SogoTrade Gets Into Advisory Services With MarketRiders

December 4, 2017 — 10:55 AM EST

SogoTrade, the online discount brokerage, is expanding into asset management services thanks to its affiliate MarketRiders, which is a registered investment advisor. In late November, St. Louis-based Sogo, which has made a name for itself by offering low commissions on trades, announced that it will now help customers manage their money under a new service dubbed Sogo MarketRiders.

With the new service, clients can open regular and IRA asset management accounts for a 0.75% fee. According to the company, to get hand-holding and advisory services, customers of competing firms typically pay anywhere from 1% to 2% in fees and have to pay trading commissions on top of that. With Sogo MarketRiders, SogoTrade is combing its robo-advisor services with human investment advice, aiming to keep fees down to lure more customers its way. "Now we have paired the innovative MarketRiders technology with the trading capability of SogoTrade, thus allowing 'Sogo MarketRiders' to offer the complete robo-advisory experience to our clients," MarketRiders CEO Kris Wallace said in a press release.

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The move on the part of SogoTrade comes as all sorts of online brokerages and discount trading firms are melding robo-advisory services – in which computer algorithms pick the investments for self-directed investors – with the hand-holding that many want and need. In November, Wells Fargo & Company (WFC​) was the latest to get in on the game, launching the Intuitive Investor platform, which is a robo-advisory service that combines digital access to investing with the option of hand-holding by one of the company's financial advisors. When the San Francisco-based financial company first revealed plans for the new platform, it said it was going after existing millennial customers who may be looking to open their first investment account.

While millennials are self directed in nature, they do value advice – granted it's the right type. Fidelity Investments recently found in a survey that millionaire Gen Xers and Millennials expect a 16% return on their investment compared with the 7% return that Baby Boomers are looking for. What's more, 62% of Gen X and Millennial millionaires want their financial advisor to provide them with more comprehensive services, with 53% saying that they would find a new advisor if their current one isn't using technology. That compares with 25% of baby boomers who expect more from their financial advisors and 29% that want a tech-savvy financial planner.

Fidelity also found that 69% of the younger investors have referred at least one person to their advisor in the past year, which is much higher than the 48% of Baby Boomers who have done so. Moreover, 49% of respondents from the younger generations said that they would meet with their parents' advisor, but only 16% of financial advisors are actively targeting these younger investors, presenting a big opportunity.