Nowadays, there are a lot of options when it comes to investing your money. And having worked in the financial services industry for over 10 years, I’ve seen a lot of firms come and go.
I also receive a lot of press releases about new firms and what makes them special or stand out from the rest. Sadly, the majority are just copy cats of other firms with everything in common.
But Emperor Investments is different. Yes they are a robo-advisor, but they are completely different than your typical robo-advisor.
In this Emperor Investments review, I am going to get into the details of what makes this company different and how these differences can benefit your money.
My Emperor Investments Review
Who Is Emperor Investments?
Emperor Investments began their goal-based investing platform earlier this year. While the newness of the company might be cause for some concern, the truth is that the business has been in the making for over 10 years.
During this time, the founders were investing their personal money into their model portfolios and making adjustments to find the perfect allocation mix for optimal growth.
Now that they are pleased with the high performance of their results, they are opening the doors to the public.
Pure Equity Investing
In order to achieve the high performance of their portfolios, the company uses pure equity portfolios. What are pure equity portfolios?
They are investment portfolios that are customized specifically for you and your goals. They are comprised only of dividend paying stocks and are fully diversified from the start.
Disclosure: Asset allocation and diversification do not guarantee a profit or protect against a loss in a declining market.
The benefit of this is that you get direct ownership in the companies in your portfolio. If you were to have a portfolio made up of mutual funds or exchange traded funds, you would not have direct ownership of the companies.
Disclosure: *Mutual Funds and Exchange Traded Funds (ETF’s) are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from the Fund Company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.
Additionally, by investing solely in stocks, you avoid management fees of the investment products.
Why Emperor Is Different Than Other Robo Advisors
As I mentioned earlier, there are a lot of robo-advisors to choose from. Trying to understand one from the other can make your head spin. But at the end of the day, they all do the same thing.
They automatically invest your money in a portfolio of ETFs for a small annual fee. Some offer add-on services like tax loss harvesting and rebalancing, but for the most part, they are all one in the same.
Here is what makes Emperor Investments different.
They don’t invest in ETFs. They invest your money in individual stocks. And their team of experts uses state of the art technology to make sure they are picking suitable stocks for you.
In the end, you have a fully diversified portfolio of dividend paying stocks.
Here is what a sample portfolio looks like.
Here is a run-down of their process.
You begin by answering a detailed investment questionnaire. This helps Emperor get to know you, your goals and your level of risk.
Once you complete this questionnaire, you are assigned a risk level. If you feel your risk level is wrong or you want to retake the assessment you can. Assuming all is good, Emperor will get to work in identifying the best stocks for you.
Here is how they do this.
Step #1: Use Proprietary Software Looking For Companies That:
- Paid dividends uninterrupted for a long period of time
- Highly likely to continue paying dividends in the future
- Purchased for a fair price
Step #2: Experts Do Detailed Analysis Looking For Companies That:
- Have a compelling value proposition
- Have a strong competitive advantage
- Have a quality management team
But the differences don’t end there.
Let’s say you have a few different goals for your money. You want to retire one day, but you also want to save money for a vacation house too.
Two goals, two time horizons, two different levels of risk. As a result, you can’t lump all of your savings into one portfolio and call it a day.
You need to have customized portfolios for each goal. This is where Emperor Investments shines. They create customized portfolios for each of your goals and invest your money accordingly. The result is you know where each goal stands at any given time.
How Much Does It Cost To Invest?
The cost to invest with Emperor is straightforward. They charge a flat 0.60% annual fee on your balance and that is it.
So if you have $10,000 invest with them, you will pay $60 a year in fees.
How does this compare to other robo-advisors out there?
On the surface it appears that Emperor costs more. After all, with a Betterment Digital Plan you are paying 0.25% annual fee. But Betterment invests your money in ETFs, which have management fees as well.
When you take into account the total cost of other robo-advisors, Emperor is right in line, and in many cases, less expensive.
You can even use their calculator to see how much money you can save in fees by investing with Emperor.
Is Emperor Investments Safe?
Emperor places high standards on keeping your account and personal information safe and secure. They use bank level security, secure servers, identity verification services and the strongest encryption available to keep unauthorized users out.
In addition to the security measures listed above, Emperor Investments is covered by SIPC, like any legitimate investment firm.
(Disclosure: The Securities Investor Protection Corporation (SIPC) provides protection of up to $500,000, including a $250,000 limit for cash on accounts held at SIPC member firms. The protection is provided in the event a SIPC member firm becomes insolvent and covers most types of securities such as stocks, bond, and mutual funds. SIPC does not protect you against losses caused by a decline in the market value of your securities and it does not provide protection for investment contracts not registered with the SEC.)
They use Folio Investments as their broker dealer and Folio is registered with the Securities and Exchange Commission and FINRA.
You can view the ADV Emperor is required to submit with the SEC by clicking here.
Advantages And Drawbacks
Here is a short summary of the things I love and don’t love about Emperor Investments.
- Dividend stock investing. I am a big fan of investing in high quality dividend paying stocks. It’s a great way to build wealth for the long term.
- Automatic rebalancing. No work for you here, Emperor will make sure you portfolio is always aligned with your goals.
- Dividend reinvesting. They will reinvest the dividends you earn, which over the long term, boosts your returns. You can also turn this off if you want to live off the income too.
- Flat fee pricing. I like simple to understand pricing. There is not a page worth of random fees you pay. It’s one fee and that is it.
- Low initial investment. You can get started investing with as little as $500.
- Annual fee. While it is much lower than traditional advisors, it is a little higher than some of the other robo-advisors. With that said, Emperor is offering something different here and for the value they provide, the fee is more than worth it.
- Lack of history. Since the company just started, they don’t have a long term track record, other than investing their personal money to build out the portfolios they use today.
Emperor Investments vs. The Competition
There are many robo-advisors out there but none really match up well against Emperor given that the others invest in exchange traded funds. With that said, here is one other company that is in the neighborhood.
M1 Finance. M1 is a completely free robo-advisor service. You have the option of picking a pre-built portfolio that M1 created.
The catch here is that it isn’t customized exactly for you and it is made up of exchange traded funds, not individual stocks.
But, you can create your own customized portfolio of just stocks. M1 will do their version of rebalancing by investing new money into the stocks that have deviated the most from your goal. They will also reinvest dividends for you as well.
The downside is that they only place trades once per day. So if you want to buy more shares at 2pm, you aren’t going to buy more shares until the next morning. Also, while your stock portfolio is customized, you are the one customizing it, not M1.
In other words, with M1 you are deciding on the investments that make up your portfolio. With Emperor Investments, a professional who has done extensive research is deciding on the investments that make up your portfolio.
Overall, I love what Emperor Investments brings to the table.
By having a customized dividend stock portfolio in a robo-advisor, you get a lot for your money. Add in their 40 years of investing experience and you can be sure that you will see your money grow.
But what really stands out is they put you ahead of investing. They get to know you and your goals first.
Then they figure out how to invest your money. This is how investing should be done and is it great to see Emperor understands this.