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Unimpressed by the generic investing guidance your current robo-advisor is giving you? With a unique blend of advice and algorithm, Round is here to turn your portfolio experience on its head. Let’s find out more in this Round Investments review.
Robo-advisor investment platforms are one of the hottest trends in personal finance. It feels as if a new product appears every day. Unfortunately, only a few of these services stand out above the crowd. Many seem to offer identical services and cookie-cutter advice.
Enter Round Investments. The robo-advisor is the brainchild of Saul Cohen. He worked on a team that managed multi-billion dollar hedge fund and mutual fund strategies at Guggenheim Partners. Now he wants to bring the same institutional investment process and opportunity to everyone.
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What Is Round Investments?
Cohen founded Round in 2016. The platform’s goal is to connect everyday investors not only with personalized portfolio allocations, but also with respected management firms that can help oversee those investments.
While Round is technically a robo-advisor, it prides itself on being different from the other platforms already on the market. Whereas most of those other companies utilize only algorithms and computer programs to manage investors’ portfolios, Round takes it a step further by using real people.
Round’s sophisticated software helps design portfolio allocations for you and your specific financial situation, goals, and timeline. However, respected firms around the country will actively manage the underlying investments of the funds in your portfolio.
And all of this is available for a significantly lower fee than you would find from a personal financial advisor.
Who Is Round Investments Best For?
Marketed toward “the 99%,” Round seeks to make premium investing and portfolio management a possibility for everyone. Round makes it possible to build a smart portfolio that’s hands-off for the investor but also managed by some of the best firms in the country.
If you’re an investor who wants to save for the future, grow your savings, and have a hands-off approach that’s still actively managed — all at a competitive price — Round might be the right choice for you.
However, note that currently, Round’s mobile app is available only to Apple iOS users. So if you have an Android phone, you’ll need to use your mobile web browser.
How Round Works
With Round, you’ll provide personal information about you, your current financial situation, future plans, and risk tolerance. From this information, Round will create a portfolio that reflects these personal goals, helping you build the savings you need to fund your future.
Based on the investments and allocations that Round determines are right for you, the service can automate and manage your portfolio without any effort on your part. Round will invest your recurring contributions, rebalance as necessary, and continue to actively manage your portfolio’s performance.
Now, keep in mind that you won’t be able to make changes to Round’s recommendations instantly from the app or website. Instead, you’ll need to email the Round team and let them know.
While this might be a detraction for those of us who really like control, it can actually benefit some investors not to have the power to fiddle with their allocation. After all, investors who constantly tinker with their portfolio tend to underperform the market.
What can you do from the app or web portal? Anytime you want to see how your Round portfolio is doing or add funds, you can quickly do so.
Round Investments Review: Pricing
Round’s level of service falls somewhere in the middle of a traditional robo-advisor and a personal financial advisor. It makes sense, then, that its fees also fall somewhere in between.
For reference, the typical robo-advisor charges around 0.25-0.50% for services, while most financial advisors bill their clients somewhere in the neighborhood of 1.0% annually.
Round’s program fee covers a variety of things, including brokerage, custodial, and investment advisory services.
The program fee charged on your portfolio is equal to 0.5% of your Round account balance, annually.
Here’s something unique about Round’s fee structure: If your returns are negative, your program fees for that month will be waived. No other digital investments service currently offers to waive your fees if your account loses value.
Round’s sophisticated software helps design portfolio allocations for you and your specific financial situation, goals, and timeline.
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How to Sign Up for Round
The process of opening an account with Round is fairly easy, and the company claims that it will take three minutes or less.
To sign up for a portfolio with Round, you can do so from the website or download the iOS app.
When you sign up, you’ll be asked to provide your:
- Name
- Email address
- Citizenship status
You’ll then be asked a few questions that will help you build your custom portfolio.
These include:
- Your main financial goal (buying a house, having a child, retiring, taking a trip, planning a wedding, buying a car, starting a business, or other), as well as your timeline for that goal and (optionally) how much you need to save
- Your investment style (conservative, moderate, or aggressive)
- What you do for a living
- Your annual income
- The value of your current assets
- Any debt you currently have
Based on these answers, Round will display a Recommended Portfolio for you. This analysis shows which firms will handle your assets and the percentage of your portfolio that will be under their management. Round will provide more information on each management firm so you can learn more about the company, its founder(s), and its track record.
Here are some of the fund managers you may “get to know” through your Round portfolio:
| Fund Manager | Highlighted Asset Classes and Strategies |
|---|---|
| Guggenheim Partners | CLOs, Aircraft ABS, Whole-Business ABS, High-Yield Bonds |
| DoubleLine | Agency MBS, Non-Agency MBS, CMBS |
| Highland Capital Management | Private Equity, Leveraged Loans, Distressed Investing |
| Gabelli Funds | Merger Arbitrage Strategy, Value Stocks, Growth Stocks |
| PIMCO | Government Bonds, Investment-Grade Corporate Bonds |
| Brookfield | Real Estate, Infrastructure |
| Cohen & Steers | Real Estate, MLPs |
| Aberdeen Standard Investments | Emerging Market Stocks |
Next, you’ll need to link your bank account in order to fund your account. This is done through a secure third party (Plaid) using bank-level security. The minimum account deposit is $500.
Is Round Safe?
When using Round, you’ll be protected by bank-level security. Additionally, you’ll use the third-party service Plaid in order to log in and link your bank account, as well as authenticate your information.
The SIPC protects your investments themselves for up to $500,000, which includes $250,000 in cash protection.
Round Pros and Cons
As with any robo-advisory service, there are both benefits and disadvantages to using Round Investments for your investment portfolio.
Round Investments Review: Pros
- Portfolios are actively managed… by real people!: Most robo-advisors are run by algorithms, meaning human eyes will never see your investments. At Round, however, real fund managers actively manage portfolios to ensure that your investments are performing as well as possible.
- In-app chat function: Have a question or want more information about your portfolio configuration? You can contact Round directly through the app with its chat function.
- IRAs are available: You can easily pair your Round investment account with a Round-managed Traditional IRA for a comprehensive financial management system.
- No performance-based fees: You won’t be punished for a well-performing portfolio through Round — the service doesn’t charge any performance-based fees.
- Round waives management fees for negative returns: If your portfolio loses money (has a negative return), Round will waive your management fee(s). (However, the expense ratios involved with any funds held cannot be waived.)
Round Investments Review: Cons
- Fees are on the high end for a robo-advisor: Typical robo-advisors charge 0.25-0.50% annually; Round charges 0.50%, putting it at the top of this range. However, few robo-advisors are actively managed by real people, so this may justify the cost for you.
- You don’t have much say in your initial allocations: After answering the opening questions, Round will give you one portfolio recommendation. You won’t have the option to make any instant adjustments to this recommended configuration, but you can send an email with your requests.
- The FAQ section is a bit lackluster: If you’re accustomed to robo-advisor platforms with robust resource and FAQ pages, you might be underwhelmed by Round. However, there are a handful of questions posted. This might be enough to answer whatever questions you have.
Alternatives to Round Investments
Since Round is a unique type of financial service, the alternatives available to you depend on exactly what you hope to get out of the service in question.
Technically speaking, Round Investments is a robo-advisor. When you sign up, you answer a questionnaire, and the algorithms generate a custom-made portfolio for you. Round will automatically deduct your fees from your cash balance, and your level of oversight for the portfolio is truly a matter of personal preference.
But Round also includes a human element in that your portfolio is managed by world-class fund managers.
It’s closest to the growing number of hybrid robo-advisors that bring both human and automated advice together for a fraction of what you’d pay a traditional financial advisor.
However, unlike these hybrid platforms, which include the pioneering robo-advisor Betterment, Round provides users with institutional-grade fund management.
Of course, Round isn’t as cheap as Betterment or Wealthfront, but you might find the management service worth the extra cost.
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Fee
0.5% of your Round account balance, annuallyMobile App
YesSecurity
Bank-level SecuritySummary
We all know that we need to invest in order to grow our savings and plan for the future. However, knowing where to start or exactly how that investment portfolio needs to look can be confusing.
Advisors can help. Whether you use a financial advisor or a robo-advisor, your professional guide will show you just how to start investing and how to manage a portfolio so that it grows as successfully as possible.
A platform like Round is a great mix of both advisory worlds. Not only will professional firms (real people!) manage your allocations and portfolio, but you’ll also enjoy a hands-off approach to saving.
Plus, the cost for using Round is substantially less than you’d pay a typical advisor, yet still on par with the average robo-advisor’s fees. This makes it a great option for anyone wanting to save money while also getting just a little bit more out of their overall investment strategy.
Author:
Stephanie Colestock is a personal finance expert and writer who enjoys teaching people how to be financially independent and confident about their money choices, regardless of obstacles in their path (such as the crippling student loan debt she once held). Stephanie graduated from Baylor University, and is currently working toward her CFP certification. Her work can be seen on sites such as Forbes, Dough Roller, and Johnny Jet, among many others.
