Jemstep Portfolio Manager Interview

I had a few lingering questions after going through my Jemstep Review site in detail for my Jemstep Portfolio Manager review. Overall, Jemstep is a great product. I’ve also enjoyed the interaction with their support staff and management team. At any rate, I am posting the email conversation with the people over at Jemstep  here in full. I think it gives a good taste of their vision, expertise, and general desire to help investors.

1. “I’d like to understand the genesis of Jemstep.”

The vision for Jemstep is to enable “everyday” investors to make the best investment decisions for themselves and their families—to achieve all their financial goals, regardless of their level of sophistication or the size of their portfolios.Jemstep started with the creation of a patented investment evaluation engine that advises people on specific funds that are right for them within a specific asset class combined with the ability to see all your accounts in one place.  With the launch of Jemstep Portfolio Manager, we now offer a complete portfolio management solution for retirement.

Jemstep’s patented technology assesses your current investment strategy and designs an optimal asset allocation plan for your situation, including your current income, years to retirement, savings rate, and more. Our investment evaluation engine then analyzes over 20,000 mutual funds and ETFs to identify what to sell and what to buy to guide the investor to the best investment options for building their  ideal portfolio. The Jemstep advice engine evaluates cost basis, asset location, fees and fund quality and fit to develop its specific recommendation.

2. “What is the nature of your partnership with Windham Capital Management? Does that mean that you believe there’s a point at which it is best to use an advisor over Jemstep’s software or perhaps it is more of Windham seeing the power of technology to expand to an under-served market?”

Jemstep reached out to Windham Capital Management which is an institutional level portfolio manager and advisory firm with the goal to bring institutional quality portfolio advice to the everyday investors. Working with our investment team Windham worked to design a set of portfolios suited to individual investors to provide reasonable upside but also protection during down markets. Jemstep used asset classes that are familiar to individuals and easily accessible through mutual funds and etfs.Windham’s participation is not a commentary on a natural progression from Jemstep to Windham, but rather driven by a desire to bring top quality investment advice to individuals through the Jemstep service.

3. “Does the software factor in trading costs and broker commissions when making recommendations? In other words, if an ETF that models the S&P 500 is recommended, will it also recommend purchasing it from Vanguard or another Broker?”

The model uses benchmark indexes but will recommend a number of funds that can be purchased from Vanguard or other brokers. We do not just recommend only one fund or ETF per asset class, but rather evaluate all funds that appropriately correlate to the index. We consider transaction costs but we do not have all the variations of fees for all brokers so we use a general factor in this. We do consider cost basis and gains in taxable accounts and attempt to minimize capital gains by selling in tax-advantaged accounts.


MattJemstep Portfolio Manager Interview