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December 01, 2016 at 10:27 AM
Advisors wanting to know which robo-advisors are their toughest competition may want to consider Condor Capital Management’s research on the subject. The New Jersey-based RIA just launched the first in a series of quarterly reports on the portfolio performance of various robo-advisors’ taxable and nontaxable accounts after fees. Also included are data about fees and account minimums.
The data so far is limited, covering at most the first three quarters of this year, but it can give advisors some insight into the various robo offerings.
Condor Capital, which has over $846 million in assets under management according to its latest Form ADV, employed a rather unique approach to its research, investing its own funds in various robo-advisors using a 60/40 equity/bond split for taxable accounts and as close as possible to 100% allocation to stocks for tax-free IRA accounts.
“Robos are a black box,” explains Ken Schapiro, founder and president of Condor Capital Management. “The only way to do this is from back end.”
According to its report, Condor Capital used a “similar baseline allocation across the portfolios,” which allowed it to measure performance and maintain as much as possible an equal allocation among funds.
Altogether Condor invested in 12 different robo-advisors and 13 different portfolios for taxable accounts (TradeKing had two portfolios: a core and a momentum portfolio), but only nine portfolios for the full three quarters (Two E-Trade portfolios and FutureAdvisor weren’t added until the third quarter; Fidelity Go was mentioned but not included in the data).
It also tracked performance of six robo-advisors for IRA accounts but none for the first quarter. At most it had data for just three robos for the second and third quarters.
By the end of September, Condor Capital had $210,000 invested in taxable accounts and $45,000 in IRA accounts with robo-advisors.
