68 customizable lessons, aligned with National Standards, exams and more.
Read NGPF's school-by-school analysis of financial education in America today
Activities
Advocacy
Behavioral Economics
Best Of
Budgeting
Buying a Car
Career
Checking
Consumer Skills
Credit
Cryptocurrencies
Current Events
Curriculum Announcements
Economics
Entrepreneurship
Edpuzzle
ELL Resources
FinCap Friday
Gambling and Sports Betting
Insurance
Interactive
Investing
Math
Paying for College
Philanthropy
Podcasts
Press Releases
Professional Development
Question of the Day
Savings
So Expensive Series
Taxes
Teacher Talk
With everything else moving online at an ever increasing clip, it seems only natural that investment advice should move in that direction also. You will hear more about “robo-advisors” (detailed description in this Barron’s article) in the months and years ahead. While the term may be offputting to some, we may come to realize that investment decisions made by a robot (with no emotions) might actually provide us with better outcomes..
This concept of the “robo-advisor” is becoming more mainstream as evidenced by the news from Charles Schwab this week (Schwab is one of the largest retail brokerage firms with close to 10 million brokerage accounts):
From NY Times:
The brokerage firm Charles Schwab said on Monday that it would enter the online investment advice market early next year and would offer its advisory services to those customers without charge. In the last few years, companies like Wealthfront, Betterment and FutureAdvisor have made a big splash building software that puts customers in a collection of low-cost exchange-traded funds.
For a fee of roughly 0.15 to 0.5 percent each year on the assets, the companies help people assess their risk tolerance, put them in an appropriate mix of these index-fundlike investments and rebalance back to the original allocation as the markets move. They also can help with optimizing sales to save money on taxes.
Investment News notes how this offering from Schwab will disrupt financial advisors who provide investment advice at much higher fees:
William Trout, a senior analyst with Celent’s wealth management unit, said the product could be disruptive to investment advisers who custody [editor’s note: custody means to hold investment assets] with Schwab because even if the service appeals to a mass affluent clients who may not need a full adviser relationship, it is likely to put additional pressure on advisers to drive down their fees. “Schwab’s decision to offer its platform to consumers for free is unlikely to go over well with its captive network of adviser,” he said.
Reuters notes the much lower fee structures for the Schwab offering vs. standard brokers:
The program, to be marketed as Schwab Intelligent Portfolios toretail investors and independent investment advisers, will create portfolios of exchange-traded funds managed by Schwab and other providers.
In foregoing management and transaction fees, Schwab intends to be “disruptive” to competitors, company officials said in a conference call. Most automated investment programs charge about 0.25 percent of the money that clients invest. Traditional brokerage firms, including Schwab and competitors such as Bank of America’s Merrill Lynch and Morgan Stanley, typically charge 1 percent or more of clients’ invested assets in advisory programs.
SF Business Journal spotlights a local start-up company, Wealthfront, which pioneered this trend toward automated advice:
Wealthfront CEO Adam Nash says he’s not surprised to see Charles Schwab disclose plans this week to enter the robo-advisory business as his firm pocketed another $64 million in venture capital. “There is a once-in-a-generation opportunity to build a company from the ground up to focus on the millennial investor,” Nash wrote Tuesday in a company blog.
How will this change my classroom instruction? As I noted in an earlier post, there are certainly many shortcomings in using the currently popular Stock Market Game as a learning device. This trend towards robo-advisors I think is a positive one for investors. Why?
Our upcoming investing unit (released next week) will cover topics such as asset allocation, asset classes and the importance of fees. We will also include a performance task where students will make decisions about an asset allocation that is right for them given their risk profile, time horizon and investing goals.
NGPF Featured Lesson: Plan a Food Budget
Checking Account Trends
Question of the Day: Where do most young adults say they learn about personal finance?
Question of the Day: How long does the average user spend on TikTok a day?
Question of the Day: What are the top five gifts consumers plan to give for Valentine's Day?
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.
Join the more than 12,000 teachers who get the NGPF daily blog delivered to their inbox:
MOST POPULAR POSTS
1
Question of the Day: What are the top 3 fastest growing careers that don't need a 4-year degree?
2
Fall 2024 Updates to Paying for College Resources
3
Useful Personal Finance Movies and Documentaries with Worksheets
4
FinCap Friday: FAFSA Fiasco
5
New Fall PD Badges are Here
Before your subscription to our newsletter is active, you need to confirm your email address by clicking the link in the email we just sent you. It may take a couple minutes to arrive, and we suggest checking your spam folders just in case!
Great! Success message here
New to NGPF?
Save time, increase engagement, and teach life-changing financial skills with NGPF’s free curriculum
1.Register for a free TeacherAccount
2.ExploreSemester Course
3.Findstudent favorites
4.LeverageNGPF Academy
Your new account will provide you with access to NGPF Assessments and Answer Keys. It may take up to 1 business day for your Teacher Account to be activated; we will notify you once the process is complete.
Thanks for joining our community!
The NGPF Team
Complete the form below to access exclusive resources for teachers. Our team will review your account and send you a follow up email within 24 hours.
To speed up your verification process, please submit proof of status to gain access to answer keys & assessments.
Acceptable information includes:
Acceptable file types: .png, .jpg, .pdf.
Once you submit this form, our team will review your account and send you a follow up email within 24 hours. We may need additional information to verify your teacher status before you have full access to NGPF.
Take the quiz to quickly find the best resources for you!