New and Notable
On May 17, 2022, Wells Fargo Wealth & Investment Management (WIM) announced the addition of Environmental, Social & Governance (ESG)-focused portfolios to its product offering. In addition, Investors can now access the robo-advisory platform with only a minimum $500 investment.
The banking giant Wells Fargo and Company operates the Intuitive Investor program as part of its subsidiary Wells Fargo Advisors. Wells Fargo Intuitive Investor provides automated management of professionally curated portfolios that lean heavily on Modern Portfolio Theory (MPT) principles. Financial Advisors are available by phone, Monday through Friday, 8 am to 8 pm ET, to answer questions and provide guidance. The service is designed for current Wells Fargo clients seeking investment advice who are willing to engage digitally while also having access by phone to a financial advisor.
- Wells Fargo Intuitive Investor is convenient for existing Wells Fargo banking customers.
- Tax-loss harvesting is available.
- The signup process gets personal very quickly.
Can speak with financial advisors.
Top-tier financial institution.
No performance data.
Relatively high account minimum.
Must give social security number to view recommendations.
You can access the Intuitive Investor program through the Wells Fargo Advisors site. On the site, there is an informative breakdown that compares fees and service levels between automated and fully human advisories. However, the setup process gets personal quickly, requiring you to log in to an existing account or open a new one before you answer any other questions. If you're already a Wells Fargo client, this won't be a problem, but it's clear that Intuitive Advisor is not designed to bring new customers onto the stagecoach.
This roadblock, requiring personal data so quickly, contradicts Wells Fargo Intuitive Investor’s claim that there is no commitment required to view the questionnaire and portfolio recommendations. That should be reworded to say there is no financial commitment. It also marks a major negative because applicants should demand a closer look “under the hood” before handing out personal data, especially to a commercial bank that is still facing legal fallout from a 2016 account fraud scandal that affected millions of customers.
Once you have created or logged into a Wells Fargo account, you fill out a short questionnaire about investment goals, time frame, and risk tolerance. Once that's done, the system recommends one of nine model portfolios spread across conservative, balanced, and aggressive risk themes.
You cannot make changes or trade directly, but securities transferred from another account may be retained if they replace one or more ETF allocations. Your risk profile can be changed at any time, potentially triggering a different portfolio allocation.
A $500 minimum is required to fund your portfolio, which can be established as an individual or joint taxable account, traditional individual retirement account (IRA), Roth IRA, SEP IRA or trust account. Accounts that fall below $4,000 will receive a notification, after which you will have 30 days to bring the balance above that amount in order to be eligible for the digital advisory services. Otherwise, your funds will be transferred into standard brokerage accounts. If your balance drops below $500, Wells Fargo will automatically sell your account holdings.
New clients can also directly roll over a 401(k), 403(b), 457(b) or other plan held with a former employer. Once a deposit or transfer is made, it can take three to five business days for the funds to appear in your account.
Intuitive Investor’s goal-oriented resources are divided into life planning and investment commentary sections, providing a wealth of useful information. This is offset by the fact that it is poorly organized, forcing you to drill through a lot of content to find relevant topics. These sections would greatly benefit from centralization, a search box, a table of contents, and a listing of hot topics.
A financial advisor is available to you by phone between 8:00 a.m. and 8:00 p.m. Eastern time, Monday through Friday. There is a support line open 24/7 for technical issues with the app or website. You can fill out an online form to have a financial advisor contact you to walk you through Wells Fargo's Envision process, which can help you and your Financial Advisor clarify and prioritize your goals to create a tailored investment plan. This is not a feature that you can access independently, however.
The robo-advisor is well integrated with other Wells Fargo offerings, making it an attractive investment vehicle for existing clients. You can make deposits, set up recurring deposits, and initiate withdrawals through the account interface. Margin is not available, nor can clients borrow against their accounts.
Intuitive Investor also includes Cash Services, providing money transfer to and from other Wells Fargo accounts. This service lets customers make deposits at any Wells Fargo branch as well as through the mobile app, and send and receive money through the Zelle transfer service. A Wells Fargo checking account lets you use bill paying services on the web or through the mobile app.
Interest is earned on unallocated cash through an overnight bank sweep into FDIC-insured accounts and non-FDIC-insured money market mutual funds. Wells Fargo Advisors “may receive fees and other financial benefits” through the different sweep vehicles.
Wells Fargo Intuitive Investor offers you a classic portfolio approach with a bit of a weighting twist. Portfolio contents follow the categorization scheme found at most rivals, subdividing into nine portfolios that span very conservative to very aggressive risk objectives. Between eight and 14 ETFs are used to populate each portfolio. In addition to low-cost ETFs that track market-weighted indexes, the Intuitive Investor platform also buys ETFs that track the performance of equally-weighted, fundamentally-weighted, and volatility-weighted indexes “in an effort to achieve higher returns and better long-term diversification.” The site states that the ETFs are selected by humans at the Wells Fargo Investment Institute, but there wasn’t a readily available listing of providers and typical funds for review.
Intuitive Investor offers you the basic portfolio management that can be found at most robo-advisors. The platform maintains a broadly diversified portfolio that includes investments from a variety of market sectors and asset classes. The methodology follows traditional MPT principles, emphasizing the benefits of low-cost securities, diversification, and indexing to achieve long-term financial goals. As with rivals, algorithms don’t base decisions on market timing or short-term performance.
Intuitive Investor rebalances your portfolio “as often as necessary” to maintain allocations. The portfolio is checked daily at a minimum to ensure that allocations are within thresholds. You can also engage in tax-loss harvesting on your individual or joint taxable account through a free opt-in program. If you enable tax-loss harvesting, Intuitive Investor will substitute similar ETFs to offset capital gains while maintaining your portfolio’s asset allocation.
You can get to your account management functions through Well Fargo’s single unified log-on. The interface is highly functional, with account services, performance breakdowns, long-term projections, and tools to evaluate the potency of the current market approach. It also supports customized portfolio views, detailed research, and technical charting, as well as real-time market updates. You can also send secure messages to advisors and access account documents through this portal.
The website is mobile-ready and easy to read. Wells Fargo provides the same full-featured iOS and Android apps for all types of accounts, with two-factor authentication and nearly all account functions that are accessible through the desktop management interface.
Intuitive Investor is part of the Wells Fargo Advisors site, but finding the program can take a few clicks because it comprises just one of multiple offerings. A full-featured FAQ complements a professional marketing presentation, providing most of the information needed to open an account. Information on methodology and portfolio construction has been written for the layperson, avoiding fine print, and an account preview highlights major features.
Our review found no SEC-mandated wrap fee brochures on the public website. Disclosures at the SEC site were limited to an omnibus wrap fee brochure that includes Intuitive Investor on a laundry list of advisory programs. However, that document doesn’t outline or disclose specific fees, market activities, objectives, or conflicts of interest. As with some other robo-advisors, this marks a major omission by Wells Fargo as many seasoned investors consider the ADV-2A the quickest way to assess an offering.
Telephone service hours vary by department, with 24/7 coverage for general questions about online services. As mentioned, financial advisors are available to you between 8:00 a.m. and 8:00 p.m. Eastern time, Monday through Friday. Contact attempts produced a variety of unacceptable waiting times averaging a hefty four minutes and 25 seconds, while one call reached a representative who wasn’t knowledgeable about basic program details.
There’s no live chat, and a warning message indicates that Wells Fargo won’t handle financial functions like transfers and withdrawals through email due to its inherent insecurity. That said, a full-featured and well-written FAQ covers the Intuitive Investor program in detail, reducing the need to slog through dense legalese disclosures, agreements, and other fine print.
Education & Security
The Wells Fargo website provides you ample goal planning resources through its Investment Insights and Planning for Life sections, which are dedicated to basic and advanced investment topics as well as high-level market commentary by Wells Fargo staff. Sections also feature dozens of checklists, how-to articles and calculators for a wide range of goals that include marriage, divorce, retirement, and estate planning.
Overall, the educational resources are useful but not well-organized, lacking a search function and table of contents.
Security is up to industry standards, with Intuitive Investor using 256-bit SSL encryption as well as two-factor authentication for both desktop and mobile functions. Wells Fargo also guarantees fund replacement if the site or account is hacked. The wholly-owned Wells Fargo Advisors Financial Network holds client funds, providing access to Securities Investor Protection Corporation (SIPC) and excess insurance.
Commissions & Fees
The program is marketed primarily to existing Wells Fargo customers seeking to leverage relationships by discounting fees to enrollees of Portfolio by Wells Fargo (PWF). Intuitive Investor charges a 0.35% wrap fee that includes transaction costs, but PWF customers who have an account linked to a Wells Fargo Bank Portfolio by Wells Fargo pay just 0.30%. The account minimum of $500 is similar to other robo-advisors, though higher than those aimed at millennials. The ETFs average between 0.11% and 0.17% expense ratios. Wells Fargo charges a steep $95 fee to terminate an IRA account or to transfer the account to another broker.
- Monthly cost to manage a $5,000 portfolio: $1.46 ($1.25 with PWF)
- Monthly cost to manage a $25,000 portfolio: $7.29 ($6.25 with PWF)
- Monthly cost to manage a $100,000 portfolio: $29.17 ($25.00 with PWF)
Is Intuitive Investor a Good Fit For You?
Intuitive Advisors offers excellent resources and automatically managed investments to existing Wells Fargo customers at a moderate cost. Like some of the other robo-advisors tied to financial majors, it appears that Wells Fargo is looking to prevent clients from leaving to explore robo-advisors at other financial firms rather than attract new clients into the fold. This impression is compounded by the fact that the account minimum is beyond the reach of most beginner investors. More to the point, many new applicants may walk away after looking at the setup process, which requires a social security number before viewing the questions or portfolio. This roadblock could work at other top-tier institutions, but Wells Fargo doesn’t have that luxury after undermining client trust in the 2016 scandal.
If you are already part of the Wells Fargo product universe, however, Intuitive Investor is cost-competitive for the automated management services it brings to your portfolio. The tweaked approach to MPT with the different weighting approaches is also an interesting departure, but it would be nice to see robust performance metrics backing up the approach. That said, the high minimum to open an account and the lack of an upfront preview suggest that investors unaffiliated with the Wells Fargo universe may find a better fit with more nimble competitors.
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|Education & Security||5%||6|
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