There are a few different types of online personal finance investment software emerging. Some track your portfolio, others allow you to mirror an advisor, and others help you create your own portfolio of index ETFs. Here is a quick primer on each of the major online investment management software companies and what they offer.
PersonalCapital.com
Services: Track spending and aggregates investment accounts for free. Asset management services for high end users.
Fees: Free core services. Tiered fee structure that does not exceed 1% for personalized financial management service.
MarketRiders
Services: Recommends a risk adjusted ETF portfolio. Notifies you when you need to rebalance your portfolio. No brokerage service.
Fees: Flat annual fee of $149 or monthly fee. This is the low cost leader.
Wealthfront
Services: Recommends a risk adjusted ETF portfolio. Sets up a brokerage account on your behalf for the purchasing of the stocks and for portfolio rebalancing.
Fees: 0.25% Management fee. Free for investors with less than $25,000.
Wikinvest
Services: Account aggregation for up-to-the-minute portfolio position. Research and analysis through crowdsourcing.
Fees: Free
Covestor
Services: Select a money manager based on your risk profile. covestor sets up a brokerage account and executes trades to mirror the chosen manager.
Fees: 0.5% to 2.5% depending on the fund and manager. No load or hidden fees.
MarketRiders, Wealthfront, and PersonalCapital want to replace the traditional financial advisor by helping you to create your own portfolio. Covestor wants you to choose an advisor and will then help you match their investments. Wikinvest simply wants to help you follow the wisdom of crowds and to see your realtime portfolio.
Each service has its benefits. The questions is what do you need? Online financial management is here and it is lower costs and changing the role of the financial advisor. Fees are dropping and services are rising. How will it change your investing?