Robo-advisors provide a great service at a low cost. Deposit your funds, answer a few questions, and the service will invest based on your risk profile and goals. It can’t get much simpler than that.
What if you could get the same service at a similar cost but have professional investors manage your money instead of automation? That's what Round is claiming it can do. Invest with them, and they'll use their network of professional money managers to invest your funds — all for the low annual cost of 0.50%. And if Round can't generate a profit during any month, you don't pay.
On the surface, that sounds like a pretty good deal. But, as with any advisory service, it's important to dig into the details. We've done that for you. And we break down everything you need to know about Round in our full review below.
Quick Summary
- 0.50% annual fee based on the amount invested
- The fee is waived for any month(s) that returns are negative
- Not completely transparent about how their investing works
Round Details | |
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Product Name | Round Investments |
Min Invesment | $500 |
Annual Fee | 0.50% |
Account Type | Traditional IRA, Roth, and Taxable |
Promotions | None |
What Is Round?
Round is a fintech investment company. They were founded in 2016 by Ron Rojany and Saul Cohen. Round is based in Los Angeles, CA. It has received $2.3 million in funding through a venture round. Investors have not been disclosed.
What Does It Offer?
Round says that it provides managed investments. Does this mean the people at Round are actively managing your investments? While we can’t confirm that, it certainly appears the answer is no.
What it appears Round is actually doing is investing in actively managed funds. These are not funds created by Round or money managers hired by Round. They are funds held at other financial institutions. It doesn’t seem as though there are any direct discussions between Round and these money managers.
Like robo-advisors, Round invests your money based on your answers to a set of questions during the on-boarding process. Then it says that it will invest your money in funds that are managed by "Wall Street's top fund managers."
Maybe Round believes managed investments are better than non-managed ones. But, on average, that's not the case. SPIVA says that only 24.73% of actively managed large cap funds have outperformed the S&P 500 over the past five years.
Related: Active vs. Passive Investing: Which Is Best?
When you first visit Round's site, it's easy to think that it's offering its own in-house actively managed fund. You have to dig a little before you realize what’s going on since. It doesn’t help that their FAQ page goes nowhere and the blog link goes to an Asana website with a "not found" error.
Managed Funds
As mentioned above, it seems that Round will invest your funds into managed funds. Like with robo-advisors, you don’t have to worry about figuring out which funds to put your money into. Round will do that based on your intake questions.
No Fee If Returns Are Negative
If Round can’t generate a positive return for your portfolio during any month, you don’t pay a fee. This has the effect of reducing your overall annual fee.
Annual Fee Can Be Less Than Fund Fees
A 0.50% annual fee isn't too much, compared to 1.00% or more. Some actively managed funds do charge above 1.00%. So you're already getting a discount on those, at least according to the materials available on Round's website.
Are There Any Fees?
Yes. Round charges an annual 0.50% fee. However, if Round doesn’t generate a profit for you during any month, you aren’t charged a fee.
What’s unclear are the fees charged by the funds that Round invests your money in. For example, if several funds charge 0.75% and more, how does Round make any money?
Clicking through to links about fees leads to blank web pages. Basically, Round is not disclosing this information. You’ll want to clarify their fee structure before investing anything with them. It’s unclear if other fees are charged.
It's also not clear if Round has ever had to reduce fees - so is the 0.50% a true reflection or has their "negative return" promise been invoked yet?
How Do I Contact Round?
You contact Round through email at team@investround.com or through the chat message interface on their website. Don’t be surprised though if no one is there to chat with you. You’ll have to leave a message instead.
Phone contact is not available (at least initially). This is likely due to the small number (i.e., two) of people running the company. Round does have a social media presence on Twitter, Facebook, and Instagram. However, it looks like there haven't been any new posts since mid-2020.
Customer Service Ratings
Round doesn't have any reviews on Trustpilot, and it isn't accredited by the Better Business Bureau. There are some complaints about the lack of response from the company when emailing them from other blog reviews.
How Does Round Compare?
Round is taking your money and putting it into managed funds. You can get that with any larger financial institution or group of advisors and with a much better customer experience and larger feature set.
Regardless of the fund strategy you choose (active or passive), if you want to be sure you can speak with someone and get a response, you'll do better using the wealth management services at one of our favorite brokers such as Vanguard, Schwab, or Fidelity. Here's a quick comparison chart:
Header | |||
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Rating | |||
Annual Fee | 0.50% | 0% to 0.80% | 0.15% to 0.30% |
Access to Human Advisors | |||
Banking? | |||
Cell |
How Do I Open An Account?
Not sure. If you go to InvestRound.com and click any Get Started buttons, they will open up the homepage again. Clicking through the top menu onto some of the other pages reveals an Invest Now button. However, that button will bring you to a 404 page.
Is It Safe And Secure?
Round’s website is encrypted. They're also members of FINRA and SIPC. However, Round doesn't hold deposit accounts and isn't FDIC-insured. This means you can lose all of your invested money. But that's no different than any other investment firm.
Is It Worth It?
Round doesn't seem to have any differentiating feature set or wow factor. Maybe if they had exceptional customer service, it would be different. But that's most assuredly not the case.
Additionally, Round is not transparent about how its investing works. It makes it sound as though it has partnerships with money managers to invest your funds. In reality, it's simply investing your money in funds. They should just be straightforward and explain what they're doing in clear terms.
Finally (and perhaps most concerning), much of the website leads to blank pages, including the open account links. If Round isn't able to keep its website up and running, that doesn't exactly instill confidence about the level of care that it will give to your portfolio.
For all of these reasons, we feel that investors should pass on Round for now. If they address some of the concerns that were raised in this review, we may change our opinion. But until then, we recommend that you choose from one of our favorite brokers or robo-advisors instead.
Round Features
Account Types |
|
Minimum Investment | $500 |
Management Fees | 0.50% (waived during months when the portfolio return is negative) |
Average Expense Ratio | Does not disclose |
Socially Responsible Investments | No |
Access to Human Advisor | No |
Automatic Rebalancing | Yes |
Tax-Loss Harvesting | No |
Customer Service Options | Live chat or email |
Customer Service Email | team@investround.com |
Customer Service Hours | Mon-Fri, 9 AM-5 PM (PST) |
Mobile App Availability | iOS |
Promotions | None |
Round Investments Review
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Commissions & Fees
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Customer Service
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Ease of Use
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Investment Options
Overall
Summary
Round is an investing platform that only invests in active funds that are managed by top Wall Street fund managers.
Pros
- 0.50% annual fee is reasonable
- Fee is waived during months when returns are negative
Cons
- No tax-loss harvesting
- Broken website
- No way to contact Round by phone
- Unproven track record
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared toward anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications, including the New York Times, Wall Street Journal, Washington Post, ABC, NBC, Today, and more. He is also a regular contributor to Forbes.
Editor: Clint Proctor Reviewed by: Chris Muller