FOLIOfn Looks at ‘Passive’ Robo-Advisory as Addition to Active Portfolios

A provider of low cost solutions for proactive long-term investors, FOLIOfn appears to be close to adding passive robo-advisory.

“We’ll probably make a decision in the next month or two. The more I talk about it, the more convinced I am that it is something we should do.” Those were the words of Steve Wallman, CEO of FOLIOfn, answering Reuters‘ questions about his firm entering the robo-advisory market.

The entrance of another broker that provides long-term investment solutions to the robo-advisory marketplace isn’t much of a surprise. With the product’s simplicity and low costs, it has emerged as more than just an offering from a small array of fintech startups, and now accounts for billions of dollars of assets under management (AUM) using such automated systems. So far in 2015, Charles Schwab launched a robo-advisory offering, while Vanguard, which has had a similar automated investing product named Personal Advisor Services, became available to its entire customer base and lowered minimums.

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The launch of robo-advisory services from FOLIOfn though, would mark an interesting evolvement of their business model. As per its ‘FOLIO’ name, the broker provides customers the ability to build portfolios or stocks and ETFs at a monthly fee instead of charges on individual orders. For customers, the advantage of this model is the ability to diversify with small individual position sizes, without absorbing commissions on those trades. By offering robo-advisory services, the passive investing product will mark a change from their current portfolio building solutions that is made to appeal to proactive investors seeking low costs.

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