Prudential LINK, or LINK by Prudential, is the umbrella marketing name for Prudential Customer Solutions, Prudential Annuities Distributors, and various subsidiaries of The Prudential Insurance Company of America. Prudential Financial is one of the oldest insurance and investment companies in the United States, and Prudential LINK is its first direct to consumer offering. Usually, Prudential products are sold through advisor networks, so this is a departure for the firm.

The new LINK applicant is offered an automated investment program based on Modern Portfolio Theory (MPT) principles. Third-party life insurance and annuity solutions providers, Envestnet and QMA LLC, help construct the portfolios for funds held and cleared through Apex Clearing Corp. Prudential Customer Solutions manages those portfolios. The LINK program is open to individual and joint taxable accounts as well as traditional IRAs, Roth IRAs, and UTMA/UGMA custodial accounts.

Pros

  • Excellent goal-planning tools

  • Can talk with a financial advisor

  • Top-tier financial institution

  • Low expense ETFs

Cons

  • Higher than average management fees

  • No dedicated mobile app

  • Weak program disclosures

  • No tax-loss harvesting

Account Setup

3.5

It takes a few clicks to find the LINK program at Prudential’s full-service website. The setup process allows you to proceed anonymously through a well-constructed questionnaire that builds a timeline of life goals that includes emergency, family protection, college (if you have children), and retirement. Dollar targets are assigned to each goal, yielding proposed solutions through a Prudential-managed account, life insurance, and annuities.

You can stop the process at any time to work on goals, talk with an advisor via phone or screen-sharing application, or study up on an approach before making a choice. You can also review financial assumptions for each goal, which are laid out in an easy-to-read format. As an example, retirement assumptions include 3% consumer inflation, housing for two people, and standard mortality rates.

Once completed, the questionnaire builds a customized client profile that measures risk willingness through scaled results in the following four categories: Investing Risk, Loss Aversion, Inflation Risk, and Stay Invested. The final category tests your willingness to “stay the course” during market downturns and inevitable periods of high volatility.

Investment goals generate diversified portfolios, with pie charts and allocations between stock and bond index ETFs. You can place minor restrictions on portfolios, which permit the replacement of an ETF with a similar fund from another family. Their ETF universe contains just one index fund and one alternate for each asset class, while all picks generate relatively low fees. You can set up multiple accounts to focus on individual goals if required. 

Goal Setting

5

LINK offers great goal setting but falters when it comes to tracking your goals. Excellent goal-planning tools and calculators help you figure out how much money is needed to reach objectives within realistic time frames. Many tools focus on retirement, but college savings and life assessment calculators are equally valuable in long-term financial planning. In addition, you can talk with a financial advisor who helps construct and manage your long-term goals.

Unfortunately, weak goal-tracking capabilities reduce the effectiveness of this advice. You are provided only quarterly statements and a bare-bones interface that includes timeline, goal, and financial gap information but little coaching or handholding after the account is funded. According to disclosures, the quarterly report lists your ETF and cash allocations, the account’s rates of return, and the performance history. 

Account Services

1.3

LINK by Prudential is not as responsive as some platforms when it comes to moving money around. There’s no deposit or recurring deposit interface offered directly through the LINK program. Instead, all funding has to be sent directly to Apex Clearing. Cash withdrawals are equally cumbersome, with the fine print stating the program manager may “require the client to submit the request in writing in order for the request to be honored.” This old-school approach is bewildering and outdated, marking a major negative.

An overnight cash sweep into an FDIC-insured account pays interest but LINK does not disclose the current interest rate. The disclosure at the Apex site states they receive payment for order flow from participating banks and may share income with Prudential.

Portfolio Contents

2.3

As a storied insurance and investment company, it is no surprise that Prudential’s LINK takes a traditional approach. New clients are offered one of six investment portfolios—customized by age, holding period, risk tolerance, and other criteria—or you can choose a reserve portfolio for a lower fee. PMA Strategic Portfolio allocations include Aggressive Growth, Growth, Moderate Growth, Moderate, Moderate Conservative, and Conservative. Alternatively, the PMA Reserve Portfolio provides a highly liquid management account for clients with short-term capital obligations.

ETFs included in LINK portfolios are purchased through fractional shares and are passive, seeking to track the performance of a securities index while maintaining low expense ratios. The six model portfolios are further detailed as follows:

  • Conservative: Invests primarily in fixed-income ETFs (15% Stocks & 85% Bonds).
  • Moderate Conservative: Generates capital through a large allocation to fixed income, while maintaining a smaller allocation to equities (30% Stocks & 70% Bonds).
  • Moderate: Seeks to generate income while providing modest long-term capital appreciation (45% Stocks & 55% Bonds).
  • Moderate Growth: Diversifies through fixed income and equity classes while seeking moderate capital appreciation and income generation (60% Stocks & 40% Bonds).
  • Growth: Invests in ETFs with allocations tilted towards equity classes and a smaller portion dedicated to fixed income (75% Stocks & 25% Bonds).
  • Aggressive Growth: Attempts to generate aggressive long-term capital appreciation (90% Stocks & 10% Bonds).

Portfolio Management

2.7

The portfolio management offered through Prudential LINK is a bit generic considering the cost. The investment methodology is poorly disclosed in the SEC-mandated ADV-2 brochure, referring only to passive management of the six model portfolios, but all themes follow Modern Portfolio Theory (MPT) principles. LINK rebalances your portfolio quarterly, seeking to lower drift through sales of securities in asset classes that have grown too large and purchases of securities in asset classes that have shrunk too small.

They perform no tax-loss harvesting and you cannot trade or make any changes after account funding, other than asking for the alternate ETF. However, your profile can be changed at any time, triggering new risk scores and portfolio recommendations. The fine print mentions consolidation of external accounts for reporting purposes but the review found no details or procedures at the web site. 

User Experience

2

Mobile Experience:

The website is mobile-ready but Prudential provides no iOS or Android mobile apps specifically for the LINK program. Their current and poorly-reviewed app, called Prudential Retirement, focuses primarily on 401K accounts and isn’t linked to the main website. This approach matches other remnants of low-tech thinking found throughout the review, highlighted by sparse online management facilities and an FAQ informing clients they need a Pentium computer and a 28.8k modem to use the website. 

Desktop Experience:

Prudential has done a good job generating high visibility for the LINK program, despite a massive website with diverse program objectives. A dedicated FAQ is also useful but omits a ton of needed information. Depending on how deep you like to go before committing to a platform, this lack of information can raise frustrations while lowering trust levels. Fee information and required disclosures are well-written and easy to find but also lack many details on what to expect after funding. 

Customer Service

4.4

You may be in for some longer than expected wait times, as LINK account holders use a different phone number than the broader Prudential clientele, with customer service hours listed from 9 a.m. to 6 p.m., Monday through Friday. Contact attempts generated a variety of unacceptable waiting times that averaged over three minutes per call. The site features a screen-sharing function instead of live chat, allowing the consulting advisor to view financial data directly on the client’s home screen. 

Education & Security

3.6

As mentioned, the Prudential site provides excellent goal-planning tools along with extensive financial planning resources. There are tons of general investing and personal finance articles, tools, and calculators. You can use these resources to estimate the cost of retirement, perform top-down asset reviews, and plan major life events. Better yet, they can be accessed anonymously, allowing you to take a close look “under the hood,” which is needed because the sparse FAQ does a poor job disclosing management features and goal-tracking capacity.

The site uses 256-bit SSL encryption while third-party Plaid collects and maintains personal data. Apex Clearing holds all client funds, providing access to Securities Investor Protection Corporation (SIPC) insurance and excess insurance, as well as FDIC insurance for overnight bank sweeps. 

Commissions & Fees

1.8

Link by Prudential charges you a hefty 0.79% wrap fee on the first $100,000 in assets for the classic investment portfolio, paid quarterly, dropping to 0.69% up to $500,000. A 0.20% fee is charged for the cash-heavy “emergency” portfolio. Account funding is cumbersome—requiring checks, wire transfers, or ACH transactions through Apex rather than a LINK account interface, with a minimum $5,000 for the investment portfolio and $100 for the cash-heavy portfolio. Transferring assets from another financial institution is clumsy as well, requiring you to make a phone call to customer service.

To Prudential’s credit, they don’t buy proprietary ETFs, avoiding double-dipping practices that have grown popular with large financial institutions. Apex charges paperwork fees to transfer accounts to other brokers or to send wire transfers. 

Is LINK a Good Fit For You?

LINK may be a fit for investors wanting to do business with a rock-solid financial institution, but you have to be prepared to pay higher-than-average management fees to be part of the Prudential brand. The extra cost may be tough to justify because equally potent investment portfolios can be built for lower fees at many rivals, who also provide superior coaching and hi-tech account interfaces—with advanced goal-tracking and dedicated mobile apps.

Prudential LINK is walking a fine line with this product, trying to offer a competitive, direct-to-consumer service while still maintaining a role for its network of advisors. The goal-planning process gives a glimpse of what Prudential LINK could potentially be, but there are too many friction points and gaps in the system for it to excel on its own merits. As it stands, LINK by Prudential relies too heavily on the Prudential brand to gloss over some of the shortcomings in its service offerings.

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