We now know the name and price of Wells Fargo’s forthcoming robo advisor.
Intuitive Investor requires a minimum investment of $10,000 and charges a 50 basis point advisory fee making it more expensive than competing services available on the market. Wells Fargo Advisors is hoping the asset allocation models and ETFs selected using Wells Fargo Investment Institute’s research and portfolio management expertise, access to a call center of human advisors and integration with online banking will all justify the additional expense.
For comparison, a similar product from Bank of America — Merrill Edge Guided Investing — requires a $5,000 minimum and charges 45 bps. Betterment also charges 50 bps for unlimited access to its advisor call center but doesn’t require a minimum investment. Vanguard’s Personal Advisor Services and Charles Schwab’s Intelligent Advisory require a minimum of $50,000 and $25,000 respectively, but Vanguard charges 30 bps while Schwab charges 28 bps with a quarterly maximum of $900.
Intuitive Investor’s fees and account minimums are still below that of a traditional, full-service advisory relationship and fall within a fee range recommended for hybrid robos by the consultant firm Aite Group.
Wells Fargo Advisors revealed in November that it was working on a robo advisor with SigFig, a technology company also based in San Francisco that specializes in building fintech customized for large, established financial institutions. In Monday’s update, Wells Fargo Advisors said SigFig’s algorithms would handle day-to-day portfolio management, including rebalancing and tax-loss harvesting.
The company repeated that it sees Intuitive Investor as a way to reach the next generation of investors with the hope that they will transition to Wells Fargo Advisors’ full-service business as their financial lives grow in complexity. The firm cited proprietary research from early 2016 that 50 percent of Gen Y clients were “extremely likely” to consider a primarily digital service that also offers access to a financial advisor.
Wells Fargo Advisors will launch a staff-only pilot program in the second quarter before inviting selected customers to pilot the program later this summer. The San Francisco-based firm did not specify plans for a public launch.
An earlier version of this article stated that Schwab's Intelligent Advisory did not charge advisory fees. The article was updated to correct the error.
