E*TRADE Core Portfolios Review 2024: Pros, Cons and How It Compares

Where E*TRADE shines

Where E*TRADE falls short

What E*TRADE is best for

E*TRADE at a glance

Full details about E*TRADE

Is E*TRADE right for you?

How we review robo-advisors: our methodology

Where E*TRADE Core Portfolio shines

Portfolio fees and specialty options: E*TRADE Core Portfolios uses low-cost exchange-traded funds with low expense ratios. It also offers socially responsible ETFs and multiple smart beta ETFs.

Strong customer service: Customers gain access to excellent customer support and an impressive arsenal of investor tools and educational resources, including financial planning guidance from investment advisor representatives.

Where E*TRADE Core Portfolios falls short

Tax strategy: The company doesn’t offer tax-loss harvesting, a service that can significantly reduce capital gains taxes.

E*TRADE Core Portfolios is best for:

• Current E*TRADE customers.

• Cost-conscious investors.

• Hands-off investors.

• Automatic rebalancing.

E*TRADE Core Portfolios at a glance

Reviewed: Oct. 2023

Period considered: Aug. - Oct. 2023

More details about E*TRADE Core Portfolios' ratings

Account minimum: 4 out of 5 stars

E*TRADE Core Portfolios has a $500 account minimum that applies specifically to an E*TRADE Core Portfolios account rather than an aggregated balance across all E*TRADE accounts. However, existing E*TRADE clients can use the intra-firm transfer tool to easily convert their accounts to Core Portfolios. You don’t need to sell any securities before doing so — the robo-advisor will do that for you by liquidating holdings that aren’t in your recommended portfolio, commission-free. (You may, however, have capital gains or losses in the process.)

Account management fee: 4 out of 5 stars

To manage your account, robo-advisors sometimes charge a fee. E*TRADE Core Portfolios charges a fee of 0.30%. If you have a balance of $50,000, for instance, your account management fee would be $150.

Investment expense ratios: 5 out of 5 stars

E*TRADE uses low-cost exchange-traded funds, with expense ratios that average 0.06% for Core Portfolios. The average for the smart beta portfolio is 0.14%, and the average for the SRI portfolio is 0.16%.

Account fees: 3.5 out of 5 stars

Robo-advisors sometimes charge fees for activities such as transfers. With E*TRADE Core Portfolios, you’re charged $75 for a full transfer out and $25 for a partial transfer out. If customers choose to do a partial transfer and they have a balance over $5,000, they aren’t required to pay the partial transfer fee.

Customers will also pay a $2 handling fee for each E*TRADE Securities paper statement mailed to them unless they’re exempt. According to E*TRADE, “Exemptions include: customers enrolled with electronic statements, retirement and custodial accounts, global trading accounts; customers with a combined value of $10,000 in cash and securities in linked E*TRADE Securities accounts; customers with a combined balance of $20,000 or more in linked E*TRADE Securities and E*TRADE Bank accounts.”

Portfolio mix: 3.5 out of 5 stars

Each customer or potential customer is taken through a series of nine questions designed to assess risk tolerance. The questionnaire is one of the most thorough we’ve seen. E*TRADE poses queries from multiple angles to try to figure out how the investor will tolerate various levels of risk and market fluctuations. And, admirably, the profile questionnaire is available without logging in or creating an account.

Once you've finished the questions, you're able to view a recommended portfolio. E*TRADE shares a recommended asset allocation, along with 15-year historical index returns in a best, worst and average-case scenario for context. Investors are presented with two options — a recommended portfolio choice and one with more or less risk than the recommended portfolio.

E*TRADE shows customers the specific investments that will be in their portfolio in an investment proposal near the end of account enrollment. If their financial situation or goals change, they also have the option to update their portfolio to match their new circumstances.

Customers can expect a well-diversified portfolio. There is also the option of multiple smart beta ETFs. The smart beta strategy doesn’t offer a direct allocation to commodities or real estate, but does offer REIT exposure, particularly in the small-cap position, and commodity exposure indirectly through companies associated with commodity extraction and production.

Socially responsible portfolio options: 5 out of 5 stars

Clients have the option of personalizing the equity portion of their portfolios by swapping E*TRADE's standard-issue ETFs with socially responsible ETFs, which will screen out companies that don't align with certain environmental and social values.

Accounts supported: 4 out of 5 stars

E*TRADE supports individual and joint non-retirement accounts; custodial accounts; Roth, traditional, rollover and SEP IRAs.

Tax strategy: 2 out of 5 stars

In taxable accounts, tax-loss harvesting involves selling losing investments to offset the gains from winners and reduce capital gains taxes. It’s widely available among robo-advisors for free, although some advisors impose an additional balance requirement before the service takes effect. E*TRADE Core Portfolios doesn’t currently offer tax-loss harvesting, but does expect to add it in 2024.

For now, Core Portfolios automatically enrolls all taxable brokerage accounts in a tax-sensitive strategy using municipal bond ETFs that can help minimize Uncle Sam's bite on the interest and dividends associated with those portfolios. Customers can choose to opt out by taking the questionnaire again.

Automatic rebalancing: 5 out of 5 stars

When the market shifts, that can cause your asset allocation to shift. E*TRADE offers drift and semiannual rebalancing of your portfolio to make sure your asset allocation stays in line with your investment goals and risk tolerance. It will also review your account for material deposits and withdrawals, and rebalance if it shifts too far from its target asset allocation.

Human advisor option: 4 out of 5 stars

Customers won’t have access to individual financial consultants. There is, however, access to a team of investment advisor representatives who have their Series 7 and 66 designations. Some employees are certified financial planners.

Bank account/cash management options: 2 out of 5 stars

Customers can open premium savings accounts with E*TRADE. It currently offers a 4.25% annual percentage yield.

Customer support options: 4 out of 5 stars

In addition to the vast library of tools and investor education, as noted above, E*TRADE Core Portfolios customers can consult with a team of investment advisor representatives during extended hours seven days a week.

They can provide guidance on building a retirement portfolio, and estimate projected income and financial needs in retirement. They can also provide investment recommendations, deliver portfolio-building strategies, and advise on financial decisions such as retirement, college and tax planning.

For general customer service, live representatives are available to answer questions via phone or chat 24/7.

A portion of our rating for customer support is devoted to how easily our testers are able to uncover key bits of information on the provider's website. With E*TRADE Core Portfolios, we struggled to find details we think are important for potential customers, including the investments used in portfolios and instructions for closing an account.

Other E*TRADE Core Portfolios features you should know

Clients also have access to all of the educational content provided by E*TRADE, which is extensive: Investors can learn about topics such as how to build an emergency fund and how to perform complex options trades. E*TRADE's website also provides impressive retirement planning tools and guidance.

Is E*TRADE Core Portfolios right for you?

E*TRADE has created a solid contender in the robo-advisor arena. While the service's management fee is a bit above that at two other robo-advisor heavies — Wealthfront and Betterment, each charge 0.25% — the ETFs used by E*TRADE may have lower expense ratios, depending on your portfolio.