What Is Self Directed Investing

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 6 minute read

Online discount brokerages come in two flavors: those that skimp on features and those that really do save you money. Among the latter is J.P. Morgan Investing (or, simply, J.P. Morgan), formerly known as You Invest by J.P. Morgan.

It’s cheap not because it’s lacking in the capabilities and tools that do-it-yourself investors (and especially rookie investors) need to monitor the market. Customers of J.P. Morgan who have had a previous banking account with Chase Bank may never be required to pay a commission while trading stocks or ETFs on the platform.

Whether or not you’re already a Chase customer, you can still take advantage of Chase’s low stock trading fees and true commission-free self-directed trading. Even while J.P. Morgan’s managed investing option is fairly priced, it is essentially a robo-advisor and is therefore not a suitable solution for high-asset customers wanting really tailored advice and management.

J.P. Morgan Investing is a good choice if you’re searching for a low-cost trading or managed investing service that provides all you need to develop a diversified portfolio and nothing more.

Investing Platforms and Plans at J.P. Morgan

In addition to its desktop platform and mobile app, J.P. Morgan offers two unique trading options: a low-cost, do-it-yourself brokerage option and a fairly priced, hands-off automated managed investing option.

Both systems support individual taxable brokerage accounts, tax-advantaged retirement accounts (both Roth and traditional IRAs), 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).

Learn about J.P. Morgan’s two investment options—Self-Directed Investing and Automated Investing—here.

Self-Directed Investing at J.P. Morgan

Self-Directed Investing from J.P. Morgan is a discount online brokerage service. There are no limits on the number of stock or ETF trades you can make, and no minimum account size or balance is required.

J.P. Morgan does impose a $0.65 fee per contract for options trading, while not charging a commission.

Account Opening Bonus

In order to receive a bonus of up to $625, you must open a new J.P. Morgan Self-Directed Investing account before January 19, 2023, and make qualifying contributions to the account within 45 days. Here are the tiers of bonuses you may expect to receive:

  • Deposits ranging from $25,000 to $99,999: $125 bonus
  • Deposits ranging from $100,000 to $249,999: $300 bonus
  • Deposits of $250,000 or greater will receive a $625 bonus.

After 45 days, your bonus will be decided. Your bonus from J.P. Morgan Investing will be sent into your account within 15 business days after you have held your new funds for 90 days.

Available Self-Directed Investment Products

JPMorgan Chase Self-Directed Investing gives access to four investment products:

  • Stocks. Investors using J.P. Morgan’s Self-Directed Investing program don’t have to pay a trading fee when buying or selling equities that are $5 a share or higher and are listed in the United States. You can’t invest in publicly traded or OTC equities if they’re valued below $5 per share.
  • ETFs. Through J.P. Morgan Self-Directed Investing, you may gain exposure to a wide variety of exchange-traded funds (ETFs) listed in the United States. In most cases, J.P. Morgan has no say over the fees and costs associated with these products.
    Investing in a pooled fund with other people. Mutual funds, both with and without transaction fees, are available through J.P. Morgan Self-Directed Investing. Mutual funds, like ETFs, may include fees and costs that are outside the control of J.P. Morgan.
  • The term “fixed income” is often used. Government and corporate bonds are among J.P. Morgan Self-Directed Investing’s fixed-income options.
  • Options. You can trade options with J.P. Morgan Direct Investing if you meet certain criteria.

JPMorgan Chase Unlike traditional investing accounts, those with a Self-Directed Investing account can’t buy commodities, cryptocurrencies, or foreign exchange.

Self-Directed Client Portfolio Builder

Use J.P. Morgan’s Portfolio Builder if you are unsure about how to begin investing. It is a free automated assistant that comes with J.P. Morgan Self-Directed Investing and helps you create an asset allocation plan and execute transactions on your behalf.

Automated Investing at J.P. Morgan

Automated Investing from J.P. Morgan is the bank’s managed investment account service. The algorithm-driven robo-advisor software from J.P. Morgan charges a fixed advising fee of 0.35% of assets under management and creates and maintains diverse portfolios depending on your goals and comfort level with risk.

To get started with J.P. Morgan Automated Investing, you’ll answer some standard questions about your investment horizon, objectives, and comfort level. When you’re answering questions, the program generates a semi-custom asset allocation that takes your preferences into account, and it periodically rebalances the portfolio when market fluctuations alter the initial allocation.

There are no bonds or mutual funds available in J.P. Morgan’s automated investing platform. Mutual funds and fixed-income instruments cannot be added. It’s important to note that not all ETFs are equally diversified; some may consist mostly of fixed-income securities or follow fixed-income indices.

It is recommended that you have at least $500 in your account before signing up for J.P. Morgan Automated Investing.

J.P. Morgan Investing Benefits

Consider these arguments in favor of J.P. Morgan Investing:

  1. You may use Chase without opening a new account. A J.P. Morgan account is available to everyone. You don’t have to already have an account with Chase Bank or a Chase credit card to open an account here.
  2. Stock and ETF Transactions Executed at Your Own Discretion Are Never Charged by a Commission. Self-directed investors at J.P. Morgan may take advantage of no trading fees and unlimited free stock and ETF trades. No commissions are charged on options, but a $0.65 per-contract fee is incurred.
  3. Self-Directed Investing Accounts at J.P. Morgan need no opening or maintenance deposit. A new Self-Directed Investing account with J.P. Morgan has no minimum opening deposit. Additionally, there is no minimum balance requirement going forward. Both are excellent for novice investors who don’t have a lot of money to put in the market.
  4. Transaction Costs for J.P. Morgan’s Robotic Investing are Reasonable. Regardless of the size or composition of a client’s portfolio, J.P. Morgan Automated Investing levies a fixed yearly management fee of 0.35% of assets under management. Costing far less than a full-service human investment manager, this is comparable to other top ranked automated investing services.
  5. There is more than one kind of joint account. One of J.P. Morgan’s three options for joint accounts is a tenants-in-common structure, which is intended for unrelated or unmarried account holders who do not wish for their co-owners to receive their portion of the account upon their death.
  6. Available IRAs. J.P. Morgan is a good location to begin saving for retirement because it offers both standard and Roth IRAs.

J.P. Morgan Investing Drawbacks

Before deciding to create a J.P. Morgan Investing account, think about the following potential drawbacks:

  1. There are no price breaks for having a large number of assets in a portfolio. J.P. Morgan Automated Investing does not provide tiered discounts for higher-asset accounts, in contrast to other automated investment management systems and the vast majority of full-service human advisers. The typical charge in this industry isn’t prohibitive, but it would be wonderful if clients who bring in large amounts of investable assets got a discount. Many younger individuals don’t have the substantial assets required to qualify for J.P. Morgan’s asset management solutions for high-net-worth clients.
  2. Expertise in Human Capital Investment Is Scarce. Financial advisers and wealth managers are not readily available to clients through either J.P. Morgan Self-Directed Investing or J.P. Morgan Automated Investing. Self-directed investors likely won’t care, but others who want to take a hands-off approach may feel more comfortable with a personal touch.

Bottom Line

Self-directed investors, hands-off types, and those looking for a combination of professional supervision and DIY freedom may find a home on the J.P. Morgan Self-Directed Investing platform (formerly known as You Invest by J.P. Morgan). It’s a great option for those watching their spending thanks to the relatively low commissions and manageable fees.

If you’re a smart investor or high-frequency day trader, you won’t find the types of execution-oriented tools that will help you succeed at J.P. Morgan.

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