Capital One Investing Unveils New Robo-Advisor Offering with 7 ETF Models

US-based Capital One Investing, a subsidiary of Capital One Financial Corp., today announced the launch of Advisor Connect, a suite of managed portfolios including a robo-advisor service aimed to provide investors a new set of managed products under its existing self-directed and full-service brokerage and advisory product line.

The company explained in an official statement that the new digital portfolios are unbiased as no financial advisors are compensated and none of its own proprietary funds are traded within the newly launched portfolios.

The new world of Online Trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Read this Term, fintech and marketing – register now for the Finance Magnates Tel Aviv Conference, June 29th 2016.

At Capital One Investing, our goal is to build planning tools that help customers invest with confidence and manage portfolios in ways that work best for them.

Robo-advisor rebalancing

Part of the appeal of robo-advisor offerings, besides the cost structure, is that any subsequent portfolio rebalancing that is required, based on initial target allocations, can be fully automated.

This helps a portfolio take advantage of changes in the market on a systematic basis without the over-trading that may typically happen within an active investment that can lead to higher costs and potentially worse performance - compared with passive-style products that merely try to follow the index and rebalance (including averaging down) when target allocations change.

In addition, Capital One Investing has a dedicated team of people to support investors with the new offering and to help keep the human touch in the equation to guide clients.

Advisor Connect marks a significant milestone on our journey to build a customer-first, conflict-free and transparent investing experience that empowers today's investors to plan for the long term.

7 Models based on ETFs

The cost structure of the new funds is based on an annual advisory fee of 0.9 percent, and investors need a $25,000 account balance to invest in the new managed service which permits one portfolio per account and uses low-cost 3^rd party ETFs which have become a popular choice for robo-advisory offerings to help keep fees minimal.

According to people familiar with the product at the company, there are 7 models within the new portfolios in the Advisor Connect offering, ranging from conservative to aggressive and based on low-cost Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Traded Funds (ETFs).

These offerings combine or chose from nine to twelve ETFs - from iShares or Vanguard or Powershares - and determines overall portfolio weightings based on client's investment objectives and risk appetite.

A certified financial planner within the Advisor Connect division explained to me that based on a 10% level of drift the portfolios are set to automatically rebalance, hence the automatic robo-advisor essence of the offering - although this offering still has a strong human element to it with the team's support.

Human touch still present

"At Capital One Investing, our goal is to build planning tools that help customers invest with confidence and manage portfolios in ways that work best for them. We're providing flexible solutions that fit seamlessly into everyday investors' busy lives," said Yvette Butler, president of Capital One Investing, commenting in a statement regarding the launch.

"Advisor Connect marks a significant milestone on our journey to build a customer-first, conflict-free and transparent investing experience that empowers today's investors to plan for the long term."

Mrs. Butler added: "Many investors want to be involved in day-to-day management of their own finances and digital tools can do a great job keeping them on track and their portfolios balanced. But when life throws you a curve or your goals change, working with an advisor can help you pivot and reassess your game plan. Advisor Connect provides the best of both worlds, access to great online tools along with support from personal financial advisors when you want or need it."