SAN FRANCISCO – Joey Windham used to have a stockbroker, but no longer. Instead he’s relied on a history professor, an accountant and a doctor who post their trades online.

Windham, the owner of a manufacturing company in Dallas, is part of a small but dedicated band of investors who have bid their brokers and financial advisers goodbye and have turned to the Internet to handle investment decisions themselves.

Do-it-yourself-investing websites, such as Covestor, kaChing and MarketRiders, hold particular appeal for people who are frustrated and fed up after two bear markets that lost them more money than they’ve made.

For these investors, the traditional brokerage model is broken. They want no part of actively managed mutual funds that disclose portfolio holdings only four times a year and charge high fees for mediocre results. Moreover, they feel boxed in: Many of them are wealthy by most standards, but don’t necessarily have a spare $250,000 that many independent money managers require to open an account.

On sites such as Covestor and kaChing, investment results and trading are transparent. You can copy the moves of both professionals and amateurs, or open a brokerage account and tag along with a chosen investor in model portfolios that automatically mirror trades within seconds of their execution.

“They put the performance up on the screen for everybody to look at, and there’s competition” among the investment managers, said Windham, who has put his money in a brokerage account with Covestor Investment Management, a service of Covestor.

“I love the competition factor,” Windham added. “Plus, they have to invest their own money. That’s a real good idea to me. It would seem to me that they’ll be more disciplined about the research and a lot less likely to promote a product.”

Access to managers — individual or institutional — can be pricey. Fees on a $10,000 account range between $75 a year for a low-maintenance exchange-traded fund portfolio to as much as $230 for a specialized opportunistic strategy where the manager trades frequently. Trading costs are separate.

Most of the model managers require a minimum investment of $5,000 and charge about 1.5 percent. That’s comparable to an actively managed diversified U.S. stock fund, where fees average about 1.4 percent.

The investment minimum for kaChing is $3,000, which opens the door to a mix of about 15 individual and professional investors, though the site is emphasizing the latter. “People want access to professionals, not amateurs,” said kaChing’s CEO Andy Rachleff.


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