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March 16, 2017 at 11:47 AM
Mutual fund company T. Rowe Price just launched its own digital advisory platform, but unlike other robos it will include only actively managed funds.
T. Rowe Price ActivePlus Portfolios is a discretionary investment management program available initially for only IRA investors, with a minimum $50,000 in investable assets. After answering a “short questionnaire to assess risk tolerance, time horizon and investment goals,” they will receive a model portfolio recommendation consisting of eight to 13 T. Rowe Price actively managed funds chosen from a roster of 14. They include the firm’s Mid-Cap Growth Fund and High Yield Fund, which are both currently closed to new investors but are accessible through ActivePlus Portfolios.
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Investors will pay only the expense ratio of the underlying funds in the portfolio, for a weighted average of between 61 and 82 basis points – no advisory fee, according to Scott David, head of individual and retirement plan services.
In addition to asset allocation, the service will provide rebalancing as needed and annual checkups of portfolios. Investors will have phone access to “licensed client managers” (registered reps) who are dedicated to the new robo offering.
This is the firm’s “first step” in offering discretionary managed accounts, said David. “We’re acting as the advisor … we do all the fund selection and rebalancing … and there’s no advisory fee.”
