Options grow for DIY investors looking
for a little help
ROB CARRICK
The Globe and Mail
Published Friday, Jun. 27 2014
ShareOwner's ETF Model Portfolio Service has particular appeal for the rookie
investor who wants the benefit of using low-cost ETFs, but doesn't know how to
get started.
Between do-it-yourself investing and having an adviser is a small but growing niche
of the brokerage world aimed at people willing to pay a middling level of fees for
help with their portfolios.
The latest entrant is ShareOwner, a small online brokerage that focuses on investors
who want to build quality longterm portfolios. The firm's new ETF Model Portfolio
Service1 offers five different portfolios of low-cost exchange-traded
funds. Invest any sum of money in one of these portfolios and ShareOwner will divide
it proportionately into the various component funds for you and rebalance the mix on
a monthly basis. The cost is 0.5 per cent of your balance on an annual basis for
accounts with less than $100,000 and a flat $40 per month for larger accounts. These
fees layer on top of those for the ETFs in the various portfolios. ShareOwner
projects an all-in cost of about 0.79 per cent for its ETF portfolios.
ShareOwner provides no advice - you're on your own in choosing between portfolios
that are categorized as aggressive growth, growth, balanced, conservative and
income. What you get for the 0.5-per-cent fee is the convenience of handing money to
ShareOwner on onetime, periodic or regular basis and having them handle everything
for you. They buy the ETFs for you according to the blueprint in your chosen
portfolio, and they do the buying and selling necessary to keep you in line with the
asset mix you've chosen. This is far from rocket science, but it is time-consuming
and, for newbies, a little intimidating.
In fact, the ETF Model Portfolio Service has particular appeal for the rookie
investor who wants the benefit of using low-cost ETFs, but doesn't know how to get
started. A $15,000 account would be billed $6.25 on a monthly basis, which seems
liveable. Later on, after an investor builds some expertise, he or she could move
the account to one of the bigger online brokerage firms and save the 0.5 per cent
fee.
ShareOwner's new ETF program is somewhat similar to the adviceDirect service run by
BMO InvestorLine, where the fee starts at 1 per cent and investors are given help in
choosing their own securities and monitoring them. Experienced DIY investors will
scoff at the cost of this service and the cheaper ShareOwner ETF portfolios, but
they're not the target market.
References
1. https://www.shareowner.com/investments.html
This article was originally published here
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