E-Trade recently rolled out a new service callAdaptive Portfolio, which is aimed at young professionals and designed to compete with fintech startups such as Wealthfront and Betterment. Users input their investment goals, timeline, and risk tolerance, and the platform will use this data to allocate investments and automatically re-balance the portfolio over time. Users will also have the option to connect with financial consultants.
In its latest offering, the optional active management will map on top of personalized risk tolerance models and give investors automated exposure to both mutual funds and ETFs from well-recognized financial services firms like State Street and Vanguard. With Adaptive Portfolio, every client will be assigned one of 12 possible portfolios that match up with six investment profiles. Drift rebalancing will be automated for each investor to account for changes in asset volatility. Each model portfolio will be reviewed by a dedicated investment committee.