A bank and a financial services company have partnered to provide mutual funds and investment guidance to non-affluent investors, the companies said today.
The two firms, Marketplace Bank and Whatifi Financial will offer the services and products through Marketplaces 123 small branches, located throughout Floridas Winn-Dixie supermarkets. The strategy is intended to attract mainstream families to the idea of investing in mutual funds by making advice easier to get and offering minimum initial investments of only $100.
Whatifi will offer five funds through the program, four index funds and one money market product. The vehicles will include S&P 500, bond index, international index and extended market funds. The extended market product will emulate the Wilshire 4500, said Monica Chandra, head of product marketing at Whatifi.
The service allows people to open an account at a Marketplace branch in about five minutes. Marketplace will provide basic banking services to the accounts. Whatifi, meanwhile, will provide access to the funds as well as investment guidance, said Monica Chandra,
Before investing, investors must fill out an investor profile via the Web, which takes about 15 minutes, Chandra said. The profiling process, which can be done from a PC in the branch or from home, and is designed to educate investors about diversification and build an allocation model that suits their risk tolerance. Investors have the option, after completing the profile, to invest any way they like, Chandra said.
"What weve dried to do is provide some investment education to people," she said. "What does risk mean? What would it mean to the portfolio allocation? Everybody preaches diversification, but nobody really tells you what it means. And nobody lets you do it with just 100 bucks in your pocket."
Marketplace Bank is a subsidiary of Canadian Imperial Bank of Commerce.