TD Bank Launches Robo-Advisor for Wealth Management

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ByG. Dautovic
October 19, 2021

On October 18, TD Bank announced the launch of its robo-advisor product called TD Automated Investing. Customers will need a minimum of $5,000 to open an account and will be paying an annual fee of 0.30%. In addition to their robo-advisor tool, TD Bank is also launching a hybrid advisor service - Automated Investing Plus - which requires $25,000 to get started, and incurs a 0.60% annual fee. Both services will provide customers with access to TD Strategic Portfolios: A package consisting of seven diversified ETF portfolios.

The cheaper of the two, TD Automated Investing, is targeted at mass retail clients, with a fully automated advisory service adjusted to each customer’s risk profile. TD Automated Investing Plus gives users access to an advisory team call center as well. Clients can communicate with a human financial advisor whenever they need.

Robo-advisors are platforms that provide users with automated financial planning and investment services. There is little to no human oversight here, as most financial decisions are made by algorithms - hence the “robo” in the name.

The robo-advisor market has practically exploded in recent years. The three largest banks in the US - JP Morgan, Citi, and Bank of America have all launched or announced the rollout of their own robo-advisor service. Other huge financial players, such as Charles Schwab, also offer this type of service.

While robo-advisors can be extremely lucrative for their creators, it’s evident that the market is already pretty crowded. High-profile players hold the strongest positions, and TD Bank will be facing some stiff competition.

To meet the demands of its expanding wealth-management business, TD Bank is looking to hire 350 financial advisors in the coming years, which would more than triple its current FA count. 

Currently, robo-advisors manage $460 billion in assets, with the industry expected to reach $1.2 trillion by 2024. Still, some experts have qualms about relying solely on algorithm-driven advisors, as they still can’t really replace human FAs. This is why an increasing number of financial institutions, including TD Bank, now offer hybrid services as well.

About author

I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm. This position proved invaluable for learning how banks and other financial institutions operate. Daily correspondence with banking experts gave me insight into the systems and policies that power the economy. When I got the chance to translate my experience into words, I gladly joined the smart, enthusiastic Fortunly team.

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