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UBS Acquires Wealthfront for $1.4B

reuters.com

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Re: UBS Acquires Wealthfront for $1.4B

#91

Post by JumpCrisscross »

TuringNYC wrote: post #57
JumpCrisscross wrote: post #38

Earlier quoted context omitted.

> Why the heck isnt JPMChase buying one of these platforms?!? ]] Broadly speaking, the retail market can be segmented on two axes: net worth and involvement. Low net worth, high involvement are day traders: they are profitable through fees, PFOF, et cetera . High net worth, high involvement doesn’t tend to exist long enough to specialise in; they’re, professionals, have better things to do or lose their money. Low ne…

>> The actual third category participants, to a large degree, don’t need much more than was available in 1993, or at least are savvy enough not to find themselves paying for it. I'd disagree with this. In 1993, you couldnt do fractional shares, or auto-invest, or pie-based investments. In 1993, you couldnt purcahse $500/wk of BRKB/AMZN/TSLA because there was no product like that short of paying a mutual fund 150bps.…

> In 1993, you couldnt do fractional shares, or auto-invest, or pie-based investments. In 1993, you couldnt purcahse $500/wk of BRKB/AMZN/TSLA because there was no product like that short of paying a mutual fund 150bps. You couldnt tax-loss harvest (like with WealthFront)

Fractional shares are a day-trading tool. Apart from that, yes, you're citing real innovations. (Others include a dramatic reduction in trading costs and ETFs.) To the broader point, none those are unique (any more) to the robo-advisers.

Re: UBS Acquires Wealthfront for $1.4B

#92

Post by brokensegue »

lotsofpulp wrote: post #84
zefhous wrote: post #79

Earlier quoted context omitted.

I mean that’s literally where the money ends up anyway. I have a small amount in Wealthfront to check it out. With my “10/10” risk allocation, my money is all in vanguard funds. 45% VTI 20% VEA 19% VWO 14% VIG 2% VETB They do also offer some services such as “tax loss harvesting” that you can’t really do on your own, but I don’t really know if it’s worth their fee. Really, I think one of the best investing strategies…

You do not even have to hold a variety of Vanguard funds, just figure out the year you aim to retire in and buy the target date retirement fund. https://investor.vanguard.com/investment-products/mutual-fun...

this is a fine approach. but you can beat it because of tax/fee reasons

Re: UBS Acquires Wealthfront for $1.4B

#93

Post by hedora »

endisneigh wrote: post #58
Scoundreller wrote: post #23

Earlier quoted context omitted.

One US strategy that can beat ETFs is the part where the first $3k in capital losses per year can be applied against income. So if you owned every stock in the index directly, one could cycle the losers around a bit (there will be at least some each year) to maximize this write off against income.

This doesn’t do what you think it does. It’s tantamount to timing the market which generally is a losing strategy. Not sure if you’re being sarcastic Tax loss harvesting really only works in the long run if you know which stocks won’t recover.

Their computer sells stuff and then buys stocks that are heavily correlated to the sold stock.

Later, it unwinds the imbalance to avoid realized gains and wash sales. Doing that without impacting long-term returns is one of their biggest value adds.

Re: UBS Acquires Wealthfront for $1.4B

#94

Post by im_asl »

tennis_sort wrote: post #54
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"…

JPM have just made a $12b investment to fix that: https://www.jpmorganchase.com/news-stories/tech-investment-c... I'm aware that these investments often go south. I've seen HSBC's foray into "Fintech" and it was rough.

That's their annual tech spend. Most of that goes to keeping the lights on. Not a lot of innovation.

Re: UBS Acquires Wealthfront for $1.4B

#95

Post by JackFr »

TuringNYC wrote: post #57
JumpCrisscross wrote: post #38

Earlier quoted context omitted.

> Why the heck isnt JPMChase buying one of these platforms?!? ]] Broadly speaking, the retail market can be segmented on two axes: net worth and involvement. Low net worth, high involvement are day traders: they are profitable through fees, PFOF, et cetera . High net worth, high involvement doesn’t tend to exist long enough to specialise in; they’re, professionals, have better things to do or lose their money. Low ne…

>> The actual third category participants, to a large degree, don’t need much more than was available in 1993, or at least are savvy enough not to find themselves paying for it. I'd disagree with this. In 1993, you couldnt do fractional shares, or auto-invest, or pie-based investments. In 1993, you couldnt purcahse $500/wk of BRKB/AMZN/TSLA because there was no product like that short of paying a mutual fund 150bps.…

In 1993 the NYSE still quoted prices in 1/8's, and if you wanted to get a quote you either had to own a Quotron or call your broker.

Re: UBS Acquires Wealthfront for $1.4B

#96

Post by [deleted] »

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…

[deleted]

Re: UBS Acquires Wealthfront for $1.4B

#97

Post by TuringNYC »

Spooky23 wrote: post #68
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"…

They can’t compete at scale for small potato clients. They want high net worth people to work with a guy. Ie the stereotypical dentist. Honestly it’s probably a good thing. Chase is pretty awful at basic retail banking. Really only makes sense if you live in Manhattan or something where there are like 3 mega banks in every corner.

I'm surprised to hear this take. I find Chase to be the best bank I've ever worked with -- personal accounts, business accounts, everything. Customer service is top notch. Website is great. I'd love to hear your choices for a top retail bank.

Yes, i'm in the NY area, so true on branch location issue. But how often do you have to visit a branch if you have good systems? The branch is usually for when systems fail.

Not the best lending bank, and def not the best investment platform. I'm not sure why they cant be all three (organic or m&a) given the high synergy.

Re: UBS Acquires Wealthfront for $1.4B

#98

Post by Scoundreller »

blobbers wrote: post #85
endisneigh wrote: post #58

Earlier quoted context omitted.

This doesn’t do what you think it does. It’s tantamount to timing the market which generally is a losing strategy. Not sure if you’re being sarcastic Tax loss harvesting really only works in the long run if you know which stocks won’t recover.

You can do it using basket ETFs. The IRS doesn't consider them "exact" replicas. So if VOO drops, you can harvest using SPY and maintain the same exposure, then switch back to VOO a month + few days later.

It gets harder to pull that off once you’re a long-term holder

Re: UBS Acquires Wealthfront for $1.4B

#99

Post by myth_drannon »

propter_hoc wrote: post #15

Super interesting. Wealthfront has approximately $27 billion USD in AUM according to this article [0]. Meanwhile the leading robo-advisor in Canada, WealthSimple recently raised funds at a $5 billion CAD valuation, on a $7.7 billion USD AUM [1]. I have felt for a while like the robo-advisory market is in roadrunner mode - has run past the edge of the cliff but hasn't quite yet fallen. Maybe this is the first sign tha…

Well it's not robo-advisor anymore. It's also crypto, stock trading (copying Robinhood) and tax preparation.

Re: UBS Acquires Wealthfront for $1.4B

#100

Post by im_asl »

msoad wrote: post #4
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.

Did anyone get any real beta out of it for a sustainable period?

*Alpha
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