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MarketRiders bill themselves as the original digital advisor. The company started by helping “do it yourself investors” with a digital platform to monitor and build a portfolio based on sound asset allocation principles.
They have now expanded their service beyond the do-it-yourself investor and are now offering a managed service option where they do the work of managing the full investment portfolio for their clients, including set up and ongoing rebalancing of the portfolio as the asset allocation changes due to market movement.
Before getting into more detail about their services, here is a summary of MarketRiders:
• Assets Under Management: $5 billion
• Minimum Deposit Amount: MarketRiders allows investors to open accounts with as little as $2,500.
• Portfolio and Asset Allocation Details: MarketRiders automatically calculates the right allocations of stocks, bonds, real estate and other asset classes for their investors based on age, time horizon, risk tolerance and investment experience. They use exchange traded funds to build their portfolios.
• Fees: For MarketRiders managed accounts, there is a simple fee structure based on a percentage of the daily average of assets managed. On the first $50,000 the fee is 0.45%. On the next $50,000 the fee drops to 0.35%, and on amounts over $100,000 the fee drops again to 0.25%. There is a minimum management charge of $7 per month
• Account Types Available: MarketRiders allows investors to open individual accounts, joint accounts, trust accounts, traditional IRAs, 401(k)s, and Roth IRAs.
MarketRiders has made their sign-up process simple with a minimum initial investment of $2,500. This amount allows them to build a diversified portfolio immediately and keeps the impact of fees low.
This initial investment requirement is a bit higher than companies like Wealthfront ($500) or Betterment (no initial requirement to set up an account), so investors have a decision to make with regards to what level of service they want. If they have the $2,500 available to invest then MarketRiders is worth considering. However, if they do not then a service like Wealthfront or Betterment may be a better option.
Depending on the answers to the above questions, a portfolio is created that will include the right mix of assets, and may include bonds, cash, commodities, global and domestic stocks, and real estate. Once the portfolio is established, MarketRiders monitors the portfolio and makes the required rebalancing decisions required to keep the risk and reward profile where it should be.
MarketRiders uses exchange traded funds to build globally diversified portfolios. Depending on the client’s investment time horizon, age, risk profile, and goals an efficient and professional level portfolio is created. To get to the right portfolio, MarketRiders takes the user through a process that looks like the following:
MarketRiders’ managed service fees work on a tiered system. The more money invested with the robo advisor, the less the fees are for each tier. Here are how these fees work:
In addition to these fees, there is a $7 per month minimum charge; if your account is not big enough, MarketRiders will still charge a minimum of $7. This fee helps the cover the costs of running the service.
If clients are not interested in the managed service option, the fees to use the MarketRiders platform for do-it-yourself investors is shown in the table below. They also offer a 30-day free trial.
As a robo advisor serving the United States market, MarketRiders offers the usual account types for their clients. These account types include:
• Individual Investment Accounts
• Joint Investment Accounts
• Trust Accounts
• Traditional IRAs
• Roth IRA
The fees are the same regardless of the account type the client chooses. In addition, clients can have multiple accounts with MarketRiders.
MarketRiders has one of the easiest sign-up processes amongst the robo advisor providers in the United States. By using their online tool to answer some key questions like age, starting capital, investment time horizon, risk comfort levels, as well as the portfolio dollar goal, a well balanced and risk adjusted portfolio is created.
Once that portfolio is created, and the account funded, MarketRiders goes to work doing all the buys and sells as well as adjusting the portfolio periodically to make sure the asset allocation is correct.
Overall, MarketRiders employs a sophisticated asset allocation strategy with a globally diversified portfolio, keeping investment costs low and rebalancing the portfolios as markets go up and down. Since they don't pick individual stocks and they don't try to time the market, they build solid portfolios that have a good chance of meeting the investment goals based on a well researched investment approach.