By Daniel Lanyon on Wednesday 28 February 2018
The platform has unveiled a series of measures that can reduce portfolio costs to zero.
Lower fees are the original argument for disruption to ‘traditional’ wealth management and the rise of the so-called robo advisers.
Digital portfolios existing on smartphones only clearly have the opportunity to beat competitors with fancy offices, brass plaques outside the door and substantial headcounts of staff.
To be fair nearly all robo-advisers (digital wealth managers) have total fees significantly less than the average wealth manager or adviser but some have prioritised lower fees more than others.
The firm has now unveiled a raft of ways investors can further reduce fees, in some cases to zero.
Each month it’s running a campaign allowing investors to earn free investment management fees. For example, in December if you created a new portfolio and funded it you received one month of free fees. In January if you doubled your assets they gave away another month fee-free.
In February, providing a case study meant you received yet another month of free fees. In March, the firm is giving away a free month if you become a beta user and experience its latest feature releases.
The really clever tactic comes straight out of the Uber playbook. If you invite 3 friends and they fund their portfolios you get 3 more months taken off fees. ETFmatic says it has more campaigns coming throughout the year.
Last year ETFmatic said its annual management fee would reduce from 0.5 per cent to 0.48 per cent for portfolios £25,000. For portfolios above £25,000 they are reducing fees from 0.30 per cent to 0.29 per cent. Given a 12 basis points average Total Expense Ratio across portfolios, this adds up to a total cost of less than 0.60/0.45 per cent.