UBS Acquires Wealthfront for $1.4B • Hacker News Board

Re: UBS Acquires Wealthfront for $1.4B

#41

Post by endisneigh » Wed, Jan 26, 2022, 5:55 PM UTC

Beaver117 wrote: post #36

endisneigh wrote: post #6

How much better has wealth front done vs SPY, fee adjusted? Imho all robo advisers are a waste of money. If they were actually effective they’d use their own services themselves as opposed to sell them to retail. The latest crop of businesses really are marketing value adds. See: https://longbets.org/362/ Other people have done similar bets and they all lose on a risk adjusted, fee adjusted basis.

The tax savings I get from them is much more than the annual fee. I converted the portfolio to 100% US stocks btw. Sure I can harvest losses myself but that introduces emotion and watching the market carefully.

Don’t understand this. The tax savings only come from realized loses. In the long run SPY will likely best that including your “savings”.

Re: UBS Acquires Wealthfront for $1.4B

#42

Post by pyrrhotech » Wed, Jan 26, 2022, 5:55 PM UTC

Interesting, the figure does seem quite low to me. Boglehead passive investing has worked really well for the past dozen years. I expect the next 10-15 to be much more challenging given the extremely high starting valuations and end of the low interest rate and QE tailwind. I've been building algotrading models to help tackle the challenge of when to hedge at https://grizzlybulls.com

Re: UBS Acquires Wealthfront for $1.4B

#43

Post by knappe » Wed, Jan 26, 2022, 5:55 PM UTC

all2 wrote: post #27

lotsofpulp wrote: post #16

Earlier quoted context omitted.

Is there really that much utility in automating that? It takes a few clicks to move money from a checking account in Schwab/Fidelity to a target date fund or index ETF.

I have to remember to do those few clicks, though.

Vanguard allows you to set up automated withdraws that are invested into specific funds, with one caveat:

`It’s important to note that you can only automate investments into Vanguard mutual funds.`

https://support.vanguard.com/tutorials/automatic-investments

Re: UBS Acquires Wealthfront for $1.4B

#44

Post by [deleted] » Wed, Jan 26, 2022, 5:55 PM UTC

endisneigh wrote: post #18

cheonic8492 wrote: post #13

Earlier quoted context omitted.

> Imho all robo advisers are a waste of money. Robo and human financial advisors provide emotional hand-holding and comfort. Same reason why you trust a doctor, despite doctors underperforming (intelligent) self-directed health and nutrition research.

> Same reason why you trust a doctor, despite doctors underperforming (intelligent) self-directed health and nutrition research. I’m skeptical of this claim. What’s “intelligent” research mean? Index funds are literally sit it and forget it. Even easier than robo advisers. With year retirement funds you even get auto balancing with the same ease.

[deleted]

Re: UBS Acquires Wealthfront for $1.4B

#45

Post by prepend » Wed, Jan 26, 2022, 5:55 PM UTC

blobbers wrote: post #2

A lot of you likely invest in a boglehead style. Wealthfront was an attempt to automate that while adding some bells and whistles on top; tax loss harvesting, smart beta, etc. Curious to see how they succeed as part of UBS. I thought Marcus/Goldman was going to buy them personally, so a bit surprised UBS is getting in on this game.

When I looked at it the fees were way to high to justify to bogelheads.

What is strange to me about robo advisors is that they are still charging a management fee instead of a flat fee. The algorithms are really basic and don’t have any real time changes so it seems weird to charge 25-50 basis points for what’s basically just an interview and time based rebalancing with some formulas that aren’t really better than existing ETFs.

I’ve been expecting this to just be a feature for vanguard and fidelity since the “advise” could just be client side automation rules that nobody wants to build.

Re: UBS Acquires Wealthfront for $1.4B

#46

Post by bwbmr » Wed, Jan 26, 2022, 5:56 PM UTC

dartdartdart wrote: post #12

Anyone know of any other product offer that will take excess after direct deposit and invest it for you? I've called Fidelity and Betterment and both do not offer an automated way like wealthfront does. Really sad to see wealthfront being the only player in that space. Edit: by automated I mean something like "everything over $10k after bills, invest". It takes a couple of clicks per month manually, but it's been pre…

Betterment had that until a month ago: "Two-Way Cash Sweep", though that swept into their cash reserve account, not the investment accounts. They said that less than 1% of users had it enabled, and so discontinued it.

Re: UBS Acquires Wealthfront for $1.4B

#47

Post by jonas21 » Wed, Jan 26, 2022, 5:56 PM UTC

2bitencryption wrote: post #17

really interesting takeaways from the Wealthfront landing page[0]: * every example is shown as a smartphone app - not a single "desktop-oriented" screenshot to be found. I guess we are finished with the days where every service has an app. Now, every service is an app. * In the first example, an investment portfolio is shown where roughly 10% of the holdings is in a group called "single stock bets." Yikes! Though may…

> In the first example, an investment portfolio is shown where roughly 10% of the holdings is in a group called "single stock bets." Yikes!

That's 10% of the entire portfolio spread out over (presumably) multiple individual stocks, which seems reasonable to me... is it not?

Re: UBS Acquires Wealthfront for $1.4B

#48

Post by bdonlan » Wed, Jan 26, 2022, 5:56 PM UTC

Scoundreller wrote: post #28

2bitencryption wrote: post #17

really interesting takeaways from the Wealthfront landing page[0]: * every example is shown as a smartphone app - not a single "desktop-oriented" screenshot to be found. I guess we are finished with the days where every service has an app. Now, every service is an app. * In the first example, an investment portfolio is shown where roughly 10% of the holdings is in a group called "single stock bets." Yikes! Though may…

> lots of emphasis on "emerging markets", "socially responsible funds", crypto They love these stocks because they usually have a big short interest. The broker can lend them out and keep the profits for themself. Only IKBR does some sharing of securities lending profits.

Fidelity also has a fully-paid securities lending offering, and I believe Ally Invest does as well. It's not just IBKR.

Re: UBS Acquires Wealthfront for $1.4B

#49

Post by somethoughts » Wed, Jan 26, 2022, 5:56 PM UTC

2bitencryption wrote: post #17

really interesting takeaways from the Wealthfront landing page[0]: * every example is shown as a smartphone app - not a single "desktop-oriented" screenshot to be found. I guess we are finished with the days where every service has an app. Now, every service is an app. * In the first example, an investment portfolio is shown where roughly 10% of the holdings is in a group called "single stock bets." Yikes! Though may…

Maybe they were trying to differentiate themselves from the offerings of a potential acquirer and prepping themselves for aquisition - particularly perhaps once they realized they weren't going to be able to beat the legacy banks.

Re: UBS Acquires Wealthfront for $1.4B

#50

Post by TuringNYC » Wed, Jan 26, 2022, 5:56 PM UTC

somethoughts wrote: post #25

TuringNYC wrote: post #5

I'm honestly shocked at how primitive the big firms' offerings are. For example, JPMChase's bank account is smart enough to see a payroll deposit and give you a comment modal suggesting that you invest the money with JPM's investment platform (YouInvest/whatever) Log into the investment platform and you're back in 1993. They literally have no drip-investment style offering. They want to charge you 100bps to "manage"…

I suspect you are on to something. Maybe they were waiting for valuations to return to earth? The make versus buy decision was much harder when these platforms were richly valued. I could a lot of acquisitions in the coming months as capital moves out of growth at all costs fintech space and startups need a lifeline.

I think the "build" can be considered a clear failure at this point, it would take 10min on the JPM "platform" to see that. Not acquiring ShareBuilder was a major loss, especially given that CapitalOne purchased ShareBuilder, took the customers, and killed the platform. Not sure why the platform couldnt have been spun off to JPM (?except perhaps competition?)

GS purchased FolioFN, which was a lesser player, but still a decent platform. JPM is going to have to gulp down M1 Finance and pay for being so slow to the acquisition game Online brokerages selling order flow are very profitable, so even the "buy" decision seems like a no-brainer given the obvious monetization route. DRIP-style investment is even stickier -- you set it and forget it. Make it part of the Premier/Sapphire tiers and people dont want to move at all.