I wish the US had something better than Plaid to track various account balances. That’s all I use Wealthfront for, now UBS owns all the data and has my logins.
Check out https://www.kubera.com/
UBS Acquires Wealthfront for $1.4B
231–240 of 330 posts
Re: UBS Acquires Wealthfront for $1.4B
#232A 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 ex…
Tax loss harvesting alone has more than paid the 25 bps fee that Wealthfront charges. It's a no-brainer to me. I'm very happy with Wealthfront.
Re: UBS Acquires Wealthfront for $1.4B
#233Earlier quoted context omitted.
But why go with wealthfront when you can buy a target date fund from vanguard? It gets you most of what you really need?
Even a few months ago, I was recommending the same to friends. But late in 2021, Vanguard unexpectedly hit all their Target Date funds with large tax bills: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=366566 The speculation online is that it's because they lowered the minimum for their institution class funds, many large employer retirement funds sold their holdings of the non-institution funds, leaving eve…
OK I see they do this every 5 years so it should not be that extreme (I only hold it in various tax sheltered accounts now).
One step further is to hold the index funds and bonds yourself, that is not exactly rocket science.
I would also say that if you have 6 million USD that is a bit different than most wealthfront customers I think.
Re: UBS Acquires Wealthfront for $1.4B
#234I'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…
My experience was that robo-investors are great until you need something special. Then they can become rather painful.
Exmaple: I got divorced last year. Betterment took weeks of time and many phones calls until they were able to figure out a way to divide our assets evenly, without a large difference in cost basis. Their automatic algorithm for dividing accounts just didn't know how to handle it.
If UBS figures out how to offer a higher level of service on top of robo-advising, that could be a real win.
Re: UBS Acquires Wealthfront for $1.4B
#235Earlier quoted context omitted.
Setting aside whether TLH is saving money or simply borrowing it from future tax liabilities, how much is 3k in capital losses worth to you? At what point does the 0.25 expense ratio cost more than the benefit to you? By my calculations, the breakeven AUM is around $240k, assuming you always have 3k cap gains to offset.
It’s more of an argument for how lots of individual holdings could beat an ETF, in USA anyway. If your commissions are free anyway. Lots of paperwork tho. For all I know, these robo-advisers just buy you ETFs.
I believe the discussion is about what Wealthfront is doing to earn their 0.25% fee. "Tax loss harvesting" seems unpersuasive.
Re: UBS Acquires Wealthfront for $1.4B
#236I'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…
I agree that robo-advisors are great, but they do leave a lot to be desired. I’m actively working on a service that would drastically change the way people engage with robo-advisory accounts.
I for one prefer to make stock selections on my own, however Wealthfront, Betterment, and Personal Capital do not allow me to manage my own investments with any of the robo-advisory features. There is a huge opportunity in the space.
It would be great to talk to you about it - I’d love to hear your thoughts - any way we can connect?
Re: UBS Acquires Wealthfront for $1.4B
#237Earlier quoted context omitted.
Ok, but even if you pick an equivalently risky proposition with a robo adviser you’d inherently make less money due to the fee differential. Furthermore if robo advisers really could make more money on a risk adjusted basis it would literally make them more money to use their own service than to sell it.
Why does Vanguard sell you ETFs instead of keeping them for themselves?
Vanguard is not famous for actively managed funds.
Re: UBS Acquires Wealthfront for $1.4B
#238Earlier quoted context omitted.
>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-o…
It really does. Here's the IRS ruling on this.
Re: UBS Acquires Wealthfront for $1.4B
#239I'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…
I agree that robo-advisors are great, but they do leave a lot to be desired. I’m actively working on a service that would drastically change the way people engage with robo-advisory accounts. I for one prefer to make stock selections on my own, however Wealthfront, Betterment, and Personal Capital do not allow me to manage my own investments with any of the robo-advisory features. There is a huge opportunity in the s…
sure - dm me on twitter
https://twitter.com/lzrscg
Re: UBS Acquires Wealthfront for $1.4B
#240Earlier quoted context omitted.
I know someone who's been doing wealth management for like 20 or 30 years now. Based on what they've told me, I'd separate clients roughly into 3 categories: 1. people who don't want to think about it - they pay for everything to be taken care of properly 2. people who want to be wined and dined - they end up paying to be taken out to dinner a few times a year and hear about what the firm is doing to survive bear mar…
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…
If you have planned to contribute $500K then presumably your plan involves making the money liquid with the necessary few days anticipation.
Also, my Wealthfront account is offering me approximately 25% "Available to borrow". I haven't tried it yet but I assume I could grab that immediately and then sell stock to pay back the loan.
I'm not challenging your claim that having a human financial advisor can be useful. I'm sure you're right; I just didn't think your points against the robo service were very strong.