The bottom line: E*TRADE Core Portfolios offers notably low expense ratios and deep educational resources, as well as specialty investment options to match a variety of risk profiles and investment aims.
Pros & Cons
Extensive investor tools and educational resources.
Strong customer service.
Low investment-expense ratios.
Specialty portfolio options.
No tax-loss harvesting.
Compare to Other Advisors
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E*TRADE is known for active traders, but hands-off investors will find much to like about its robo-advisor offering, E*TRADE Core Portfolios.
Core Portfolios offers low investment expense ratios and specialty investment choices, including socially responsible ETFs and a smart beta ETF as well. Besides the portfolio options, customers gain access to an impressive arsenal of investor tools and educational resources, including financial planning guidance from investment advisor representatives.
E*TRADE Core Portfolios is best for:
Current E*TRADE customers.
E*TRADE Core Portfolios at a glance
Account management fee
Investment expense ratios
Average management fee for taxable portfolios is 0.07%. Average management fee for all portfolios is 0.08%.
Account fees (annual, transfer, closing)
$75 full transfer out fee; $25 for partial transfer out.
Socially responsible portfolio options
Clients can choose to invest in SRI portfolio options for no additional fee.
• Individual and joint non-retirement accounts.
• Custodial accounts.
• Roth, traditional, rollover and SEP IRAs.
All brokerage accounts automatically enrolled in a tax-sensitive investment strategy.
No tax-loss harvesting.
Drift and semiannual rebalancing.
Human advisor option
Clients do not have an individual financial consultant or portfolio manager assigned to the account. However, clients can consult with investment advisor representatives who have their Series 7 and 66 designations. Some employees have their CFP designations.
Bank account/cash management account
E*TRADE offers a premium savings account.
Customer support options (includes website transparency)
Team of investment advisor representatives available Monday-Friday, 8:30 a.m. to 8:30 p.m. Eastern. Live customer service representatives available 24/7 via phone or chat.
Where E*TRADE Core Portfolio shines
Integration with E*TRADE brokerage accounts: The $500 minimum applies specifically to an E*TRADE Core Portfolios account, rather than an aggregated balance across all E*TRADE accounts. However, existing E*TRADE clients can use the intra-firm transfer tool to easily convert their accounts to Core Portfolios. You don’t need to sell any securities before doing so — the robo-advisor will do that for you by liquidating holdings that aren’t in your recommended portfolio, commission-free. (You may, however, have capital gains or losses in the process.)
Clients also have access to all of the educational content provided by E*TRADE, which is extensive: Investors can learn about topics such as how to build an emergency fund and how to perform complex options trades. E*TRADE's website also provides impressive retirement planning tools and guidance.
Investor risk profile: Each customer or potential customer — admirably, the profile questionnaire is available without logging in or creating an account — is taken through a series of nine questions designed to assess risk tolerance. The questionnaire is one of the most thorough we’ve seen. E*TRADE poses queries from multiple angles to try to figure out how the investor will tolerate various levels of risk and market fluctuations.
Once you've finished the questions, you're able to view a recommended portfolio. E*TRADE doesn't disclose the specific investments used, but the company does share a recommended asset allocation, along with 15-year historical index returns in a best, worst and average case scenario for context. Investors are presented with two options — a recommended portfolio choice and a suitable alternative.
Strong customer service: In addition to the vast library of tools and investor education, E*TRADE Core Portfolios customers can consult with a team of investment advisor representatives 8:30 a.m.-8:30 p.m. Eastern time, Monday-Friday. Its specialists all have Series 7 and 66 designations and some have their CFP designation.
They can provide guidance on building a retirement portfolio, and estimate projected income and financial needs in retirement. They can also provide investment recommendations, deliver portfolio-building strategies, and advise on financial decisions such as retirement, college and tax planning.
For general customer service, live representatives are available to answer questions via phone or chat 24/7.
Portfolio fees and specialty options: E*TRADE uses low-cost exchange-traded funds (ETFs), with expense ratios that range from 0.7% to 0.8%, depending on the portfolio.
Clients have the option of personalizing the equity portion of their portfolios by swapping E*TRADE's standard-issue ETFs with socially responsible ETFs, which will screen out companies that don't align with certain environmental and social values. There is also the option of a smart beta ETF. Smart beta funds take a more active approach to investing, with the goal of outperforming a benchmark rather than just mirroring it.
Where E*TRADE Core Portfolios falls short
Tax strategy: The company doesn’t offer tax-loss harvesting, a service that can significantly reduce capital gains taxes. In taxable accounts, the practice involves selling losing investments to offset the gains from winners. It’s widely available among robo-advisors, often for free, though some advisors impose an additional balance requirement before the service takes effect.
Instead, Core Portfolios automatically enrolls all taxable brokerage accounts in a tax-sensitive strategy using municipal bond ETFs that can help minimize Uncle Sam's bite on the interest and dividends associated with those portfolios.
Website transparency: A portion of our rating for customer support is devoted to how easily our testers are able to uncover key bits of information on the provider's website. With E*TRADE Core Portfolios, we struggled to find details we believe are important for potential customers, including the investments used in portfolios and instructions for closing an account.
Is E*TRADE Core Portfolios right for you?
E*TRADE has created a solid contender in the robo-advisor arena. While the service's management fee is a bit above that at two other robo-advisor heavies — Wealthfront and Betterment each charge 0.25% — the ETFs used by E*TRADE may have lower expense ratios, depending on your portfolio.
Arielle O'Shea and Tiffany Lam-Balfour contributed to this review.
Disclosure: The author held no positions in the aforementioned securities at the time of publication.
on E*TRADE's website