Even more beginner-friendly
We talked about changes to THEO recently. You can see all the THEO posts so far here.
So what's new?
Well, the minimum deposit to open an account has been lowered from 100,000 yen to 10,000 yen. That means that opening a THEO account is now easier than ever.
The other development is that they have created a new way of using the service. In the past when you signed up for an account, they asked you some questions about things like risk, inflation, etc. Using your answers they would assign you a risk rating and design a portfolio for you. After making the account, you were then free to change the allocation manually.
However, when they followed up, they found many customers didn't really understand the questions.
So they made a new mode: "leave it to THEO" (お任せモード). Basically based on your age and assets they will decide the best way to allocate your portfolio and run it automatically. You just have to select the automatic mode.
There is still the option to create your own portfolio manually if you prefer, but I think this new service makes THEO even more beginner-friendly.
I tried it out with my wife's account. Switching to 'leave it to THEO' resulted in the portfolio becoming much more conservative and defensive:
In more detail:
For what it's worth, I think that's a reasonable portfolio for someone with my wife's characteristics. I'm going to leave it on 'leave it to THEO' mode and see how it does. Should be interesting, particularly if we see a market correction or crash.
So is THEO for you?
Well, I am a big fan. I love the service, the product, and the interface. It's perfect for beginners. You put money in, they manage it, you take money out.
However, the fees are high. 1% a year is probably too much for this service. If you are comfortable investing yourself, you can get similar results and only pay 0.2% or so. Over decades, this will make a huge difference.
So I would say if you want someone to take care of things for you and you don't mind paying for it, THEO is a good choice.
If you have the time and interest to learn how to do it yourself, you can save yourself a lot of money.
Both options are reasonable, and better than the alternatives: not doing anything or letting someone rip you off with unsuitable products.
What do you think? Any THEO fans out there? How are you finding the service? Please post comments and questions in the comments below.