Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

UBS Acquires Wealthfront for $1.4B

reuters.com

Post reply on HN
Print view View original

191–200 of 330 posts

Re: UBS Acquires Wealthfront for $1.4B

#191

Post by zie »

lzrs wrote: post #131

I've been researching robo-advisors quite a bit recently. They are really interesting and innovative. I'll preface by saying that I have been talking to a lot of financial planners (at top-tier institutions). They basically set you up with a good set of ETFs, hedge funds, etc. and rebalance occasionally. Sometimes they do tax-loss harvesting. They also provide a few other nice little services. But at the end of the d…

   * Edward Jones will do it for you for ~ 2%/yr, which is ridiculously high.

   * Any of the big banks or brokerages will do it for less than Edward Jones.

   * Almost any financial advisor will do it for about 1%/yr in fees(not ridiculously high, but not remotely cheap) or fee-based for a few hundred an hour with a 1st time setup of $4-10k, more than $10k is unreasonable.

   * The robo advisors(of which their are dozens with basically identical products, generally charge 0.3%/yr, some like Vanguard include Financial Advisor services.

   * At least one firm will do it for $200 first year and $100/yr after that, regardless of the balance of your accounts, and provide financial & tax planning/advice/etc included. They do require a little work on your part. I'm actively looking for more subscription based advisors like this, please PM me!

   * Bogleheads.org will do it for free as long as you follow their template.

Re: UBS Acquires Wealthfront for $1.4B

#192

Post by bt3 »

My first experience with Wealthfront was an IRA. After a short period (Nonetheless (forgive the plug), I ended up building a simple app that would help me automate the thinking of balancing my portfolio. Here's an example using a Wealthfront-genereated portfolio (ETFs + targets): https://correctmyportfolio.com/scenario/share/YISu5jI3

Turns out figuring out where to optimize a portfolio to a target without selling, or other rules (like sell thresholds, cash buffers, etc.) is a bit more complicated than Excel would allow.

Re: UBS Acquires Wealthfront for $1.4B

#193

Post by zie »

subsubzero wrote: post #89

Back in 2015 I put some of my money into wealthfront, despite the market doing well at the time, my wealthfont fund which was heavily stock balanced did somewhat poorly. This was over a year's time so not short lived by any means. I pulled my money out and invested into stocks I chose and never looked back(typically get 10-15% returns a year). I would like to hear other people's perspectives about how their wealthfro…

> This was over a year's time so not short lived by any means.

1 year of investment data is useless. An investor will be invested for their lifetime, we barely have decent data for 1 investor's invested lifetime(about 50 years). A decade comparison is arguably the bare minimum, you really want 20 years, as investments tend to be cyclical by a decade or so.

Re: UBS Acquires Wealthfront for $1.4B

#194

Post by throwawaygh »

colordrops wrote: post #183
lzrs wrote: post #131

I've been researching robo-advisors quite a bit recently. They are really interesting and innovative. I'll preface by saying that I have been talking to a lot of financial planners (at top-tier institutions). They basically set you up with a good set of ETFs, hedge funds, etc. and rebalance occasionally. Sometimes they do tax-loss harvesting. They also provide a few other nice little services. But at the end of the d…

Does Fidelity have robo-advising? Because all the big companies I've worked at use them for retirement funds, and I've found most of the management is heavily manual at Fidelity.

https://www.fidelity.com/digital-investing-and-advice/simple...

Re: UBS Acquires Wealthfront for $1.4B

#195

Post by xxpor »

pinkfairy wrote: post #176
lzrs wrote: post #131

I've been researching robo-advisors quite a bit recently. They are really interesting and innovative. I'll preface by saying that I have been talking to a lot of financial planners (at top-tier institutions). They basically set you up with a good set of ETFs, hedge funds, etc. and rebalance occasionally. Sometimes they do tax-loss harvesting. They also provide a few other nice little services. But at the end of the d…

This reads like an ad? Curious why you would need to coordinate trades been taxable and retirement accounts? Why would you want smart beta (that's active management)? Their direct indexing portfolio also includes a whole bunch of their own in-house risk parity garbage products that carry high fees The biggest question to me, you can trade ETFs for free now, why do you need wealthfront at all?

>Curious why you would need to coordinate trades been taxable and retirement accounts?

If you treat your retirement and taxable accounts as one big pot of money, you want to place assets to take the most advantage of the retirement account. For example, they mentioned bonds. Since yield on bonds is taxable at income tax levels every year, you want to prefer holding them in the tax exempt account.

Another reason is because of tax loss harvesting. To make that work, you have to avoid wash sales. The wash sale rule applies to you and every account you own, taxable, retirement, across brokers, etc. So to make TLH work, the broker needs to have a complete view.

>The biggest question to me, you can trade ETFs for free now, why do you need wealthfront at all?

For me, I'm on the west coast, so the market is open from 6:30 AM to 1 PM. I can't really monitor it nearly as closely as I'd really prefer. Looking at my betterment history, last year they automated 275 transactions for me. I can really only be bothered to look at the account once a month or so. Do the efficiency gains from a lower drift get me 0.25% additional value? Hard to say, but probably not. However, TLH absolutely has. I wouldn't trust myself to track that properly at all.

Re: UBS Acquires Wealthfront for $1.4B

#196

Post by _clhx »

Beaver117 wrote: post #134
akashshah87 wrote: post #132

Earlier quoted context omitted.

If you had put money in VTSAX on 1/26/2017 and reinvested dividends, you would be up 101.91% with an annualized return of 15%

That's not the same. Money doesn't just appear all at once ready to dump on the market, we get and invest it every paycheck. So average cost basis over time gets higher as you make purchases

annualized return is annualized return, his strategy gave him if you look at SPX returns over the last four years, 2018 was a negative year but each year after was between 16% and 28%. also 2017 was over 19%.

Re: UBS Acquires Wealthfront for $1.4B

#197

Post by dnadler »

borski wrote: post #188
onphonenow wrote: post #166

Earlier quoted context omitted.

The wined and dined people also often really don't want to deal with a website and they want someone to call who can "get things done" if needed. So for wealthfront and friends, let's say a family member is closing on a property purchase. You said you'd put in $500K. Closing comes and you try to wire the money over. But wait, it doesn't work. 1) First you have to sell investments 2) Trades have to SETTLE (T+2 or more…

This is honestly a huge deal - when I make an angel investment, I send a text and/or wire info via the Merrill Lynch app, and I know it will be taken care of (by the same people every time) same day or next day, depending on when I send it. That plus introductions and referrals to tax accountants, estate attorneys, etc., and access to investment vehicles I otherwise wouldn’t get (easily), definitely makes the 0.7% fe…

This is very interesting to me. I've been working on a retirement calculator in my free time as a hobby project for a while [1], but it never really occurred to me that there is real value in allowing people to do the 'what-if' analysis more easily. It seems obvious now...

Could you see yourself using something like this if there was an easy way to compare different scenarios?

[1] https://lunchmodel.com/lmrc/scenario

Re: UBS Acquires Wealthfront for $1.4B

#198

Post by xxpor »

kmonsen wrote: post #155
lzrs wrote: post #131

I've been researching robo-advisors quite a bit recently. They are really interesting and innovative. I'll preface by saying that I have been talking to a lot of financial planners (at top-tier institutions). They basically set you up with a good set of ETFs, hedge funds, etc. and rebalance occasionally. Sometimes they do tax-loss harvesting. They also provide a few other nice little services. But at the end of the d…

But why go with wealthfront when you can buy a target date fund from vanguard? It gets you most of what you really need?

You can't split the assets in the target date fund to be tax efficient.

Re: UBS Acquires Wealthfront for $1.4B

#199

Post by dnadler »

colordrops wrote: post #183
lzrs wrote: post #131

I've been researching robo-advisors quite a bit recently. They are really interesting and innovative. I'll preface by saying that I have been talking to a lot of financial planners (at top-tier institutions). They basically set you up with a good set of ETFs, hedge funds, etc. and rebalance occasionally. Sometimes they do tax-loss harvesting. They also provide a few other nice little services. But at the end of the d…

Does Fidelity have robo-advising? Because all the big companies I've worked at use them for retirement funds, and I've found most of the management is heavily manual at Fidelity.

They do, it's called Fidelity Go. They have a similar product for advisors called AMP. I actually worked on these products a while ago, they're all very similar when it comes down to it.

Re: UBS Acquires Wealthfront for $1.4B

#200

Post by astrange »

xxpor wrote: post #195
pinkfairy wrote: post #176

Earlier quoted context omitted.

This reads like an ad? Curious why you would need to coordinate trades been taxable and retirement accounts? Why would you want smart beta (that's active management)? Their direct indexing portfolio also includes a whole bunch of their own in-house risk parity garbage products that carry high fees The biggest question to me, you can trade ETFs for free now, why do you need wealthfront at all?

>Curious why you would need to coordinate trades been taxable and retirement accounts? If you treat your retirement and taxable accounts as one big pot of money, you want to place assets to take the most advantage of the retirement account. For example, they mentioned bonds. Since yield on bonds is taxable at income tax levels every year, you want to prefer holding them in the tax exempt account. Another reason is be…

> Another reason is because of tax loss harvesting. To make that work, you have to avoid wash sales. The wash sale rule applies to you and every account you own, taxable, retirement, across brokers, etc. So to make TLH work, the broker needs to have a complete view.

It doesn't really. They like saying that because it shows off their product, but the IRS doesn't know what's in your retirement account and probably no-one has ever gotten in trouble for this. There are robos that don't coordinate it, even.

Post reply on HN