The invasion of financially savvy robots that help investors build portfolios online with a few mouse clicks continues on Wall Street with a new offering from TIAA that enables investors with a socially conscious streak to own stocks that match their values.
TIAA, which started offering socially responsible investing options to clients in 1990, is the latest entrant into the robo-advisory business, which lets investors create a professionally managed personal account online in minutes without the need for human intervention.
But the new service, dubbed TIAA Personal Portfolio, offers the human touch if investors want it.
Investors also have the choice of three investment options. They can invest in so-called “passive” funds, such as exchanged-traded funds (ETFs) that track market benchmarks like the Standard & Poor’s 500 stock index, as well as funds run by portfolio managers whose goal is to post bigger returns than the market and “impact” funds that invest in companies with good grades when it comes to the environment, social causes and corporate governance.
It also lets investors build portfolios with five different risk levels — ranging from conservative to aggressive.
“It is a great option for customers who prefer to receive advice from us digitally,” says Kathie Andrade, CEO of TIAA’s Retail Financial Services business.
She describes the service as a “digital coach for your wallet” but with the human touch available if you prefer the support of a real person and professional financial adviser.
“If you want to do it all online you can,” says Andrade. “But if you want you can speak with someone and get a little help.”
The new service, she says, was created with the younger generation in mind. Many of the features — such as it being a digital service and one that is upfront when it comes to costs and investment choices — are “Millennial-friendly,” says Andrade.
TIAA Personal Portfolio lets users see the exact funds that are recommended and the underlying fees before financing their account. The minimum investment is $5,000 and there’s a management fee of 0.30%. There’s also a fee charged by the underlying funds themselves; on average, the total fee for a socially responsible portfolio is between 0.25% and 0.28%, says TIAA.
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