Essential Portfolios: Automated Low-Cost Investing Solution

The automated investing solution from TD Ameritrade Investment Management assigns a confidence score to help long-term investors see if they can reach goals.

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It’s hard to play the game if you don’t know the score.

That’s just as true with investing as on the gridiron or the diamond. Millennial investors in particular may feel confused as they struggle to determine their financial health and find an appropriate investment solution among the many available.

That’s why the new automated investing solution from TD Ameritrade Investment Management, LLC assigns a confidence score that helps long-term investors get a sense of their status and how likely they are to meet their goals. The automated advisor solution, called Essential Portfolios, can be especially useful for busy millennials thinking about key financial benchmarks such as buying a home, saving for a child’s education, and retirement.

“One of the biggest advantages of Essential Portfolios is the confidence score we give,” says Tom Casey, Senior Manager, Guidance Products, TD Ameritrade. “We assign a number so our clients can better understand the probability of reaching their goal.  The confidence score is based on how much they are willing to invest today, in the future, and the managed portfolio that has been recommended to the client."

Once the confidence number, or investor score, is defined, the investor can make adjustments to help improve his or her chances of reaching goals.

“If the confidence score isn’t as high, that sends a message which can be very helpful for any investor,” Casey says. “You didn’t get the score you wanted, but here’s something you can consider to boost your score. For example, what does your monthly contribution need to be? What happens to your score if you adjust your risk tolerance? And the advisory service gives ideas and tips constantly, so it’s not just giving you a number today; it’s a journey we’re taking with you. An ongoing relationship.”

A mere minute or two on the smartphone can reveal an investor’s chance of achieving his or her goals, and offer suggestions if they’re not currently on the right path. Once signed up, the automated tool does all the work, saving time and energy that young investors may need to juggle jobs, families, and other responsibilities.

Why should a young investor check out Essential Portfolios? Besides the confidence score—which helps set the system apart—here are a few other advantages:

Low Investment Minimum

One can sign up for Essential Portfolios with as little as $5,000 to invest. That means it’s a good place to invest an Individual Retirement Account (IRA) or a Roth IRA. The low investment minimum makes it a bit more attainable for the millennial investor, and also helps investors get an early start, which can be important for pursuing the long-term outcome.

Easy to Use

Essential Portfolios has a smartphone app that makes it easy to check on your progress. Signing up takes just a few minutes, and allows the investor to choose a risk tolerance and quickly get a confidence score.

Helpful Data Available Quickly

Within about two minutes of getting on the system, the investor will have an easy-to-read chart showing their chance of reaching goals. Want to know the probability of being able to meet a financial goal in 10 years, 20 years, or 30 years? The probabilities pop up quickly, along with expected rates of return, giving investors a better sense of the road ahead.

Flexible Based on Your Needs

Essential Portfolios isn’t one-size-fits-all. Just hop online and give it a quick try. Saving for wealth generation? Retirement? A specific goal such as a college education or down payment? Start by inputting what you want to accomplish, and Essential Portfolios will recommend a managed portfolio based upon your financial goals.

Advice in Your Pocket

It used to be that investors had to talk to a live advisor to be able to invest in a managed portfolio. Even many traditional online investing tools are long on technology but short on analysis. An investor answers the questions regarding his or her goals, risk tolerance, and amount to be invested, and Essential Portfolios will recommend a model portfolio based on the client’s answers. If the inputs suggest an investor may not be on track to meet a preferred outcome, the system will immediately offer ideas on how to adjust plans. 

Automated for Simplicity

Once an individual has invested in an Essential Portfolio, the portfolio  is automatically invested, reallocated and rebalanced. Young investors have a lot going on in their lives, and Essential Portfolios helps keep investing from being a headache.

FIGURE 1: PROJECTING THE FUTURE. As part of the Essential Portfolios experience, investors see a probability chart and score, which can be particularly helpful for millennial clients with a long time frame. Source: TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results.

Automated Investment Solution

Essential Portfolios uses advanced technology in an interactive user experience to help you pursue your financial goals.

Advisory services are provided by TD Ameritrade Investment Management, LLC.

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Before investing carefully consider the underlying funds’ objectives, risks, charges, and expenses. For a prospectus containing this and other important information about each fund, contact us at 888-310-7921. Please read the prospectus carefully before investing.

All investments involve risk, including loss of principal. Past performance does not guarantee future results. There is no assurance that the investment process will consistently lead to successful investing. Asset allocation and diversification do not eliminate the risk of experiencing investment losses.

Advisory services are provided by TD Ameritrade Investment Management, LLC (“TD Ameritrade Investment Management") , a registered investment advisor. Brokerage services provided by TD Ameritrade, Inc. TD Ameritrade Investment Management provides discretionary advisory services for a fee. Risks applicable to any portfolio are those associated with its underlying securities. For more information, please see the Disclosure Brochure (Form ADV Part 2A).

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