The San Franciscan bank has rolled out a robo advisor, joining other financial firms in the chase for investments from tech-savvy Generation Xers.
Aptly named as Intuitive Investor, the new online account program aims to give new and emerging investors lower-cost options to enter the markets.
The target market is Wells Fargo customers who are familiar with the bank’s online accounting products, but do not yet have an investment account with the bank. Over 22m of the bank’s 72m customers are millennials, but only a very small portion of these customers currently engage with Wells Fargo’s Wealth and Investment Management unit.
The program requires customers to start with a minimum $10,000 investment, managed with a 0.5 per cent advisory fee. The onboarding process is designed to be quick and simple, answering just eight questions to develop a portfolio through the robo advisor.
The bank has said the program will give customers access to low-cost, diversified ETFs portfolios, designed by the Wells Fargo investment team, with automated rebalancing calculated by technology from local tech firm SigFig.
The news represents yet another move by big financial firms into robo advice in recent months, looking to increase investment and add products to the business while cutting costs.
However, the Intuitive Investor program does not appear to have been competitively priced. Earlier this year, Merrill Lynch launched its robo advisory service, Merrill Lynch Edge Guided Investing, which requires only a $5,000 minimum with an annual 0.45 per cent fee.
Despite the competition, Wells Fargo is pressing ahead by targeting its own userbase.
“Technology enables us to address the investing needs of millions of next-generation Wells Fargo customers – many of whom are digitally savvy and seek convenient advice,” said Eddie Queen, head of digital and automated investing at Wells Fargo Advisors.