These days there are plenty of automated investment platforms to choose from. And while each robo-advisor is working hard to separate itself from the pack, the truth is the differences between them are slight. The typical robo-advisor boasts about their unique investing methodology that allows them to build an optimized portfolio of ETFs based on your risk tolerance and investment timeline. Aside from different fee structures and add-on services, the nuts and bolts are pretty much the same across the board.
A relative newcomer to the robo-advisor scene, Emperor Investments, actually is doing something different.
Emperor sets itself apart from other robo-advisors with its automated equity investing strategy that is designed to help you achieve your financial goals.
Sounds complicated, right? Don’t worry we’ll explain how it works.
What is Emperor Investments?
Launched in 2018, Emperor Investments is a robo-advisor. Emperor was founded by Brenna Casserly, a former investment analyst and Dr. Francis Tapon, an economics professor at the University of Guelph. The two of them perfected Emperor’s unique approach to investing over the past ten years.
What makes Emperor’s investing strategy unique?
Unlike most other robo-advisors, Emperor doesn’t invest in ETFs. Instead, Emperor builds a diversified portfolio of dividend-paying stocks to help you reach your financial goals. This is what Emperor refers to as pure-equity investing.
What Is Pure-Equity Investing?
With Emperor Investments, your investment portfolio will consist of individual dividend paying stocks. No mutual funds. No ETFs.
By focusing on individual stocks, Emperor targets the financial asset class that offers the greatest long-term growth potential. And by narrowing its stock picks to only dividend paying companies, Emperor gives you the option of receiving dividends in cash or automatically reinvesting the proceeds.
This strategy is designed to provide investors steady income while creating an opportunity for super-charged results with low volatility.
What is Emperor’s Investment Strategy?
Emperor believes that the best approach to building your portfolio is with a blend of technology and human expertise. Emperor’s portfolio management methodology is mixture of passive and active investing. That is, Emperor actively selects individuals stocks but uses a passive algorithm to make those picks.
Here’s what Emperor’s two-step approach looks like:
Step 1. Emperor’s proprietary technology identifies companies that:
- Pay dividends year after year
- Are likely to continue paying dividends
- Can be purchased at a fair price
Step 2. Emperor’s experts take an even closer look to find companies that:
- Have a compelling value proposition
- Have a strong competitive advantage
- Feature a high-quality management team
The end result: a portfolio of stocks that Emperor calls the “Dream Team” of companies.
Emperor Investments Fees and Minimum Balance Requirements
Emperor Investments charges a flat annual fee of 0.60%.
At first glance, that might seem high. After all, robo-advisor competitors such as Wealthfront, Betterment or Wealthsimple each have lower account management fees. Keep in mind, however, that your Emperor portfolio is exclusively dividend-paying stocks. That means you won’t pay any of the fees that come with holding ETFs. So, unlike other robo-advisors, Emperor’s investing strategy ensures that you won’t incur any additional fees on top of 0.60% annual fee.
Additionally, Emperor doesn’t charge any fees to withdraw funds or to close your account. Nothing but the 0.60% annual management fee.
Emperor also requires a $500 minimum deposit. Emperor’s minimum balance requirement is higher than you’ll find with Betterment or Wealthsimple (neither requires a minimum deposit). This can be a turn off for new investors, but it doesn’t set an unreasonably high barrier to entry.
Do you have a financial goal that you’re working toward? Whether you’re working toward retirement or becoming a homeowner, Emperor gives you the tools to create goals for your money.
In fact, you can create multiple unique goals with different timelines and risk levels. And you can adjust your inputs to see how different factors can affect the timeline for achieving your goal.
Based on your preferences, Emperor will create a personalized portfolio for each of your goals and invest your funds accordingly. On top of that, Emperor makes it easy to track your progress, so you can see where you stand at any time.
Does Emperor’s Equity Investing Strategy Deliver Returns?
Even though Emperor only introduced their investing platform mid-2018, they’ve actually been refining their pure-equity investing strategy for over 10 years. According to Emperor, they have forward tested (i.e., tested in real-time using paper-trading) their portfolios and have historically outperformed the S&P 500. These results are due in part to the way dividend payment supplement your portfolio’s earning, helping you build wealth even faster.
Is Emperor Investments Safe?
Emperor uses bank-level security to safeguard your account and personal information. In addition, your funds are insured up to the maximum limit ($500k) by the Securities Investor Protection Corporation (SIPC).
Getting Started with Emperor Investments
Currently, Emperor Investments is only accessible via their website. They plan on releasing a mobile app in the future, but for now their website is optimized for use on most mobile devices. Getting started with Emperor is simple:
- Begin by answering Emperor’s detailed investment questionnaire. Emperor uses this information to get a better sense of your investment preferences and to determine your appropriate investing “Risk Level” and portfolio allocation.
- Next, you’ll provide personal information and verify your identity.
- Select your account type. Choose from an Individual Taxable Account, Traditional IRA, or Roth IRA.
- Link your Bank Account.
- Once you have completed these steps, you can create your first goal! Emperor will use your answers from the questionnaire and the details of your goal to build you a portfolio tailored to your needs.
If you sign up for Emperor Investments today, Emperor will manage your portfolio free of charge for your first six months!
Pure-Equity Portfolios. Your entire portfolio is comprised of dividend paying stocks that are tailored to your goals.
- Dividend Reinvesting. Emperor automatically reinvests your dividend earnings, which will boost your returns over time.
- No Hidden Fees. By investing solely in dividend paying stocks, you’ll avoid ETF management fees.
- Affordable Initial Investment. You can get started with an initial deposit of only $500. Plus, Emperor will manage your portfolio for free for the first 6 months!
Annual Fee. With a 0.6% annual fee, you’ll pay a premium for the pure-equity investing feature.
- Limited Track Record. Emperor just launched in 2018, so the viability of their product and investment strategy remains to be seen.
- No Mobile App. Not being able to access your account from a mobile device is frustrating, but there’s no doubt that Emperor will launch a mobile app down the road.
Is Emperor Investments Right for You?
There is always a risk when it comes to investing in the stock market. It seems logical to assume that your risks multiply by using a new investing platform to put your hard-earned money into the market. The thing is, despite the fact that Emperor only unveiled its services recently, they’ve been honing their craft for over a decade. And, according to Emperor’s calculations, they’ve achieved tremendous results.
There’s a reason that tried and true robo-advisors like Wealthfront, Betterment, and Wealthsimple are market leaders. But Emperor believes that they belong in the same class because of their historical investment performance. Despite the fact that Emperor pure-equity investing strategy is relatively unproven, Emperor is still a viable option for anyone interested in investing in dividend-paying companies but not sure where to start. Without a doubt, Emperor is breaking into new territory and is a robo-advisor we’ll be keeping an eye on.