U.S. Bank Automated Investor Review

Pros and Cons of U.S. Bank Automated Investor

Types of Clients

Like most other robo-advisors, U.S. Bank Automated Investor has a very low barrier to entry, only requiring $1,000 to open an account. In addition to its account minimum, you must meet the following requirements to be eligible:

• Be a permanent resident of the United States
• Be at least 18 years of age
• Be an existing customer of U.S. Bank or any of its affiliate companies
• Be able to open the account online

Also, note that Automated Investor is solely available for individual retail clients. Corporate clients or institutional investors may not open an account for this product.

In addition to the firm’s account minimum, you must also cover the cost of Automated Investor’s wrap fee. This is a structure that encompasses both an annual advisory fee, as well as additional costs for transactions, fund management, and administrative expenses.

For those looking for a comprehensive wealth management solution, including both investment management and financial planning, you may be best served exploring the firm’s other options. For more information, be sure to check out our review of U.S. Bank as a full-service financial advisor firm.

How U.S. Bank Automated Investor Works

U.S. Bank Automated Investor is a discretionary automated portfolio management service. After you provide details about yourself as an investor (which we’ll outline next), it constructs a portfolio that aligns with your values. Then, it consistently monitors and, if needed, rebalances your investments to keep up with your target allocation and help you stay on track toward your goals.

As you sign up for an account, you’ll be prompted to answer a few questions regarding your preferences as an investor. This is a standard practice that allows robo-advisors to have information to base investment decisions on. Typically, it’ll ask about your:

• Goals. This refers to what you want to achieve with your account. These can be broad, like growing your wealth, or specific, such as saving for your children’s education.
• Risk tolerance. That is, how much risk can you handle with each investment? More risk tends to equal a focus on more aggressive securities, while less prioritizes equities that track the market or fixed income.
• Time horizon. In other words, when do you want to reach your goal? This, of course, depends on the type of objective you have. Some, such as saving for a home, may have a shorter time window than having enough to retire.

After Automated Investor has enough information about you, it’ll work to help you reach your goals. More specifically, it’ll assign you to a model portfolio that’s made up of low-cost exchange-traded funds (ETFs). These are securities that pool money from several investors and buy shares of various equities.

Fee Structure and Cost

U.S. Bank Automated Investor requires you to pay a quarterly advisory fee that amounts to 0.24% of your assets under management (AUM). This is a flat rate with which you will be unable to negotiate. As mentioned above, the firm’s fee structure is in the form of a wrap fee, which includes both typical advisory and additional expenses, such as trading, custody, market research, and tax reporting.

To help you conceptualize how much the fee costs, consider you have an account with $104,000 in it at the time of payment. At 0.24% of your AUM, your quarterly advisory fee would be $249.60.

Investment Philosophy

It can be difficult to imagine entrusting a computer to manage your investments on a discretionary basis. However, U.S. Bank Automated Investor’s algorithm follows very specific criteria to select investments that align with each client’s goals, risk tolerance, and time horizon. These break down as:

• Asset allocation. This strategy emphasizes allocating one’s funds across various asset classes to both mitigate risk and obtain positive returns.
• Diversification. Like asset allocation, this approach involves spreading one’s funds across several different securities to keep risk at bay.
• Glide path. With this method, the robo-advisor will periodically modify one’s portfolio to adapt to changing time horizons. This helps protect the investor from volatile market conditions as they approach their goal.
• Portfolio construction. U.S. Bank’s automated manager focuses heavily on investing in low-cost ETFs to construct clients’ portfolios.
• Tax efficiency. Per the wrap fee program brochure for the product, “All total portfolio solutions are designed with the goal of improving after-tax returns.” In other words, the firm will invest in securities with taxes in mind to minimize what you pay and maximize returns.

Keep in mind that, with Automated Investor, how the robo-advisor builds your portfolio is based on the information you provide. This is the guiding force for which securities it invests in, as well as how it rebalances over time.

Disclosures

U.S. Bancorp Investments, Inc. is registered with the U.S. Securities and Exchange Commission (SEC) as an RIA. This requires it to file an annual Form ADV, which lists any conflicts of interest or disciplinary actions against the firm or its representatives. According to its most recent filing, the firm has 25 total disclosures, 14 of which are regulatory events.

Customer Service and Becoming a Client

If you have questions about your account or Automated Investor in general, U.S. Bank’s primary contact page is a good place to start. Here, you can find answers to frequently asked questions and issues you may have. Alternatively, you can call (866) 758-8655 to directly speak with a representative about the robo-advisor product.

To open an account with U.S. Bank Automated Investor, you can do so by visiting the firm’s website or calling the number above. From the website, you can complete the sign-up process, including giving information about your goals, risk tolerance, and time horizon. Keep in mind that you must already be a client of the company to enroll in the program.

Methodology

This review is based on publicly available information directly from U.S. Bank’s website and the SEC. Neither the firm nor its representatives have any say on what we’ve included on this page.

Frequently Asked Questions

Is U.S. Bank Automated Investor a fiduciary?

Because U.S. Bank is registered with the SEC as an investment advisor, it and any of its investment advisor representatives (IARs) must adhere to a fiduciary duty. This standard also extends over to its robo-advisor software. Namely, the decisions the algorithm makes on your behalf must be in your best interest.

Is U.S. Bank Automated Investor good?

With its low account minimums and integration with U.S. Bank, Automated Investor is a good option for existing customers of the firm. However, because the product’s services are on par with other companies, it may not be worth signing up with U.S. Bank just to access its robo-advisor product.

For those who can access the product, it’s a well-rounded robo-advisor. The firm is clear about its investment philosophy and has a simple fee structure, albeit non-negotiable. The other differentiating factor of the firm is that it offers tax-loss harvesting, which some other companies don’t provide.

How often does Automated Investor monitor my account?

The robo-advisor monitors your profile on a daily basis. If any adjustments are needed, it will make them on your behalf.

How much does U.S. Automated Investor charge?

The program charges 0.24% of AUM each quarter. The percentage is based on a wrap-fee structure and is non-negotiable for all clients.