Top Rated For

• Best for Mobile
  

Our Take

E*TRADE is well known as a pioneering online brokerage with a wide variety of trading tools and features. E*TRADE was purchased by Morgan Stanley in 2020, with promises that the acquisition would deliver more features over time. While E*TRADE customers mostly trade in retail accounts, the broker also offers investors robo-advisory services through its Core Portfolios. Morgan Stanley retired its own robo-advisory, Access Investing, in 2022 and has kept its integration promises. Core Portfolios is the combined entity's only robo-advisory and additions and upgrades are happening behind the scenes. The most notable change in 2024 is the addition of tax-loss harvesting, but there have also been more subtle upgrades to the customization of portfolios, the asset depth, and more. We’ll dig deeper into E*TRADE’s Core Portfolios platform to help you decide if it's the right fit for your investment needs.

Account Overview

Account Minimum	$500
Fees	0.3% annually
Goal Setting	None
Available Assets	ETFs
Interest Paid on Cash Balances	0.01% (all balances under $500,000)
Customizable Portfolio	Yes, investors can incorporate SRI/ESG investing and Smart Beta ETFs into their portfolio
View Portfolio Before Funding	Yes
Customer Service	24/7
Cash Management	Portfolios hold 1% in cash. E*TRADE utilizes a cash sweep to a money market fund until cash balances are used as part of a rebalancing. Cash in the money market fund can also be used to fund a separate bill pay or checking account at E*TRADE. Transfers between accounts are straightforward.
Tax-Loss Harvesting	Yes
External Account Sync/Consolidation	No
Mobile App	Android, iOS

Account Setup

Setting up a Core Portfolios account at E*TRADE is quick and easy. Anyone can use the E*TRADE website to take the risk tolerance profile questionnaire, regardless of whether they have an existing account at E*TRADE. They can indicate initial and any recurring deposits and see a recommended portfolio. You can go through the process multiple times if you want to see changes in recommended portfolios based on different responses. Account specialists are also available to assist investors and potential customers with establishing a Core Portfolios account. E*TRADE asks if you are a new or returning customer after you've gone through the process of getting a recommended portfolio. Existing customers go directly to the account opening process after logging in. New customers will have to set up an E*TRADE account. The account opening process at E*TRADE is similarly straightforward and is completed quickly and easily.

In terms of account types, you have all the usual suspects including individual, joint, and custodial taxable accounts in addition to traditional individual retirement accounts (IRA), Roth IRAs, rollover IRAs, and SEP IRAs.

An E*TRADE Core Portfolios account requires a $500 initial investment, which is higher than some robo-advisors with no account minimums.

Goal Planning

Goal planning in E*TRADE’s Core Portfolios is limited, unlike robo-advisories that have more detailed questionnaires regarding your goals, needs for withdrawals, and time horizons. E*TRADE chose a less complicated approach for its managed account offering. It only has a handful of drop-down questions, and there's no ability to customize it for the individual investor. You can't enter two separate future goals, such as a car purchase and money for your children’s college fund. Goal planning differentiates E*TRADE’s robo-advising platform, but not necessarily in a good way. Its planning tool gives a cursory nod toward goals with a single introductory question that asks whether you’re saving for a specific goal, such as retirement or buying a home. The bulk of the questions are different versions of the same question designed to determine your tolerance for risk and investment time horizon.

Account Services

Core Portfolios allows clients to set up automated recurring deposits that are easy to increase, decrease, or otherwise manage. Investors aren't able to include any of their individual holdings or purchase assets for inclusion in Core Portfolios accounts. Transfers into and out of accounts are simple. Cash can be withdrawn or transferred to other E*TRADE accounts with ease.

Cash Management

Core Portfolios holds 1% in cash, and these portfolios will be rebalanced whenever your investment mix drifts 5% or more from your target allocation. Cash is swept into a money market account yielding a low rate of just 0.01% until it's transferred out to another E*TRADE account, such as a checking or bill payment account.

Portfolio Construction

Portfolio construction for E*TRADE Core Portfolios accounts is fairly straightforward:

• Portfolios are highly diversified across domestic and international equity and fixed-income ETFs.
• Income portfolios offer higher dividend yields and a lower overall risk profile. 
• Tax-optimized portfolios are designed for investors in higher tax brackets.

A very quick questionnaire about your initial investment and recurring deposit amounts, your time horizon, and your risk tolerance leads to a suggested portfolio that best fits your questionnaire responses. You can also override the suggested portfolio and choose a different portfolio. 

Core Portfolios follows an investment strategy based on the principles of modern portfolio theory. Other than the money market fund for the cash portion of the account, funds are invested solely in ETFs to minimize fees. E*TRADE Core Portfolios does not offer any other types of assets like cryptocurrency. The robo-advisor will allocate your portfolio to a mix of stock and bond ETFs according to your risk profile. You can also choose ETFs that emphasize socially responsible investing or smart beta ETFs that are more actively managed in an effort to increase portfolio gains relative to other ETFs.

Core Portfolios previously had three rough allocations for risk: Low-risk portfolios with 20% bonds and cash equivalents and 80% stocks, and high-risk with 80% stocks and 20% bonds. These have been expanded to include an all risk portfolio which is 100% equities. Outside of the Core Portfolios, the SRI and smart beta portfolios have been expanded from a limited set of large U.S. and foreign equities to nearly all equities and bonds that meet liquidity thresholds.

Available Assets

Individual Stocks	No
Mutual Funds	No
Fixed Income	Yes
REITs	No
Socially Responsible or ESG Options	Yes
ETFs	Yes
Non-Proprietary ETFs	Yes
Private Equity	No
Crypto, Forex	No

Portfolio Customization

The ability to customize E*TRADE's Core Portfolios accounts has improved with the higher risk tolerance choices, but beyond that the customization is limited to a choice of having part of your portfolio invested in socially responsible (SRI/ESG) stocks or smart beta ETFs. This is where the ETF is more actively managed in an effort to increase portfolio gains relative to other ETFs. The assets pool underlying both these portfolios has increased, but the ability to really tweak them beyond the model isn't really there yet. These are nice features available to Core Portfolios investors, but it's a ways from the level of customization available at some of the competition.

Portfolio Management

Core Portfolios are invested in ETFs according to allocation percentages guided by your questionnaire responses and modern portfolio theory. The accounts are rebalanced semi-annually, as well as when they drift out of line with the portfolio allocations by at least 5%.

Accounts can be monitored online, and investors are kept informed about key market events and trends that might impact their portfolios. E*TRADE will also send a regular online statement with holdings information, trades made, and dividends received.

To help reduce taxes, Core Portfolios customers enrolling in a taxable account are automatically invested in tax-sensitive portfolios that contain investments in municipal bond ETFs. E*TRADE Core Portfolios has also enabled tax-loss harvesting, which looks for opportunities to realize losses and swap in a comparable asset while offsetting gains elsewhere in the portfolio.

Investors can see the entirety of their various accounts when they're online, but E*TRADE’s brokerage has tools to show overall asset allocations by asset class and at the individual portfolio level. This allows an investor to make changes in their various accounts to ensure proper diversification across multiple accounts. Core Portfolios doesn't do this analysis or choose securities based on the overall financial picture of the investor.

Key Portfolio Management Features
Automatic Rebalancing	Monitored daily, rebalanced whenever the account drifts out of line with the portfolio allocations by at least 5%
Reporting Features	Online monitoring and statements
Tax-Loss Harvesting	Yes
External Account Sync/Consolidation	None

User Experience

Desktop

The desktop experience with Core Portfolios is intuitive. The page isn't cluttered, the concepts are presented succinctly, and it's easy to navigate through the questionnaire process and open an account. The "frequently asked questions" area links on the primary menu for those who are new to investing are very helpful and provide access to useful education. That said, the basics of how these accounts work could be better outlined on the primary Core Portfolios web page. But all the information is all there and the desktop interface is easy to use.

Mobile App 

In addition to best in class usability, the Core Portfolios mobile app offers the same experience as the desktop version, making it our top pick for mobile users once again in 2024. The mobile app offering is very easy to use, and accounts can be opened from the mobile app. Money transfers into or out of Core Portfolios accounts are easy to do on the mobile app, so transferring money to an E*TRADE account that supports checking or bill payment is very simple.

Customer Service

Phone support for E*TRADE Core Portfolios is available 24/7 as part of the overall Morgan Stanley integration. Prospective customers have the ability to speak with a team member and pose questions prior to deciding on their own whether Core Portfolios is right for them. There is a good deal of information about Core Portfolios accounts on the E*TRADE website, and the "frequently asked questions" section answers the majority of questions people might have about robo-advisory accounts. Information is presented in an easy-to-read way where key topics are in bold with sections that can be expanded to see additional detail. There's also a network of physical branches for clients to visit.

Security

Two-factor authentication is available on E*TRADE’s platform.

E*TRADE also provides additional investor protection beyond coverage through Securities Investor Protection Corporation (SIPC) through the Morgan Stanley excess of the SIPC supplemental insurance policy.

Education 

E*TRADE offers a tremendous amount of educational information, and it's available to anyone on its website rather than being limited to just account holders. The Core Portfolios main page has an overview of the process and the Core Portfolios FAQ section is comprehensive and easy to navigate. The FAQ section provides overviews of what Core Portfolios are, why they use ETFs, what portfolio balancing is, and the costs involved. It also contains a section outlining the program’s investing approach and criteria for investments in the portfolio. Beyond the FAQ content, there's also a “Knowledge” top menu selection that provides overviews of diversification and risk tolerance. The initial “Knowledge” page also has a link to the E*TRADE educational library, which provides a tremendous amount of educational information on investing.

Commissions and Fees

E*TRADE’s Core Portfolios accounts require at least $500 to open and have a flat fee structure of 0.3% or 30 basis points, so a $10,000 account would have an annual fee of just $30. This annual fee is assessed monthly and is based on the previous month's end balance.

Core Portfolios customers will also pay ETF expense ratios, which range from 0.05% for the Core offering to 0.14% for smart beta and 0.16% for SRI. E*TRADE’s 0.3% annual fee is higher than some of its competitors in the robo-investing space, including some competitors that don’t charge advisory fees at all, such as such Schwab Intelligent Portfolios from Charles Schwab.

Category	Fee
Management fees for $5,000 account	0.3%; $15 per year or $1.25 per month
Management fees for $25,000 account	0.3%; $75 per year or $6.25 per month
Management fees for $100,000 account	0.3%; $300 per year or $25 per month
Expense ratios	Typically between 0.05% to 0.16%
Mutual funds	N/A

The Bottom Line

E*TRADE’s Core Portfolios features a simple account setup process and an intuitive desktop platform that's easy to navigate. It’s particularly good for younger investors who are always on the go and who want access to an industry-leading mobile platform. After all, E*TRADE is a pioneer in mobile investing. Core Portfolios is also starting to see the benefits of E*TRADE's integration into the Morgan Stanley financial ecosystem. Along with the addition of tax-loss harvesting, the depth and customization of the portfolios has taken a noticeable step forward. The biggest downsides of E*TRADE’s Core Portfolios are its weak goal and time horizons planning tools, along with the inability to consolidate external accounts. These are key missing elements that make it far less suited for investors with complicated finances. As Morgan Stanley continues to integrate E*TRADE, there are likely more enhancements coming for Core Portfolios that may address these weak spots. As it stands, Core Portfolios is solid on the fundamentals of creating and managing a portfolio but lacking on the soft side of supporting goal planning and nudging customers to achieve those goals.

How Does E*Trade Core Portfolios Help You Save Money on Taxes?

E*TRADE Core Portfolios automatically places customers opening taxable accounts with a Core offering into tax-sensitive portfolios that use municipal bonds and other tax-advantaged securities. Core Portfolios has also added tax-loss harvesting to realize losses in some areas of the portfolio to offset gains. For tax-loss harvesting, Core Portfolios is only looking at your holdings within the platform and not any outside accounts or other accounts with Morgan Stanley. That said, the tax-loss harvesting is designed to avoid wash sales and keep general allocations while making the overall portfolio more tax-efficient.

What Is E*TRADE Core Portfolios?

E*TRADE is an online discount brokerage that also has a brick-and-mortar presence. E*TRADE Core Portfolios is its robo-advisor offering that takes in basic information about an investor and suggests a diversified portfolio that matches the investor's risk tolerance and time horizon. The E*TRADE Core Portfolios offering can be a good option for those who are new to investing, thanks to its low account minimum.

How Much Does E*TRADE Charge for Core Portfolios?

E*TRADE’s Core Portfolios has a flat fee structure of 0.3%. A $10,000 account would have an annual fee of just $30. It's calculated at the beginning of each month. Core Portfolios customers will also pay ETF expense ratios, which average 0.05% for the Core offering and 0.14 to 0.16% for smart beta and SRI, respectively.

What Is the Difference Between Vanguard Digital Advisor and E*TRADE Core Portfolios?

Vanguard Digital Advisor and E*TRADE Core Portfolios are similar in several respects, providing reliable robo-advisor options. But Vanguard requires a minimum account balance of at least $3,000, which can be prohibitive for an investor who's just starting out or one who doesn't have a great deal of money to invest.

How Do I Get My Money From My E*TRADE Core Portfolios?

Your cash is moved into a money market account. You can transfer it from there into another E*TRADE account, such as a checking or premium savings account.

How We Review Robo-Advisors

Providing readers with unbiased, comprehensive reviews of digital wealth management companies, more commonly known as robo-advisors, is a top priority of Investopedia. We used our 2023 consumer survey to guide the research and weightings for our 2024 robo-advisor awards. To collect the data, we sent a digital survey with 64 questions to each of the 21 companies we included in our rubric. Additionally, our team of researchers verified the survey responses and collected any missing data points through online research and conversations with each company directly. The data collection process spanned from Jan. 8 to Feb. 9, 2024.

We then developed a quantitative model that scored each company to rate its performance across nine major categories and 59 criteria to find the best robo-advisors. The score for each company’s overall star rating is a weighted average of the criteria:

• Account Services: 10.00%
• Account Setup: 5.00%
• Customer Service: 5.00%
• Fees: 15.00%
• Goal Planning: 21.00%
• Portfolio Contents: 17.00%
• Portfolio Management: 17.00%
• Security & Education: 5.00%
• User Experience: 5.00%

Additionally, during our 2023 research, many of the companies we reviewed granted our team of expert writers and editors access to live accounts so they could perform hands-on testing. Through this all-encompassing data collection and review process, Investopedia has provided you with an unbiased and thorough review of the top robo-advisors.

Read more about how we research and review robo-advisors.

Separately, our research team conducted a survey of 205 U.S. adults aged 18 to 72 who are current clients of one of 18 robo-advisors. While the information collected did not influence the development of our ratings model, it was instrumental in gathering the valuable insights published in Investopedia's 2023 Robo-Advisor Consumer Survey.

Participants in our 2023 Robo-Advisor Survey opted in to an online, self-administered questionnaire from a market research vendor. Data collection took place between Aug. 30 and Sept. 15, 2023, with 11 video interviews conducted with volunteer respondents from Sept. 7 to Sept. 17, 2023. Multiple quality checks, including screeners, attention gauges, comprehension evaluations, and logic metrics, among others, were used to ensure only the highest quality responses were included.