On top of competition coming from start-up robo-advisors, companies like Wealthfront and Betterment face growing competition from financial giants such as Vanguard and Charles Schwab.
Since 2013, Vanguard has been offering its version of robo services to clients with $100,000 or more. For an annual fee of 0.3 percent of assets under management, plus fund fees that average 0.2 percent, clients get a financial plan, portfolio management and an online relationship with a CFP. The money is invested in Vanguard funds and/or exchange-traded funds.
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Charles Schwab launched its robo platform for retail clients in early March; a version for registered investment advisors should debut soon.
Both Wealthfront and Betterment invest client money in ETFs, too.
Nash, of Wealthfront, pointed out that it took his company two and a half years to reach $1 billion in assets, while it took Schwab six years.