Zacks Advantage - Detailed Review
Finance Tools
Zacks Advantage - Product Overview
Introduction to Zacks Advantage
Zacks Advantage is an online investment advisory service offered by Zacks Investment Management, a firm with nearly 30 years of experience in wealth management for institutions and high-net-worth individuals.
Primary Function
The primary function of Zacks Advantage is to provide an actively managed, performance-driven investment platform. It automatically builds, monitors, and rebalances clients’ portfolios using a combination of automated models and the expertise of experienced financial professionals from Zacks Investment Management.
Target Audience
Zacks Advantage is targeted at individuals and investors seeking professional wealth management services but at a lower cost than traditional financial advisors. This includes a broad range of investors, from those with moderate to aggressive risk tolerance, who are looking for a simplified and cost-effective way to manage their investments.
Key Features
Active Management and Automation
Zacks Advantage combines the benefits of active management with the efficiency of automated investing. Portfolios are reviewed and monitored monthly by the Zacks Advantage Investment Committee, ensuring continuous optimization.
Low Fees
The service offers significantly lower management fees compared to traditional advisors, starting as low as 0.35% for accounts above $100,000. Additionally, the Zacks Advantage Pledge refunds 100% of management fees if an investor is unsatisfied within the first year.
Proprietary Forecast Model
Zacks Advantage uses a proprietary 10-year forecasting model, derived from academic and proprietary research, to create broadly diversified portfolios of ETFs that align with an investor’s needs and risk tolerance.
Simplified Platform
The onboarding process is straightforward, requiring investors to answer a few basic questions about their investment preferences and goals. This leads to the creation of a custom-designed portfolio with ongoing access to track performance, rebalancing, and tax-loss harvesting activity.
Asset Allocation
The platform employs mean variance optimization to allocate assets, seeking the highest expected return for a given level of risk. This approach includes a diverse range of asset classes such as US and international stocks, bonds, and other investments.
Investor Engagement
Investors have access to exclusive monthly analyst calls by the investment committee members, providing transparency and insights into their portfolio management.
By combining advanced technology, expert oversight, and a user-friendly interface, Zacks Advantage aims to provide investors with a high-performance, low-cost investment solution.
Zacks Advantage - User Interface and Experience
User Interface of Zacks Advantage
The user interface of Zacks Advantage is crafted to be user-friendly and accessible, particularly for those who may not be seasoned investors.
Ease of Use
Zacks Advantage scores high in terms of ease of use. The process begins with a simple sign-up procedure where users answer a few basic questions to define their investment goals and preferences. This initial step helps the platform create a customized investment portfolio that aligns with the user’s risk tolerance and financial objectives.
User Interface
The interface is intuitive and straightforward. Once users have set up their accounts, they can easily view and manage their portfolios. The platform provides clear and concise information, including the current allocations between equity, fixed income, and commodities. These allocations are adjusted monthly based on Zacks Investment Management’s proprietary risk analysis and market projections.
Portfolio Management
Users can monitor their portfolios in real-time, with the platform offering continuous rebalancing and automatic tax loss harvesting for accounts worth $50,000 or more. This feature helps in optimizing the portfolio’s performance and minimizing tax liabilities.
Support and Resources
Zacks Advantage also offers extensive client support. Users have access to unlimited calls with Certified Financial Planners (CFPs), which can be particularly helpful for those who need guidance on their investment strategies or have questions about their portfolios.
Overall User Experience
The overall user experience is streamlined and efficient. The platform combines automated ETF-based investment options with active management, making it easy for users to keep track of their investments without needing to be experts themselves. The monthly adjustments to the portfolio ensure that the investments remain aligned with the user’s goals and risk tolerance, providing a sense of security and confidence in the investment process.
Conclusion
In summary, Zacks Advantage is designed to be easy to use, even for those new to investing. Its clear interface, automated portfolio management, and strong client support make it an appealing option for investors seeking a managed investment solution.
Zacks Advantage - Key Features and Functionality
Zacks Advantage Overview
Zacks Advantage is an actively managed, performance-driven online investment platform that integrates advanced technology and expert financial management to help investors achieve their financial goals. Here are the key features and how they work:Active Portfolio Management
Zacks Advantage is led by a team of experienced financial experts from Zacks Investment Management. This team actively manages and monitors portfolios, using a hybrid model that combines automated investing with human oversight. The Zacks Advantage Investment Committee reviews and rebalances portfolios on a monthly basis to capitalize on market opportunities and manage risk.Institutional Intelligent Portfolios™
The platform uses Institutional Intelligent Portfolios™, a technology that helps in creating efficient and risk-managed portfolios. This technology is part of the asset allocation methodology that Zacks Advantage employs to optimize portfolio performance. For a deeper technical analysis, investors can refer to the white paper titled “The Zacks Advantage Approach to Automated Index Investing”.Low Fees
Zacks Advantage offers lower management fees compared to traditional financial advisors. Fees start as low as 0.35 percent for accounts above $100,000. Additionally, the Zacks Advantage Pledge ensures that investors who are unsatisfied with their investment advisory experience in the first year can receive a full refund of their management fees.Simplified Onboarding and Platform
The platform is user-friendly, with a simplified onboarding process. Investors sign up and answer a few basic questions about their investment preferences and goals. Based on this information, a custom-designed portfolio is created, providing a complete breakdown of investments, including ETFs, asset classes, and allocation. Investors have ongoing access to their portfolio to track performance, rebalancing, and tax-loss harvesting activity.AI Integration
While the primary management is handled by human experts, the platform leverages automated models to optimize portfolio performance. These models are risk-delineated and automated, allowing for efficient capitalization on market opportunities. The integration of AI in these models helps in continuous monitoring and adjustments to ensure the portfolios remain aligned with the investors’ goals and risk tolerance.Monthly Investor Analyst Calls
Zacks Advantage provides exclusive monthly investor analyst calls conducted by members of the investment committee. This allows investors to stay informed about their portfolio performance and market insights directly from the experts managing their investments.Transparency and Access
Investors have complete access to their portfolios and funds at all times. This transparency ensures that investors can track their investments, performance, and any changes made to their portfolios in real-time.Conclusion
In summary, Zacks Advantage combines the benefits of active management by experienced financial experts with the efficiency of automated models, all while keeping fees low and providing a user-friendly platform for investors to manage their portfolios effectively. Zacks Advantage - Performance and Accuracy
Evaluating Zacks Advantage
Evaluating the performance and accuracy of Zacks Advantage, a robo-advisor that combines automated index investing with active management, involves looking at several key aspects.
Performance
Zacks Advantage has demonstrated strong performance in various market conditions. In the fourth quarter of 2018, it was ranked as the top performer for Equity Portfolio and second best for Total Portfolio among 26 of the largest robo-advisors, according to The Robo Report by Backend Benchmarking.
This performance is notable because it occurred during both a bull market in Q3 2018 and a bear market correction in Q4 2018, indicating that Zacks Advantage’s active management approach can adapt to varying market conditions. The platform’s use of a proprietary 10-year forecasting model and adaptive asset allocation helps in managing risk and optimizing returns.
Accuracy and Methodology
Zacks Advantage employs a research-driven approach to asset allocation, leveraging over 30 years of investment management experience. The platform uses efficiently constructed, low-cost ETFs that correspond to key asset classes and actively manages the portfolio based on quantitative and qualitative models. This approach aims to create a diversified portfolio that matches the investor’s risk profile and investment objectives.
The accuracy of Zacks Advantage’s methodology is supported by its consistent rankings and performance metrics. The platform’s ability to adjust holdings based on changing economic or market conditions, which is typically beyond the capabilities of standard robo-advisors, adds a layer of human expertise that enhances its accuracy.
Limitations and Areas for Improvement
While Zacks Advantage has shown strong performance, there are some limitations and areas to consider:
- Past Performance: As with any investment, past performance is no guarantee of future results. Market conditions can change, and what worked in the past may not work in the future.
- Fees and Costs: Although Zacks Advantage emphasizes low fees, it is crucial to compare these fees with other robo-advisors and traditional investment options. Research suggests that fees are a significant driver of underperformance, so keeping costs low is essential.
- Dependence on Models: The platform relies heavily on proprietary forecasting models and algorithms. While these models have been effective, there is always a risk that they may not perform as well in unforeseen market conditions.
- Human Oversight: While the addition of human expertise is a strength, it also means that the platform is not entirely automated. This could introduce potential biases or errors if the human input is not consistently accurate.
Engagement and User Experience
Zacks Advantage aims to make investing more accessible and less intimidating. The platform provides clear and transparent performance metrics, which helps in building trust with investors. The user can download an Overview Guide to learn more about how the platform works, which enhances engagement and transparency.
In summary, Zacks Advantage has a strong track record of performance and uses a well-defined methodology to manage portfolios. However, it is important for investors to be aware of the potential limitations, such as the unpredictability of future market conditions and the reliance on proprietary models. Overall, the platform offers a balanced approach to automated index investing with the added value of active management.
Zacks Advantage - Pricing and Plans
The Pricing Structure of Zacks Advantage
The pricing structure of Zacks Advantage is structured around the amount of assets managed, with varying fee rates for different investment tiers. Here’s a breakdown of the pricing and the features associated with each tier:
Fee Structure
- $25,000 to $99,999: The management fee for this tier is 0.70% of the assets managed.
- $100,000 to $249,999: For accounts in this range, the management fee drops to 0.50%.
- $250,000 and above: The lowest fee rate of 0.35% applies to accounts with $250,000 or more in assets.
Features Available in Each Plan
- All Tiers:
- Active Management: Portfolios are actively managed by the experienced Zacks Investment Management team, using proprietary models and risk analysis to adjust asset allocations monthly.
- Automated Rebalancing: Continuous rebalancing to ensure the portfolio remains aligned with the investor’s risk tolerance and investment goals.
- Tax Loss Harvesting: Available for accounts worth $50,000 and above, this feature helps minimize tax liabilities.
- Diversified Portfolios: Access to a wide range of investment categories, including growth and income, inflation and defensive assets, such as preferred stocks, international bonds, and floating-rate notes.
- Monthly Investor Analyst Calls: Exclusive calls with the investment committee members are available for all Zacks Advantage investors.
Additional Incentives
- Zacks Advantage Pledge: Investors who are unhappy with the service in the first year can receive a 100% refund of the management fees.
Minimum Deposit
- The minimum deposit required to start using Zacks Advantage is $25,000, which is relatively high compared to other robo-advisors but reflects the platform’s focus on high-net-worth investors.
There are no free options available for using Zacks Advantage, as the service is fee-based and requires a significant initial investment. However, the fees are lower than those typically charged by traditional financial advisors, especially for larger accounts.
Zacks Advantage - Integration and Compatibility
Integration with Technology and Platforms
Zacks Advantage is built on a technology platform that was developed in collaboration with Charles Schwab, which ensures a seamless integration with the necessary financial tools and systems. This platform leverages Institutional Intelligent Portfolios™, which are part of Zacks Investment Management’s broader asset management approach. This integration allows for automated index investing, portfolio rebalancing, and other advanced investment management functions.
Compatibility Across Devices
Zacks Advantage offers a user-friendly and accessible platform that can be managed from various devices. Here’s how it works across different platforms:
- Web Platform: Investors can manage their portfolios, track performance, and adjust settings through the Zacks Advantage website. The platform is simplified and easy to use, providing a complete breakdown of investments, asset classes, and allocation.
- No Specific Mobile App: While there isn’t a dedicated Zacks Advantage mobile app, the web platform is likely optimized for mobile access, allowing users to manage their accounts on the go. However, for more comprehensive mobile trading, users might need to rely on other Zacks Trade platforms, such as the Zacks Trade app, which is designed for general trading activities.
Integration with Other Zacks Tools
Zacks Advantage is part of the broader Zacks Investment Management ecosystem, which means it can benefit from other tools and services offered by Zacks. For example:
- Zacks Trade Platforms: While Zacks Advantage itself does not have specific integration details with Zacks Trade Pro or other trading platforms, the overall Zacks ecosystem allows for compatibility with various trading tools. Zacks Trade Pro, for instance, offers advanced trading features that could complement the investment management services of Zacks Advantage.
Fee Structure and Client Access
The platform is designed to be accessible with low fees, starting at 0.35% for accounts above $100,000. This fee structure, along with the ease of use and ongoing access to portfolio management, makes it a viable option for those seeking both active management and the convenience of a robo-advisor.
Conclusion
In summary, Zacks Advantage integrates well with the technological infrastructure provided by Charles Schwab and leverages the expertise of Zacks Investment Management. While it may not have a dedicated mobile app, it is accessible via web platforms and can be used in conjunction with other Zacks trading tools for a comprehensive investment experience.
Zacks Advantage - Customer Support and Resources
Zacks Advantage Customer Support
Zacks Advantage offers several customer support options and additional resources to ensure users have a seamless and informed experience with their finance tools.
Customer Support
For any questions or issues, you can contact Zacks Advantage customer support in the following ways:
- Phone: You can reach them at 888-989-2257, available Monday through Friday from 9am to 6pm Central Time (CT).
- Email: While the specific email for Zacks Advantage support is not listed, you can contact the broader Zacks Investment Research support at support@zacks.com for general inquiries.
Institutional Intelligent Portfolios Support
If you are using the Institutional Intelligent Portfolios, you can contact their dedicated support at 877-805-3399, available Monday through Friday from 8am to 11pm Eastern Time (ET).
Contact Information
For more direct inquiries, you can also reach out to Noah Rife, the Vice President of Zacks Advantage, at nrife@zacks.com or by calling 312-964-8334.
Additional Resources
- How It Works: Zacks Advantage provides a detailed explanation of their investment approach and the process of setting up a custom-designed portfolio through a 3-minute video and an overview guide. This helps users understand the active portfolio management and automated index investing methodologies.
- White Paper: For a more in-depth, technical analysis, you can download the white paper titled “The Zacks Advantage Approach to Automated Index Investing.”
- Monthly Investor Analyst Calls: Zacks Advantage offers exclusive monthly investor analyst calls conducted by members of the Zacks Investment Committee, providing insights and updates on portfolio performance.
- Simplified Platform: The platform is designed to be easy to use, with a simplified onboarding process that guides users through defining their investment preferences and goals to create a custom-designed portfolio.
These resources and support options are aimed at ensuring that users have all the necessary information and assistance to manage their investments effectively with Zacks Advantage.
Zacks Advantage - Pros and Cons
Advantages of Zacks Advantage
Active Management and Expertise
Zacks Advantage stands out with its active management approach, combining the benefits of a robo advisor with the expertise of Zacks Investment Management, a firm with over 45 years of experience and $3 billion under active management. This active management involves monthly adjustments to portfolio allocations based on risk analysis and projections, which can be particularly appealing to high-net-worth investors.
Customized Portfolios
The platform creates customized portfolios using Institutional Intelligent Portfolios™ technology, which helps in achieving specific investment goals and managing risk effectively. This personalized approach ensures that the portfolio is adjusted regularly to align with the investor’s risk tolerance and goals.
Low Fees for High Net Worth Investors
While the minimum deposit is $25,000, which is high, the fees are competitive for larger investment amounts. For example, the management fee drops to 0.50% for investments between $100,000 and $249,999, and to 0.35% for investments of $250,000 or more. This makes it an attractive option for high-net-worth investors.
Tax Efficiency and Rebalancing
Zacks Advantage offers automatic tax loss harvesting for accounts worth more than $50,000, which can help in minimizing tax liabilities. The platform also provides continuous rebalancing to ensure the portfolio remains aligned with the investor’s goals and risk tolerance.
Client Satisfaction Guarantee
The “Advantage Pledge” offers a 100% refund of the management fees in the first year if the investor is unhappy with the service, which adds a layer of confidence for new users.
Disadvantages of Zacks Advantage
High Minimum Deposit
The minimum deposit requirement of $25,000 is significantly higher than many other robo advisors, making it inaccessible to investors with smaller investment amounts.
High Fees for Lower Investment Amounts
For investments between $25,000 and $99,999, the management fee is 0.70%, which is relatively high compared to other robo advisors. This makes it less competitive for investors with lower investment amounts.
Limited Suitability for Lower Net Worth Investors
Due to the high minimum deposit and higher fees for smaller investments, Zacks Advantage is not the best solution for lower net worth investors. Other platforms like Wealthfront, Betterment, or Vanguard PAS might be more suitable for these investors.
Dependence on Active Management
While the active management approach can be a strength, it may also mean that the platform’s performance is more dependent on the expertise and decisions of the Zacks Investment Management team, which could be a risk if their strategies do not perform well.
In summary, Zacks Advantage is a strong option for high-net-worth investors who value active management and are willing to invest significant amounts. However, it may not be the best fit for investors with smaller budgets due to its high minimum deposit and fees for lower investment amounts.
Zacks Advantage - Comparison with Competitors
When comparing Zacks Advantage to other AI-driven finance tools and robo-advisors
Several unique features and distinctions become apparent.Active Management and Expert Oversight
Zacks Advantage stands out for its active management approach, which is a blend of automated processes and expert oversight. The platform is managed by an experienced team from Zacks Investment Management, who use a proprietary 10-year forecasting model and monthly risk analysis to adjust portfolio allocations. This active management is a key differentiator, as most robo-advisors rely solely on automated algorithms.Proprietary ETF Ranking System
Zacks Advantage employs the Zacks Investment Research ETF Ranking System, which evaluates ETFs based on fundamental, technical, and cost considerations. This system helps in selecting the best-performing ETFs across various asset categories, adding a layer of sophistication to the portfolio selection process.Tax-Loss Harvesting
Zacks Advantage offers automatic tax-loss harvesting for accounts over $50,000, which is a valuable feature for minimizing tax liabilities. This service is particularly beneficial for high-net-worth investors who can significantly reduce their tax burden through this strategy.Low Fees
Compared to traditional financial advisors, Zacks Advantage charges significantly lower fees, starting at 0.35% for accounts above $100,000. This makes it an attractive option for those seeking cost-effective wealth management.Diversified Portfolios
The platform offers a wide range of investment categories, including growth, income, inflation, and defensive assets. This diversity includes asset classes such as preferred stocks, international bonds, and floating-rate notes, which may not be commonly found in other robo-advisory services.User-Friendly Interface
Zacks Advantage is known for its ease of use, with a simplified onboarding process and ongoing access to portfolio tracking. This makes it accessible even for those who are not highly experienced in investment management.Alternatives and Comparisons
Betterment and Wealthfront
These robo-advisors also offer automated investment services but typically lack the active management component that Zacks Advantage provides. They often rely more on passive investment strategies and may not have the same level of expert oversight.Personal Capital
Personal Capital offers financial management tools and investment advice, but it does not provide the same level of active management as Zacks Advantage. Personal Capital is more focused on financial planning and tracking rather than active portfolio management.Schwab Intelligent Portfolios
Schwab Intelligent Portfolios is another robo-advisor that offers automated investment management. However, it does not include the active management and proprietary forecasting models that are central to Zacks Advantage. Schwab’s service is generally more passive in nature.Conclusion
In summary, Zacks Advantage combines the benefits of low fees and advanced technology with the expertise of active management, making it a unique offering in the robo-advisor space. Its proprietary ETF ranking system, automatic tax-loss harvesting, and diversified portfolio options further set it apart from competitors. While other robo-advisors may offer similar services, the active management and expert oversight at Zacks Advantage make it particularly appealing to high-net-worth investors seeking a more hands-on approach to their investments. Zacks Advantage - Frequently Asked Questions
Here are some frequently asked questions about Zacks Advantage, along with detailed responses:
What is Zacks Advantage and who is it for?
Zacks Advantage is an actively managed, performance-driven online investment platform offered by Zacks Investment Management. It is primarily geared towards high-net-worth individuals who prefer active management over full automation. However, it can also serve newer investors with a minimum of $25,000 to invest.
What are the fees associated with Zacks Advantage?
The fees for Zacks Advantage vary based on the amount invested:
- For accounts between $25,000 and $99,999, the management fee is 0.70%.
- For accounts between $100,000 and $249,999, the fee is 0.50%.
- For accounts of $250,000 or more, the fee is 0.35%.
Additionally, Zacks Advantage offers a pledge where you can receive a 100% refund of the management fees in the first year if you are unhappy with the service.
What is the minimum deposit required for Zacks Advantage?
The minimum deposit required to start using Zacks Advantage is $25,000. This is relatively high compared to other robo-advisors, reflecting the platform’s focus on higher net worth investors.
How does Zacks Advantage manage portfolios?
Zacks Advantage uses an active management approach, where portfolios are reviewed and adjusted monthly by the Zacks Investment Management team. The platform employs a proprietary adaptive 10-year forecasting model and a quantitative ETF selection process to optimize portfolio performance. Portfolios are also continuously rebalanced to align with the investor’s risk tolerance and investment goals.
What types of investment categories and asset classes are offered?
Zacks Advantage offers a diverse range of investment categories, including growth and income, inflation, and defensive assets. The asset classes include US large and small company stocks, international developed and emerging markets stocks, preferred stocks, international bonds, and floating-rate notes. This diversification helps in mitigating downside risk and optimizing returns.
Does Zacks Advantage offer tax loss harvesting?
Yes, Zacks Advantage offers automatic tax loss harvesting for accounts worth $50,000 or more. This feature helps in minimizing tax liabilities by offsetting gains with losses.
How easy is it to use Zacks Advantage?
The platform is designed to be user-friendly. The onboarding process involves signing up and answering a few basic questions to define your investment goals and preferences. After this, the platform creates a custom-designed portfolio and continuously monitors and rebalances it according to your risk tolerance and goals.
What kind of support does Zacks Advantage provide to its investors?
Zacks Advantage provides regular portfolio reviews and monitoring by the Zacks Investment Management team. Investors also have access to exclusive monthly investor analyst calls by the investment committee members. This ensures that investors are well-informed and supported throughout their investment journey.
Is there a guarantee or refund policy if I’m not satisfied with the service?
Yes, Zacks Advantage offers the Zacks Advantage Pledge, which allows you to receive a 100% refund of the management fees in the first year if you are unhappy with the investment services provided.
How does Zacks Advantage compare to other robo-advisors?
Zacks Advantage is distinct from other robo-advisors due to its active management approach and higher minimum deposit requirement. While it is more expensive for lower investment amounts, it offers specialized services and expertise that are particularly beneficial for high-net-worth investors. For lower net worth investors, other options like Wealthfront, Betterment, or Vanguard PAS might be more cost-effective.