

The service is designed to be user-friendly, with "no app to learn," Kelli Keough, JPMorgan's global head of digital wealth management, told CNBC.

What's Next

JPMorgan said it plans on introducing new features and updates to its You Invest Portfolios, including exposure to the options market and the ability to track investments held at other institutions.

The bank plans to lower the minimum to invest in its service to as low as $500 by 2020, according to CNBC. 

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