J.P. Morgan Investing Review – Self-Directed & Automated Platforms

There are discount online brokerages, and there are truly discount online brokerages.

Formerly known as You Invest by J.P. Morgan, J.P. Morgan Investing (or, simply, J.P. Morgan) is among the latter. Not because it’s bare-bones or devoid of any of the useful tools and features DIY investors (including new investors) need to stay on top of the market, but because it’s really inexpensive. J.P. Morgan clients with prior Chase Bank relationships may never pay commission on stock or exchange-traded fund (ETF) trades placed on the platform.

Even if you’re not an existing Chase customer, you’ll pay less to trade stocks here than at virtually any other major brokerage, and you’ll enjoy truly commission-free trading on the self-directed side. J.P. Morgan has a reasonably priced managed investing option too, though it’s basically a robo-advisor that’s not a suitable replacement for high-asset investors seeking truly bespoke advice and management.

If you’re looking for a low-cost trading or managed investing option that delivers everything you need to build a diversified portfolio and nothing you don’t, J.P. Morgan Investing is worth considering.

J.P. Morgan Investing Platforms and Plans

J.P. Morgan has two distinct trading platforms: a low-cost DIY brokerage option and a reasonably priced, hands-off automated managed investment option, both available in a desktop platform and mobile app.

Both platforms allow for individual taxable brokerage accounts, tax-advantaged retirement accounts (Roth and traditional IRA), and three types of taxable joint accounts: joint tenants with rights of survivorship, joint tenants-in-common (ideal for non-coupled joint account holders), and joint with community property (available in community property states only).

Here’s the skinny on J.P. Morgan Self-Directed Investing and J.P. Morgan Automated Investing.

J.P. Morgan Self-Directed Investing

J.P. Morgan Self-Directed Investing is J.P. Morgan’s low-cost DIY brokerage platform. It offers unlimited commission-free trades (stock and ETF) with no account minimums and no balance requirements.

While options trades are commission-free, J.P. Morgan does charge a $0.65 fee per contract.

Account Opening Bonus

Open a new J.P. Morgan Self-Directed Investing account by Oct. 10, 2022, and fund your account with qualifying deposits within 45 days to earn a bonus worth up to $625.

Bonus tiers are as follows:

• Deposit $25,000 to $99,999: $125 bonus
• Deposit $100,000 to $249,999: $300 bonus
• Deposit $250,000 or more: $625 bonus

Your bonus will be determined on Day 45. You must maintain your new funds for 90 days, after which J.P. Morgan Investing will deposit the bonus directly into your account within 15 days.

Available Self-Directed Investment Products

J.P. Morgan Self-Directed Investing offers access to four investment products:

• Stocks. J.P. Morgan Self-Directed Investing customers can execute commission-free online stock trades in U.S.-listed and over-the-counter stocks priced at $5 per share and over. You can’t buy exchange-listed or over-the-counter stocks priced at under $5 per share.
• ETFs. J.P. Morgan Self-Directed Investing offers access to dozens of U.S.-listed ETFs, covering a range of sectors, asset classes, indexes, and investing objectives. These instruments generally carry expenses and fees that J.P. Morgan can’t control.
• Mutual Funds. J.P. Morgan Self-Directed Investing offers access to mutual funds with and without transaction fees. Like ETFs, mutual funds may carry expenses and fees that J.P. Morgan can’t control.
• Fixed Income. J.P. Morgan Self-Directed Investing’s fixed-income products include government and corporate bonds.
• Options. Subject to approval, J.P. Morgan Self-Directed Investing offers options trading.

J.P. Morgan Self-Directed Investing doesn’t offer access to alternative investment products like commodities, cryptocurrencies, or forex.

Portfolio Builder for Self-Directed Clients

If you’re not sure where to begin your investing journey, use J.P. Morgan’s Portfolio Builder tool to get started. Included free with J.P. Morgan Self-Directed Investing, it’s a helpful automated assistant that can help you design your own asset allocation strategy and place trades on your behalf.

J.P. Morgan Automated Investing

J.P. Morgan Automated Investing is J.P. Morgan’s managed investing account option. For a flat advisory fee of 0.35% of assets under management, J.P. Morgan’s algorithm-driven robo-advisor software builds and manages diversified portfolios based on your objectives and risk tolerance.

J.P. Morgan Automated Investing starts by asking you a few basic questions about your time horizon, investing goals, and risk tolerance. It then creates the semi-customized asset allocation that best fits your answers, and it periodically rebalances the portfolio as market moves erode the initial allocation.

J.P. Morgan Automated Investing accounts only include stocks and ETFs. You can’t add mutual funds or fixed-income instruments here. However, some ETFs may be composed largely or entirely of fixed-income instruments or track fixed-income indexes.

J.P. Morgan Automated Investing requires a minimum opening account balance of $500.

Advantages of J.P. Morgan Investing

Here’s why J.P. Morgan Investing might be right for you:

1. No Need to Have an Existing Chase Bank Account. Anyone can open a J.P. Morgan account. You don’t need to be an existing Chase Bank or credit card customer, or have any existing Chase accounts, to get started.
2. No Commissions for Self-Directed Stock or ETF Trades. All J.P. Morgan Self-Directed Investing clients qualify for unlimited free stock and ETF trades, resulting in extremely low costs for self-directed investing. Options are commission-free as well, though a $0.65 fee per contract does apply.
3. No Minimum to Open or Maintain a J.P. Morgan Self-Directed Investing Account. There’s no minimum deposit required for a new J.P. Morgan Self-Directed Investing account. There’s also no minimum balance requirement moving forward. Both are great news for first-time investors without much starting capital.
4. Reasonable Management Fees for J.P. Morgan Automated Investing. J.P. Morgan Automated Investing charges a flat annual management fee: 0.35% of assets under management, regardless of portfolio size or allocation. That’s in line with other highly ranked automated investing platforms and significantly lower than the cost of a full-service human investment manager.
5. Multiple Joint Account Types. J.P. Morgan offers three different types of joint accounts, including a tenants-in-common structure designed for unrelated or uncoupled account holders who don’t want their fellow owners to inherit their share of the account at their death.
6. IRAs Available. J.P. Morgan offers traditional and Roth IRAs, making it a great place to kickstart your retirement investing plans.

Disadvantages of J.P. Morgan Investing

Consider these disadvantages before opening a J.P. Morgan Investing account:

1. No Tier Discounts for Higher-Asset Portfolios Accounts. Unlike some automated investment management platforms and most full-service human advisors, J.P. Morgan Automated Investing doesn’t offer tier discounts for higher-asset accounts. Since this vertical’s standard fee isn’t outrageous, that isn’t a dealbreaker, but it would be nice for clients with the means to bring substantial investable assets to the table to get a break for doing so. J.P. Morgan does offer asset management solutions for higher-net-worth clients, but many younger investors don’t meet the hefty asset minimums.
2. Limited Guidance From Human Investment Professionals. Neither J.P. Morgan Self-Directed Investing nor J.P. Morgan Automated Investing offer a fully managed investment option that puts human financial advisors and wealth managers at customers’ beck and call. For self-directed investors, that’s probably not an issue, but more hands-off investors might well prefer the security that comes with a human backstop.

How J.P. Morgan Investing Stacks Up

J.P. Morgan Investing is just one of several online brokerages that pair a self-directed trading platform with a managed investments option. Here’s how it stacks up against a close competitor, Ally Invest.

Final Word

J.P. Morgan Self-Directed Investing (formerly You Invest by J.P. Morgan) is a versatile, low-frills platform for self-directed investors, hands-off types, and those seeking a blend of professional guidance and DIY flexibility. With unusually low commissions and reasonable management fees, it’s a strong choice for price-sensitive investors, too.

The groups that aren’t so well-served by J.P. Morgan are sophisticated investors and high-frequency day traders, who simply won’t find the sorts of execution-oriented tools they need to practice their craft effectively.

INVESTMENT AND INSURANCE PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE