AssetBuilder is a digital investment platform that allows you to select from a group of eight portfolio types depending on your financial goals and risk-tolerance. The portfolios, designed by Dimensional Fund Advisors (DFAs), focus on low-cost exchange-traded funds (ETFs) and index funds. The robo-advisor requires at least $50,000 to begin investing. However, this may be waived when the client and the advisor anticipate the client will add additional funds to the accounts bringing the total to $50,000 within a reasonable time. Other exceptions will apply to employees of AssetBuilder and their relatives, or relatives of existing clients. Clients are charged management fees of 0.20% to 0.50% depending on their balance, along with trading fees. Charles Schwab & Co., Inc. is the required account custodian for all AssetBuilder clients.
Investors who value versatility and a variety of portfolio options; Those who have more than $50,000 to invest; Investors who want their portfolios designed by Dimensional Fund Advisors (DFAs)
The high $50,000 minimum balance will prevent many investors from being able to use this robo-advisor.
Pricing: How Much Does AssetBuilder Cost?
|Option Name||Management Fee||Minimum Balance||Features|
|AssetBuilder Management||0.20% - 0.50%, depending on account balance + Schwab trading fee||$50,000||Eight different portfolios to choose from, invests in low-cost ETFs|
To use AssetBuilder’s robo-advisor services, you’ll have to pay an annual management fee. This fee is a percentage of your assets, and the more assets you have, the smaller the percentage you pay. This is the only fee you pay to AssetBuilder, since it does not charge commission or set-up fees.
|Annual Fee||Starting At||Up To|
It is important to note that AssetBuilder operates on a “fee only” basis. This means that you and you alone pay AssetBuilder to create and manage your investments. That avoids any possibilities of conflict of interest between AssetBuilder and any other companies who might incentivize them to make decisions about their investments.
You will run into trading fees associated with Schwab, though. These trade fees run at $11.95 per trade. These costs will run higher in your first year of trading but can dip as time goes on.
AssetBuilder's Investing Strategy
When you open an account with AssetBuilder, you are given the choice of eight different portfolios. These are Portfolios 5, 6, 7, 8, 9, 10, 12 and 14. AssetBuilder created these set portfolios based on the historical performance of stocks, bonds and cash and of market index fund measures. This is because AssetBuilder does not believe in “beating the market.” Instead, it focuses on getting the best possible investments for each client, all with lower costs.
Having these set portfolios allows AssetBuilder to offer investors a look at their potential earnings. It also helps investors determine their individual goals and risk tolerance. For example, Portfolio 8 is for investors who are tolerant with risk and are looking to invest for the medium- or long-term. On the other hand, Portfolio 9 focuses more on long-term growth with tolerance for market volatility and risk.
No matter which investment portfolio you choose, AssetBuilder will provide you with a low-cost portfolio that has historically performed well. Plus, your portfolio will take your own goals and risk tolerance into account. You’ll end up with a diversified portfolio with low-cost index funds. AssetBuilder will then manage the portfolio according to its “buy and hold” strategy.
AssetBuilder advisors are DFAs, and the company’s investment philosophy is rooted in the Fama/French school. That means it stresses both “naïve” asset allocation, which focuses on a common sense diversification of a portfolio instead of mathematical modeling, and smart indexing. Choosing this route means AssetBuilder can create more stable portfolios through simple and smart indexing and asset allocation. Simple diversification is done by expanding the number of asset classes in your portfolio through a four-step process. AssetBuilder will take advantage of small cap and value-priced equities to snag higher returns at lower costs.
- Individual brokerage account
- Joint brokerage account
- Roth IRAs
- Corporate account
- Custodial account
- 529 college savings plan
- 401(k) rollover
- 403(b) account
What sets AssetBuilder apart from other robo-advisors is its eight model portfolios. Each one aligns with a different investment approach, based on investing length of time and risk tolerance. That way, you’re able to see what kind of portfolio AssetBuilder can create for you before you even start. All AssetBuilder portfolios are filled with DFA funds to create a simple, smart and diversified portfolio for all clients.
AssetBuilder even provides nine “lazy portfolios,” or “Couch Potato Portfolios” for investors who want to take a more DIY approach. Rather than having AssetBuilder build and manage your portfolio, you can simply use their pre-fab lazy portfolio examples to help build your own. You’ll just have to make sure you don’t let your emotions get the best of you when managing your investments.
AssetBuilder does stress that it seeks to be an advocate rather than a mere algorithm. This puts a more personal touch on managing your money. Plus, AssetBuilder operates on a fee-only basis, which ensures you’re the only one paying AssetBuilder for its services. That way, the platform will work for only you when it comes to your portfolio.
Because AssetBuilder has DFAs, it can construct portfolios that are less vulnerable to the whims of the market. By integrating your individual goals and risk tolerance, AssetBuilder creates its model portfolios to correspond to various investment types without ever trying to beat the market.
Lastly, you can access your AssetBuilder accounts through Schwab Institutional at www.schwaballiance.com. There you can see the full performance of your portfolios. AssetBuilder will also send monthly emails to give you a summary of your accounts along with monthly statements from Schwab, too.
Who AssetBuilder Is For
AssetBuilder is for clients who want the most out of their managed investments but at a lower cost. AssetBuilder can provide that for a variety of investors, through its eight model portfolios filled with DFA funds. With DFA funds, AssetBuilder can make portfolios that perform well throughout the ups and downs of the market. It also allows for lower costs when trading.
AssetBuilder does carry a high minimum balance requirement, limiting its services to those who can invest at least $50,000. You should also be sure that you can afford the fees that come with AssetBuilder before you decide that its services are right for you.
- Eight portfolio models to choose from
- Automatic periodic rebalancing
- Online educational resources
- Tax-loss harvesting
- Human advisors
How AssetBuilder Works
To open an account with AssetBuilder, you can easily start by clicking an “Open an Account” button on any page of the website. The first step will be to provide personal information like your date of birth, email address, home address and employment information. You can then choose which kind of account you would like to open. You may choose from Traditional IRA, Roth IRA, SEP IRA, Individual, Trust, Joint or Other.
You also have to decide which portfolio you would like to open. You don’t have to choose blindly, though, since AssetBuilder provides a tool on its “Portfolios” page. By entering your initial and recurring deposits, length of savings time and your risk tolerance (conservative, moderate, aggressive), you’ll be shown the most ideal portfolio choice for you.
You can also explore the portfolio options further on the website. That way, you can make a more educated decision about which portfolio you want to choose during the application process. If you’re still unsure, you can call an AssetBuilder representative at 972-535-4040 or send the company an email. This allows you to talk over your options with an advisor before committing to one.
What's the Catch?
To start, AssetBuilder requires a minimum deposit of at least $50,000. So if you don’t have that amount at your disposal, you can’t get AssetBuilder. It’s important that you don’t give up all your money to start investing, since crucial costs like rent and food take priority. You will also have to make sure you can afford the fees that come with AssetBuilder, especially the annual fee. With a balance of at least $50,000, you are subject to the highest fee tier. The only way to snag a lower rate is to increase your balance by hundreds of thousands of dollars. But if you don’t fall into this bracket, there are a number of robo-advisors who do offer lower minimums and fees.
Competition: How AssetBuilder Stacks Up?
If AssetBuilder isn’t quite what you’re looking for, you may want to look into Vanguard Personal Advisor Services. Vanguard also requires at least $50,000 to open an account but charges a smaller annual fee for its services at 0.30% of your assets. This means that they’ll take a smaller chunk out of your initial balance than AssetBuilder would. However, AssetBuilder does offer an advantage to investors with larger assets by charging a lower percentage.
Vanguard will create your portfolio with low-cost funds that are also geared to take out less of a tax bite. Unlike AssetBuilder and many other robo-advisors, however, Vanguard offers access to human advisors to help you manage and understand your investments.
If you don’t quite have an extra $50,000 to invest, there are other robo-advisor options out there for you, like SigFig. SigFig requires at least $2,000 to start investing, plus there is no fee for that balance amount. If you have $10,000 or more to invest, however, you’ll see a 0.25% fee, which still runs small compared to AssetBuilder and Vanguard management fees. When it comes to investing, SigFig promises a well-diversified portfolio, favoring ETFs. Plus, you’ll always have access to live chat and phone support and an investment advisor with SigFig.
Bottom Line: Should You Use AssetBuilder?
AssetBuilder certainly stands out for its set Model Portfolios available to its clients. This is in lieu of the ultra-tailored portfolios most other robo-advisors offer. This can prove to be a benefit or a limitation, though, depending on your individual investment needs. You’ll want to explore each portfolio option before you open an account and start paying the fees. That way, you can ensure you’re investing the way you want.