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You Invest has gone live with options trading for some customers.
- JPMorgan's You Invest, a one-year-old digital retail investing service, has started rolling out options trading for select customers and expanding to more people in the coming months.
- You Invest launched automated portfolios this summer, and is now looking to lower its $2,500 minimum investment for those portfolios later this year.
- That puts You Invest, which is housed in the Chase app and website, up against trading apps like Robinhood, which offers zero-commission options trades, as well as low- or no-minimum robo-advisers like Betterment and Wealthfront.
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JPMorgan Chase's one-year-old You Invest retail investing service has now gone live with options trading for at least some customers, and is also planning on lowering the minimum investment size for its automated portfolios later this year.
Those moves mark the next steps of JPMorgan's expansion into cut-throat businesses dominated by low-cost brokers as well as startup stock-trading and robo-advice apps.
JPMorgan is just a few months removed from shuttering its Finn digital bank after it didn't catch on with younger retail customers. Still, You Invest is vying for investing business from that same demographic, which has fewer dollars to invest and less financial savvy than high-net-worth individuals.
Robinhood launched a zero-commission options-trading product in late 2017, which has since grown quickly and added more complex trading strategies. Discount brokers including TD Ameritrade and Charles Schwab have long given customers the opportunity to trade options for a fee.
The You Invest platform is currently live with options trading for a subset of customers, and a geographic rollout will continue over the next couple of months, a JPMorgan spokesperson told Business Insider.
The bank did not provide any details on fees for options trades or how many people were able to trade options already. The spokesperson said that You Invest typically rolls out major features in stages.
Lower minimums for robo-portfolios
Meanwhile, competition is getting even stiffer in the stock trading and automated advice space - asset management giant Vanguard is now testing out a fully digital robo that will build portfolios using its own funds, according to media reports last week.
CNBC had reported in mid-July that You Invest was eyeing adding options trading in an August update that would also offer the ability to track investments held elsewhere.
You Invest plans to debut enhanced aggregation and financial planning tools toward the end of this year and into next year, the platform's CEO, Jed Laskowitz told Business Insider in an interview last week.
It also plans on lowering the overall minimum for its You Invest automated portfolios, which is currently $2,500, later this year, the spokesperson said. (Vanguard's new service is reported to have a minimum of $3,000, while Wealthfront has a minimum of $500 for robo-advice and Betterment has no minimum. )
The You Invest launch about a year ago was JPMorgan's first foray into self-directed investing, which leaves securities trading up to the user. In its original form, You Invest was an online brokerage to trade stocks, bonds, mutual funds and ETFs, and it was geared towards long-term investors, said Laskowitz, who is a 23-veteran at JPMorgan.
The service is housed on the Chase mobile app and website, and Laskowitz said the "vast majority" inflows are coming from assets that customers hold outside of the bank.
Value is critical
JPMorgan has worked with fund companies to get minimum fund investments down to zero. You Invest offers a $0 minimum investment for around 100 families of funds - a total of 2,500 mutual funds.
Value is critical in the competitive market, Laskowitz said. Clients get free trades that start at 100 per year and scale up based on the account size and level of service they have with Chase.
You Invest moved into automated advice in July. Its portfolios, including asset allocations and market return assumptions, are built on the same inputs JPMorgan uses across its asset and wealth management.
You Invest has four portfolios that offer allocations based on clients' risk-taking desires. They are built using JPMorgan's own exchange-traded funds, as opposed to products from different providers.
"It's all made up of JPMorgan ETFs. We have a rebating process that we go through, so all clients are charged a flat 35 basis-point advisory fee," Laskowitz said.
Financial advisers working in Chase branches can also access the You Invest tools to work with their own customers.
"As we think about the market and the segments, it's not solely self-directed. It's how do we create better experiences for our clients that work with advisers? How do we do that for clients that want to do a portion of that on their own?" Laskowitz said.
Prioritizing what's next
When asked about hiring plans to continue supporting the build-out of You Invest, Laskowitz said he's focused on the "triumvirate of product management, design, and technology."
You Invest is always looking for "great product managers and designers and technologists, and everyone is building digital platforms, trying to go after one segment or another," he said. He said You Invest was happy with its current team, but "always trying to find great people in those areas."
The bank has been working on You Invest for three years, Laskowitz said. When asked about what the challenges were to building out You Invest, he responded: "It's how are we thinking about our road map going forward, looking at the customer research, and prioritizing what we're going to build next."
The You Invest launch came around the same time as JPMorgan's debut of its short-lived, millennial-focused digital banking app, Finn. The bank shut Finn down this summer and folded those customers into its Chase app.
When asked if there were any lessons to be learned from Finn, Laskowitz said there were "some similarities " in how the You Invest team and the Finn teams were thinking.
Both were focused on zeroing in on young customers - he said more more than half of You Invest customers are millennials, and over 90 percent are existing Chase customers that have never invested with JPMorgan before. He said the bank's customer research led it to believe that there was a demand for having investment insight, cash, and banking all in one place.
