Emperor Investments, founded in Toronto in 2018 by a Canadian investment professional and economics professor, delivers its services through a New York home office. The robo-advisor provides algorithmic advisory services for client funds held through asset management accounts at Virginia-based broker-dealer Folio Institutional. Emperor Investments is a solid platform for younger, more conservative investors—but doesn't offer those clients a mobile app in which to manage their account, or the option to add a joint account. Emperor Investments track record and flat-rate pricing are positives, which some will favor over some of the lacking services.
Interactive account management
No hidden costs
Encouraging track record
No tax harvesting
No account transfers
No mobile app
No margin or banking accounts
No joint accounts
New Emperor clients enter an email address to access the account setup page. No password is required nor is there an initial verification process through email. New clients receive a risk score and proposed portfolio allocation after answering a few questions about age, holding period, income, net worth, risk tolerance, and investment experience. After profile information is collected, Emperor generates a risk score, investment category, and market sector breakdown with no group holding more than 10% of total assets.
Customers are then greeted with an account wall requesting detailed personal information used to verify identify, choose an account type and complete funding. The account setup ends after picking investment goals, choosing cash allocations and setting up recurring deposits.
The client deposits funds through an account interface linked to a bank, with a $2,000 minimum opening requirement. The robo-advisor offers individual investment and retirement accounts but no joint or margin accounts. Emperor does not support transfers or rollovers from currently active accounts at other brokerages.
Clients can review monthly transactions and relative performance statistics on the account management pages and their Folio Institutional logins. The interface provides simple advice and recommendations about funding levels and portfolio mix if goals aren’t on track or profile changes are entered. An educational link includes general articles on many goal-oriented subjects that include retirement and college savings but no calculators, which would be helpful.
The account management interface presents standard performance metrics, and legal disclosures cover all major issues. Clients choose one or more specific goals at the time of funding and the interface provides coaching and recommendations based on up-to-date progress reports. Profile changes and deposit/withdrawal transactions may also generate rebalances and fresh investment advice.
Deposits require logging into the account management page and making a request that is sent to a linked bank account. Users can automate the process by setting up recurring deposits. Withdrawals are requested through the account interface, but fund receipt takes up to 7 business days if positions have to be closed to raise cash. There is no margin use, and cash in accounts earn no interest. It’s unclear if Emperor and Folio benefit financially from cash in accounts. Neither firm offers banking services, again reflecting the focus on basic service only.
A client's numerical risk score breaks down into typical qualitative categories divided between conservative, balanced and growth objectives. Proposed allocations track market sectors offering a diverse set of dividend-paying stocks. Account holders can switch dividend reinvestment on and off, but the value of this investment technique is emphasized throughout the marketing materials.
Portfolio allocations break down into ten major sectors:
- Consumer staples
- Consumer discretionary
- Health care
- Insurance, technology
- Basic materials
These categories may be further divided into related sub-sectors.
Stock picks may include socially-conscious companies, but algorithms don’t actively filter for these “green” operations. Each portfolio contains 15 to 44 stocks, depending on answers to questions about risk tolerance. Algorithms purchase fractional shares of stocks with long-term dividend histories through Folio after the account is funded. The account is rebalanced automatically at least once per year. The portfolio contains no ETFs, mutual funds or fixed income products.
Emperor features a scientific white paper on the portfolio techniques executed by the advisor’s algorithms. Stocks in their market universe are called the “Dream Team,” identified through a process that looks for a long and stable dividend history, conservative company management and perceived fair value at the current price level.
The FAQ breaks down algorithmic management techniques theorized in the white paper through the financial concepts of: anchoring, regret aversion, disposition, hindsight, familiarity and self-attribution leading to confidence. The Folio customer agreement includes no tax harvesting or interest-paying overnight sweep into an FDIC-approved account. Emperor automatically rebalances just once per year, lower than the industry standard.
Clients can’t change the final composition of system-defined portfolio picks, nor add or subtract securities from the mix after account funding, except to allocate cash. There are no management facilities for capital held through accounts at other brokerages.
Moreover, clients cannot borrow against accounts nor use standard banking services available in regular Folio brokerage accounts. The FAQ advises that clients “have access” to a portfolio manager, likely meaning the contact takes place through email rather than phone.
The Emperor Investments website is secure and responsive, but the company does not provide mobile apps for any operating system. This marks a major omission in a financial industry niche geared toward millennial investors. The homepage is also deceptive in this regard, with a screenshot of the account management page on an iPhone.
The web site is easy to navigate, highlighting major account features, services, and disclosures. Access to the account set-up process without a password is refreshing, allowing prospective clients to review the robo-advisor’s investment approach without giving out personal information. However, they need to do a better job explaining day-to-day account management and goal tracking beyond a few screenshots and broad-stroke descriptions.
The contact link opens into a simple entry form, with no phone number, email address or live chat. Service hours between 9 am and 5 pm Monday through Friday were not listed on that page, but rather found in the FAQ. Other pages include contact information with email address and phone number while opening the account setup triggers a live chatbox.
The FAQ is useful but omits needed information on account management, return methodology and automatic balancing schedule, which was located in the fine print. Calls to the listed phone number were answered promptly and it took an average of 30 seconds to speak with a live representative.
Education & Security
Emperor's client resources are useful but less extensive than more established rivals, with a learning portal that features a diverse collection of generalized blog entries on college savings plans, dividend diversification, holding periods, market volatility and other financial topics. Folio educational resources are limited to a blog and market research section while the robo-advisor provides basic educational materials through a blog that’s updated on a regular basis.
Both the robo-advisor and broker-dealer use 256-bit SSL encryption and provide clearly-stated privacy policies. Folio Institutional holds all client funds, providing access to Securities Investor Protection Corporation (SIPC) insurance and excess insurance.
Commissions & Fees
Emperor charges simple flat-rate pricing with a 0.60% of managed assets fee annually for advisory services, paid in 12 installments. There are no ETF or mutual fund fees because all positions are taken through fractional equities. Furthermore, there are no trading or withdrawal fees, but Folio Institutional will charge $100 to transfer the account to another brokerage. Emperor
Is Emperor Investments a Good Fit for You?
Emperor Investments offers a sound approach to automated investing, with an experienced management team and mature algorithms executing a conservative market approach through proven dividend reinvestment strategies. The advisory offers an excellent fit for young investors seeking conservative money management, but the lack of transfer or joint account capacity will force many prospective clients to look elsewhere. Touted returns and poorly-disclosed company historical information lower trust levels, but the robo-advisor can rebuild confidence easily through better documentation and quantitative data.
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