Qplum closed down operations in 2019, after the following review had already been conducted. The company's homepage was replaced with a message that stated, in part, "We aimed to build a service to make investing accessible and transparent. Unfortunately, due to many business factors, we are no longer able to serve as your investment advisor."
Founded as a Delaware limited liability company by Mansi Singhal and Gaurav Chakravort in 2014, Qplum provides algorithmic investment advisory services for client funds held through investment management accounts at Apex Clearing, Interactive Brokers, Fidelity Investments, and TD Ameritrade. The platform offers a carefully honed approach to automated investing, though a buggy chatbox makes account setup a bit painful, and younger investors may need better resources across the board.
Integration with Fidelity, Interactive Brokers, and TD Ameritrade
Can talk with an advisor
Account transfer rebates
Engages in tax-loss harvesting
Limited goal-planning tools
High account minimum
Underperforms S&P 500 index
The robo-advisor supports individual, joint, and retirement accounts as well as trust, LLC, and UTMA/UGMA custodial accounts. The individual account minimum is $10,000, well above industry average, while retirement accounts can be opened for $1,000. Clients can transfer funds held at other institutions at the time of setup, receiving up to a $150 rebate, or open a new account. Apex Clearing supports fractional shares while other brokers do not, forcing algorithms to buy round lots.
New clients enter an email address and password to access the account setup page, which offers four types of investments—conservative, moderate, balanced, or aggressive. However, there’s limited goal planning after an automated Q&A session that won’t appear until the client links an account from Interactive Brokers, Fidelity Investments, or TD Ameritrade. Apex Clearing doesn’t show up as one of the choices, raising questions about the current status.
A chatbox app populates an Investment Management Action Plan (IMAP) that builds a customized user profile and algorithmic roadmap. Qplum states that IMAPs are constructed through factors such as risk tolerance, investing goals, tax situation, immediate and recurring financial needs, pre-existing investments, and general financial health. However, the initial experience with the question-and-answer app is disappointing.
For example, the initial chatbox response when first opening the program declares “I can tell you anything you want to know about Qplum, or we can start estimating.” However, a long string of simple search queries that included “financial planning,” “goal planning,” “college,” “college savings,” and “rebalancing” yielded one-line responses suggesting that the system didn’t understand the question.
Setup offers little client customization, with no socially responsible choices or other thematic investing. Sign-up also requires completing an advisory agreement, but clients can’t access its details until the funding pages. Allocations can also be discussed with an advisor, who can agree to changes.
Wealth management tools measure how the client stacks up against current market conditions. But limited options are likely to confuse younger account holders, with little categorization of narrowly based goals or milestones. A lack of strong goal-planning resources is a major downside, especially with young investors, forcing prospective clients into one of four broad portfolio categories before the user customization process gets underway.
There are few calculators or tools to assist narrowly-based goals, like college savings or household expenses, other than the chatbot collecting data on risk tolerance, age, employment, holding period, and assets. Clients also have access to financial planning tools at the brokerage holding their assets, but assumptions made at Fidelity or TD Ameritrade may generate different asset allocations and long-term performance projections.
Active clients can review progress and make changes to assumptions through an account management portal, with performance information that projects portfolio value over time. Details on asset allocation and account activity can also be reviewed while profile updates can be made directly from the screen with a few clicks. Marketing materials state that clients have access to a financial advisor through phone or email on an unlimited basis, starting with a “1-to-1 walk through session.”
Deposits require logging into the account management page and making a request that’s sent to a linked bank account. Automatic deposit capacity is limited to monthly contributions. Withdrawals are requested through the same interface but it takes four to five business days to receive funds. Accounts do not use margin and offer no banking services. Brokers typically provide those services to retail clients through savings and checking accounts, but there is no apparent functionality in the custodial agreements.
Qplum allows multiple portfolios under one account, although users must submit email requests.
The robo-advisor describes the four broad portfolio categories as follows:
- Conservative: an ultra-low risk portfolio which acts like a high-yielding checking account
- Moderate: a low-risk portfolio which generates stable income
- Balanced: the main investment and long-term growth portfolio
- Aggressive: an aggressive buy and hold portfolio for long-term investment
Portfolios are populated with mostly low-fee ETFs and mutual funds.The list features mostly instruments from Fidelity, Schwab, and Vanguard, along with Blackrock iShares ETFs. Portfolios may contain up to 50 instruments. Qplum doesn't buy stocks or direct fixed income products, and the client is responsible for ETF and mutual fund fees, redemptions, and early termination costs. The current level of those costs isn’t clearly disclosed.
Funding produces detailed portfolio and other information that can't be altered by client request unless they make a case for personal preferences through phone contact.
Qplum engages in proactive risk management during market downturns, lowering exposure as volatility increases. They discuss the advantages of this risk management strategy in marketing materials using 2008 analogies but real-life performance in a bear market has yet to be determined. They adjust portfolios on a daily basis, utilizing management techniques that propagate the following principles:
- Data-driven investments customized to the investor
- Quantitative risk management and scenario-based risk mitigation
- Machine learning methods and robustness of optimization
- Multi-level strategic rebalancing and smart trade execution
- Tax-loss harvesting
Back-testing methodologies are applied to evaluate the performance of strategies over a variety of “macroeconomic scenarios covering a broad range of large price events.” They evaluate profitability under each condition and recommend a portfolio of strategies best suited to protect the client from major risk events. Daily fractional rebalancing seeks to maintain a close alignment with the client profile.
The Qplum web site is mobile-ready. They also provide iOS and Android apps (although they have garnered mixed reviews). The mobile apps support two-factor authentication. Clients can also access excellent mobile resources and account management tools through Fidelity, interactive Brokers, and TD Ameritrade account logins.
The website contains a handful of links that highlight major account features, explain services, and disclose legalese requirements. Prospective clients can login to the first few pages of account setup, but important materials, including the chatbot Q&A, is locked behind a wall that requires linking to a brokerage account. Algorithms and the company's fintech roots are described in great detail and the founders’ respect for automated investing is evident throughout the materials.
Qplum's contact link opens into a phone number and email address that appears on the right side of many web pages. Calls made to this number established contact with a customer representative within 45 seconds. The fees page tells clients to contact the company by “chat,” but there was no other reference to this support function on the web site.
The FAQ is useful but omits key information, including a detailed description of chatbot questions and the type of advice and coaching received after account set-up, forcing the client to roll the dice without ascertaining the level of month-to-month interaction or guidance. Telephone service hours are listed from 9 a.m. to 6 p.m., Monday through Friday.
Education & Security
The site uses 256-bit SSL encryption and keeps no personal data. Brokerage partners hold all client funds, providing access to SIPC insurance and excess insurance. An Events section lists 70 high-level videos on financial technology and complex AI investing techniques, but few investment or planning tutorials. The account management interface also features Investment Library and Community links that are inaccessible by prospective clients.
Commissions & Fees
Qplum charges a flat 0.50% wrap fee annually for advisory services, paid in monthly installments. Clients are charged no trading fees but incur fees charged by ETFs and mutual funds after purchase. Some brokers will also charge a fee to transfer the account to another broker and to send wire transfers.
Is Qplum a Good Fit For You?
Qplum’s custodial agreements with Fidelity, Interactive Brokers, and TD Ameritrade offer an easy upgrade path for current clients. Many clients will also be impressed by the algorithm’s sophistication, which goes well beyond rivals trying to mimic modern portfolio theory (MPT). Customer service is above average and unlimited access to an advisor is hard to find at the competition.
Even so, prospective clients should demand better documentation about the account management interface and its customization features, along with stronger disclosure about ETF fees and an advisory agreement that has to be signed when funding. And they should be given an opportunity to review chatbox questions and kick the tires before being asked for personal information.
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