Sometimes, off-the-rack is just what you need, especially when it comes to basic, plain-vanilla investment portfolios.It’s not like every pre-retiree has to reinvent the wheel when it comes to assembling an investment plan; there’s wide agreement about what that plan looks like. It’s a mix of stocks and bonds, acquired at low cost, that is rebalanced regularly. It tilts toward stocks when workers are younger and moves toward bonds as they age.And that “at low cost” is a key part of the equation. A one percent asset-management fee on a $100,000 portfolio will cost the owner $161,077 over 30 years. If she retires and tries to draw four percent of her portfolio a year, she’ll be able to take out $1,770 a month instead of the $2,307 per month she’d have available if she saved that one percent fee and did her own investing.Put that together with the kinds of investment practices and strategies made possible by new technologies, and it’s no wonder more investors are turning to automated and self-directed approaches to their investments.A number of companies have cropped up in recent years to serve that DIY cohort. Some names are Folio Investing, MarketRiders, Flat Fee Portfolios, Betterment and WealthFront. They offer a variety of automated or self-directed Internet-based investment options, usually at fixed or low cost. (For comparison details about these companies, see my piece on the Reuters Wealth blog, http://blogs.reuters.com/reuters-wealth/2011/06/08/diy-investing-gets-more-sophisticated/)“The idea is really good,” says Sophie Schmitt, an analyst with research firm Aite Group. “It seems cost-effective compared to what a financial adviser would charge you.”But she said consumers will have to question how their money is actually invested, and that the whole area will have competition from traditional brokers like Merrill Lynch and discounters like Charles Schwab.“It’s definitely new terrain and one or two will make it,” Schmitt says.So far, it’s a very small space. Assets invested in online pre-packaged portfolio sites have been put at slightly more than $3 billion. That’s not even a blip in an investment marketplace of around $13 trillion, she said.But both advisers and individual investors are finding their ways to these sites. “I’m always looking for alternative ways to invest,” says San Francisco orthodontist Scott Lebus, who uses investment newsletters for advice and invests and trades at FolioInvesting.com, which charges a flat $290 a year and creates pre-mixed portfolios of individual stocks.“It’s like free mutual funds,” Lebus said. “Why pay a money manager?”Even some money managers are using these sites to save their clients trading and fund management fees. John Gay, a Frisco, Texas, financial adviser, switched his business from traditional money management to a flat-fee advisory service. He charges most of his clients between $3,000 and $5,000 a year for investment advice, and then has them place the buy and sell orders at FolioInvesting.com.These sites are promising for DIY investors as well as those who use advisers and want more control and lower fees. But before opening an account, it’s worth considering these issues.l Performance is important, but not always easy to measure. If you want to buy an off-the-shelf portfolio, you should be able to benchmark it against comparable investments.l You may still want advice. Some of these companies offer advice, some don’t. Choosing the right portfolio, and knowing how much of your assets to put into it still requires judgment. If you’re going to add an advice component on top of your trading costs, you’ll have to evaluate the cost and performance of that adviser, too.l Just because it’s automated and DIY, doesn’t mean it’s cheap. A flat fee could be very economical on a million dollar portfolio; if you’re only investing $50,000, it extracts a much higher percentage.l Safety is the most important piece. Most of these sites are in fact brokerage firms. In a post-Madoff world (and even before), you want to make sure your money and securities are held by a bona-fide SIPC-backed custodian.Linda Stern can be reached at linda.stern[AT]thomsonreuters.com.