Cambria Investment Management says it has teamed with Betterment Institutional and launched Cambria Digital Advisor, which includes active ETFs but charges no management, commission or rebalancing fees.
The automated service relies on the RIA’s “Trinity Portfolio” approach — global diversification, value and momentum — and will charge a technology platform fee of 0.15%, along with any underlying ETF cost, for both its Cambria-branded active ETFs and those made by passive ETF providers. (Accounts can be opened with $100,000 of assets and up.)
With its direct-to-investor service, “We have had strong initial, first-day audience sign ups,” said Cambria Chief Investment Officer Meb Faber, in an interview with ThinkAdvisor. “Most robo-advisors offer allocation models that are all nearly the same vs. our offerings, which are very different.”
Faber says demand from advisors is proving “strong, too,” which should lead to more automated-investing rollouts from Cambria, which has some $330 million of client assets.
“Advisors have been asking us about the portfolio allocations. We are talking about this with other advisors and looking at options on different technology platforms,” he said. “We are exploring what to offer direct to advisors.”
The exploration could lead to another robo-related announcement perhaps as early as a few weeks or months from now, Faber says. (He also expects the minimum account size to come down over time.)
Cambria wanted to move into the robo space earlier. But “it presented a logistical challenge, and the technology hadn’t been up to par until recently,” the CIO explained.
“We wanted to have an individual account offering, and the past one to two years have seen a dramatic evolution in options for five-minute account openings,” Faber stated. “Some custodians are still slow and do not let advisors do that, which is shocking.”
Advisors — and by extension the broker-dealers that support them — should see robo-services as a friend, not a foe, according to the popular investment analyst.
“There’s some trepidation and fear of robo offerings,” he said. “We say they should embrace it as they’ve done with other technology, like email or websites.”
Such a move frees the advisor to spend time on tax planning, estate issues and behavioral finance issues and not on asset allocation, Faber adds.
Before investors’ assets move into one of Cambria’s six automated portfolios, the investors speak with Cambria to review the details and go over any concerns.
“We want to offer a good [robo-]experience,” Faber said. “Lots of robo-advisors ignore this step. We want people on the same page with us.”
— Check out Meb Faber: Should Investors Buy, Hold or Hedge? on ThinkAdvisor.