You Invest Review
You Invest is one of the products and services offered by J.P. Morgan to help investors reach their goals. Hence, the name – You Invest by J.P. Morgan. While this is the online investing arm of J.P. Morgan, it is different from the planning and investing arm at J.P. Morgan, which also relies on online investing.
The main difference between the two is that You Invest funds are NOT FDIC insured, for instance. Or, that the You Invest is a cheaper way to invest in financial markets.
Nevertheless, it is a smart marketing move by J.P. Morgan, forced to act as competition for the new generation of young traders intensified. Why not offering a product bearing the name of one of the most prestigious banking dynasties in history?
On You Invest Secure Website
How You Invest Works?
The house of Morgan has deep roots in the international financial system. You Invest by J.P. Morgan is just that – the low-cost arm of J.P. Morgan. One cannot differentiate between the two, despite the huge difference between the products offered. As an example, consider Lufthansa, the European airline. One of the largest airlines in the world, it has a low-cost business called Eurowings.
While belonging to the same group, it offers similar, but not identical products. Yet, many travelers choose Eurowings for the simple fact that its name is associated with Lufthansa. And, for the cheaper airline ticket prices, of course.
The same goes here. Customers come to the You Invest attracted by the J.P. Morgan name. While aiming for low-cost transactions and a limited investing offering, they feel safer knowing that the J.P. Morgan’s expertise is behind You Invest. After all, the two entities share the same customer service and educational material.
All in all, this is one of the best brokerage houses tackling the new generation of traders. Born out of the desire to compete with rising stars like Robinhood, You Invest comes with J.P. Morgan’s expertise and knowledge in the brokerage industry.
Even among its own competitors, You Invest stands out. For instance, it has a strong social media presence and a simple pricing and product structure.
No one knows for sure what the future will bring. But one thing we do know – the new generation of traders, be it millennials, generation X or Z, lack the resources needed to invest in financial markets by using a traditional brokerage house. After all, they all live the second major economic crisis in a little bit more than a decade.
If anything, You Invest shows how far J.P. Morgan is willing to go. I would say it is just testing waters for now. But it shows that a big, traditional brokerage house, running a huge business, can become extremely flexible when it comes to entering a new market and gaining share from it.
Expect more from the You Invest in the future.
You Invest does not offer all the products available at the J.P. Morgan planning and investing arm but does offer more products than You Invest’s competitors (Acorns, Webull, Sofi Invest).
|Stocks||Unlimited commission-free online stocks|
|ETFs||Zero commissions for ETFs trading|
|Options||$0 minimum to start option trading|
|Mutual Funds||Invest as little as $1 in mutual funds with no transaction fees|
Like any other broker, there are pros & cons for investors/traders. Here are the main benefits and drawbacks you should know before applying:
J.P. Morgan is viewed as one of the most successful banking houses in the world. With roots in the British society in the 1800s and with the charismatic John Pierpont Morgan leading the Wall Street during the Great Depression years, J.P. Morgan won international respect and recognition.
By associating the brand name to You Invest, its low-cost investing arm, J.P. Morgan makes a smart move in attracting new investors. They come, see, test at little or no cost the market, and if and when they are ready to make the next step, J.P. Morgan is there to provide assistance and guidance.
A short and professional video presentation introduces the customer to the trading app’s capabilities and so the customer forms an idea about what to expect. Presented in a simple way, it makes investing look easy – more precisely, the process of buying and selling, not the actual performance.
You Invest offer only two products – You Invest Trade and You Invest Portfolio.
Furthermore, it makes it clear from the start what the two stand for.
The first option let us you do the trading, the second one is a robo-advisory service that You Invest charges a fee for. Simple structure, effective communication, no mambo jumbo.
You Invest is designed for the new generation of traders and it knows where to go to get them try the product. As such, it comes as no surprise to see a strong online presence on the social media outlets. From Twitter to Pinterest.
Another smart move from J.P. Morgan – it let us the You Invest customers to access educational material from the traditional investing arm. It makes sense, because this is yet another way to attract new clients on the business that pays commissions and represents the main revenue stream.
Moreover, only for getting access to the education content it is worth opening a You Invest trading account.
Investment products ran through the You Invest program are not insured. Not by the FDIC nor by any federal government agency. Moreover, the customer is warned from the start that any funds are not guaranteed by J.P. Morgan Chase bank or by any affiliates.
In other words, by using the You Invest program the customer takes all the risks. However, if the customer wants to benefit from protection, it is politely invited to open a regular account with J.P. Morgan
Most likely You Invest customers direct their questions and inquiries to Chase for an answer to their You Invest questions. However, it should be clear from the start as there is no reference if this is correct or not.
Despite not asking for a minimum investment for You Invest Trade, there is a minimum $500 investment requirement to be eligible for the opening of a You Invest Portfolio account.
This comes in sharp contradiction with what the entire You Invest concept stands for – low or no transaction costs, limited fees, with the aim of attracting new clients and channeling them via more lucrative products under the J.P. Morgan umbrella.
You Invest makes it easy and straightforward to customers wondering what type of account to open. Two options exist:
1. You Invest Trade, with the possibility to choose from:
- Traditional IRA
- Roth IRS
2. You Invest Portfolio: Robo-advisory services offered by You Invest
By choosing the You Invest Trade, you know from the start that you are in charge with trading and managing your portfolio. After all, the name says it all.
By choosing the You Invest Portfolio, you can access portfolios built using J.P. Morgan ETFs and designed for various risk types. For these, You Invest charges an advisory fee, and there is a minimum amount to invest.
Commissions and Fees
For You Invest Trade, pricing is straightforward – no commissions when trading stocks or ETFs when trading online, but there is a $25/trade fee when using a representative to assist you.
Also, when trading options, some fees may apply. While there is no fee/trade, there is a $0.65 fee/contract. Also, there is a representative-assisted fee of $20/transaction.
For fixed-income products, You Invest charges a fee only when trading products in the secondary market. There is a $10/trade plus $1/bond over 10 bonds fee but limited to a maximum $250. For representative-assisted trades, the fee jumps to $30/trade plus $1/bond over 10 bonds, limited to maximum $250.
For the You Invest Portfolio there is a minimum investment of $500 and an annual advisory fee of 0.35%. To form an idea what this means in real terms, for a $20,000 portfolio invested in the You Invest Portfolio, the fee to pay is $5.83/month.
And then there is a whole bunch of other non-trading related commission than all brokers charge. We will not be listing them all here, but consider paying industry commission for things like:
- Brokerage account transfer – $75
- Wire transfer – $25
- Legal transfer – $25
- Check returns – $12/check
- Stop payment – $30/item
Trading takes place via the industry-leading Chase Mobile App. Ranked #4 on J.D. Powers U.S. Wealth Management Mobile App Satisfaction, it is recognized as one of the best apps for mobile banking and trading in the world.
Unclear how this part works at You Invest. There is nothing to suggest there is even one single option to use to contact someone directly involved in this part of the J.P. Morgan business.
Most likely You Invest shares the customer services with J.P. Morgan Chase, although it does not make it clear to the customer. If that is the case, this is one of the most complete customer services available on the market, with every single issue having a solution.
This is where the You Invest stands out of the crowd when compared with similar brokerages that target the same customers – the investing education section.
To build (and maintain) one, is a costly process and not everyone affords to do it. As a consequence, most of its competitors either ignored this part completely, or simply attached some FAQs and general blog articles about investing.
You Invest customers benefit from J.P. Morgan's extensive educational base as it is meant to help them succeed in their trading.
In other words, J.P. Morgan shares its educational base with its low-cost arm – knowing well that a successful trader brings in more commissions at the end of the day than one that struggles to understand basic market terms.
Step 1: Visit the You Invest homepage and then click on “open an account.”
Step 2: On the next page, three options are made available regarding the type of account you want; choose one.
Step 3: This takes you to the next page, which requires that you fill in your personal details, home address, and contact info.
Step 4: Next, you will be taken to a page where you can choose your own username and password to set up your account.
Complete the process and you are done!
Here are our 3 choices of brokers which can use as a great alternative to You Invest:
Robinhood has been around for over a decade, and as the name suggests, the overall aim was to democratize finance for all, slashing the cost of trading stocks for U.S. residents.
Today, Robinhood is one of the most popular brokerage platforms. It is also due to expand its services to the U.K. in the near future. With its introduction of fractional shares, Robinhood caters to traders who are cost sensitive. The company also offers access to cryptocurrency markets.
The target client for this company is the younger generation. This brokerage house is challenging the traditional broker, making waves in the industry. Robinhood understands that while traditional brokers have more account types and cover more markets, they lack the ability for quick responses to customer changes. So, they aim to give clients the power to participate without the bulk from the traditional industry.
Although it has caused a great deal of damage to lots of businesses, Robinhood has enjoyed additional business. With little to no sporting events for people to bet on, newbie investors have turned to Robinhood. This is a sure indication that over the coming years, Robinhood will continue to grow.
Webull also belongs to the new generation of brokerage houses challenging the traditional houses for clients. The company’s main tactic to compete is to attract many small retail traders, and by increasing volume, they are able to successfully compete despite only charging smaller fees.
The COVID-19 pandemic has provided the perfect example to understand this type of brokerage house. The $600 weekly checks offered by the government were put to work in many cases. There was a massive number of new retail trading accounts, but which brokers benefited from this new generation of traders? Since brokers like Webull accepted any deposit, they typically attracted clients that would have struggled to meet the minimum deposits required by traditional investment houses. This phenomenon was so large that the financial media often cited it as the primary reason the stock market continued to advance during the pandemic.
Traditional investment houses found these new brokers surprising, and as the competition intensified, they also lowered their commission to try to compete.
However, Webull continues to be highly attractive to new investors since it has no contract fees, and there is no commission for trading options. This is obviously far less than even the highly competitive Merril Edge that not charges $0.75 for contract fees and charges $6.95 options commission. Until the traditional houses learn that the new generation of traders operates in this way, Webull is likely to dominate by offering cheaper rates to gain exposure to the same markets.
Robo-advisory services increased in popularity in the last years. As digitalization takes over our lives, it conquered financial markets too.
Acorns services seem simple and intuitive. Compared with the traditional investing competitors, accessibility is the number one reason why investors choose to use Acorns instead of a traditional brokerage house. And yes, Acorns is a broker, as it intermediates the access to financial markets, albeit it does so for a ridiculously small fee due to extremely low operational costs. One cannot compare the costs of, say, Schwab, one of the largest brokerages in the United States, with Acorns. Hence, the difference in the costs is seen in the fees paid for accessing the market.
Besides accessibility given by the low entry costs, Acorns shines at the simplicity of its products. After all, there are only five portfolios to choose from, based on how much risk the investors are willing to take. By offering much more products to choose from (e.g. options trading, mutual funds), the traditional investment industry makes it difficult for individual investors to pick the right strategy for their portfolio.
Therefore, a robo-advisor like Acorns does not need to invest in trading education as it is its job to calibrate the portfolios and to allocate the investments accordingly – not the job of each individual client. This brings us to the biggest advantage of a robo-advisory firm in comparison with traditional investment services – there is no need to do anything, but send money in every day, week, or month. This is what attracts people scared of dealing with classic brokerage houses either due to lack of knowledge or to high costs.
You Invest is best for..
You Invest is best for traders not affording a traditional brokerage account and will settle with similar features but at a lower cost. Yes, the product offering is limited. Not all markets are present, and one may lack the flexibility to diversify the portfolio the way it may wish to.
But all customers know that if they want more, there is just a small step to take – switch to J.P. Morgan.
Therefore, You Invest is best for beginners in the world of investing and trading. If you have a spare amount of dollars you want to put to work, this is the right place to start.
You Invest makes sure to put everything at your disposal. And by everything, I am talking about what a beginner needs – a strong and solid app/trading platform, fair commissions and fees, solid investing education to learn about financial markets, and a powerful investing house watching your back.
Sounds like a fair deal.