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What's The End Goal for Wealthfront and Betterment? (2016)

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Re: What's The End Goal for Wealthfront and Betterment? (2016)

#11

Post by Ductapemaster »

toomuchtodo wrote: post #10
mfrykman wrote: post #6

In the article, it states that Chase is offering 0% funds, yet Betterment claims that their "All-in Actual Cost" for a 100k fund is better than Chase's due to cash drag and a lower expense ratio. (Found here: https://www.betterment.com/comparison/schwab-intelligent-por... ) This is confusing and hard to fact check. Who do I believe?

Neither option is better than a Vanguard account with one of their target date funds (or funds targeted by level of aggressiveness). Vanguard is a mutual company; they exist for the benefit of their users. Hard to compete against that. Disclaimer: moved from Betterment to Vanguard

Could you explain a bit more? Are you making a better ROI? I currently have a Betterment account and would consider switching if there's a good reason.

Re: What's The End Goal for Wealthfront and Betterment? (2016)

#12

Post by kobeya »

Ductapemaster wrote: post #11
toomuchtodo wrote: post #10

Earlier quoted context omitted.

Neither option is better than a Vanguard account with one of their target date funds (or funds targeted by level of aggressiveness). Vanguard is a mutual company; they exist for the benefit of their users. Hard to compete against that. Disclaimer: moved from Betterment to Vanguard

Could you explain a bit more? Are you making a better ROI? I currently have a Betterment account and would consider switching if there's a good reason.

I would be very surprised if either wealth front or betterment has better ROI than Vanguard. One exists for the purpose of sucking you dry, the other is a mutually owned cooperative with a mission to drive down costs and a history of doing so. Unfortunately as far as I'm aware wealthfront and betterment don't provide aggregate performance information (although if it were in their favor I'm sure they would).

Re: What's The End Goal for Wealthfront and Betterment? (2016)

#13

Post by nateberkopec »

I haven't switched to a roboadvisor product for a few reasons, but one of them is that saving for retirement is a decision you make on a 30+ year timeline. Most startups hardly last 3 years, much less 30. Why would I trust my money to an industry where the typical case is a flameout in only a few years?

Re: What's The End Goal for Wealthfront and Betterment? (2016)

#14

Post by axxl »

toomuchtodo wrote: post #10
mfrykman wrote: post #6

In the article, it states that Chase is offering 0% funds, yet Betterment claims that their "All-in Actual Cost" for a 100k fund is better than Chase's due to cash drag and a lower expense ratio. (Found here: https://www.betterment.com/comparison/schwab-intelligent-por... ) This is confusing and hard to fact check. Who do I believe?

Neither option is better than a Vanguard account with one of their target date funds (or funds targeted by level of aggressiveness). Vanguard is a mutual company; they exist for the benefit of their users. Hard to compete against that. Disclaimer: moved from Betterment to Vanguard

What are the fees on those?

Edit: looked it up, the 2050 is 0.16%, not bad. I usually see much higher fees on those target date funds.

Re: What's The End Goal for Wealthfront and Betterment? (2016)

#15

Post by toomuchtodo »

Ductapemaster wrote: post #11
toomuchtodo wrote: post #10

Earlier quoted context omitted.

Neither option is better than a Vanguard account with one of their target date funds (or funds targeted by level of aggressiveness). Vanguard is a mutual company; they exist for the benefit of their users. Hard to compete against that. Disclaimer: moved from Betterment to Vanguard

Could you explain a bit more? Are you making a better ROI? I currently have a Betterment account and would consider switching if there's a good reason.

Betterment weights more heavily towards international allocations, so my returns have been lower than a fund more US-centric. That's not why I moved though; Betterment just raised their fees, which were somewhat acceptable before (0.15% of assets under management) but are now out of line with the value they provide (0.25%).

Those fees were on top of the ETF fees for the funds they assembled your portfolio with.

Re: What's The End Goal for Wealthfront and Betterment? (2016)

#16

Post by sigstoat »

axxl wrote: post #14
toomuchtodo wrote: post #10

Earlier quoted context omitted.

Neither option is better than a Vanguard account with one of their target date funds (or funds targeted by level of aggressiveness). Vanguard is a mutual company; they exist for the benefit of their users. Hard to compete against that. Disclaimer: moved from Betterment to Vanguard

What are the fees on those? Edit: looked it up, the 2050 is 0.16%, not bad. I usually see much higher fees on those target date funds.

if you're willing to handle the allocation yourself, you can just see what vanguard is putting into their 20xx fund, and buy the corresponding funds as ETFs (or their admiral shares funds if you've got enough money in there) and get even lower expense ratios.

as a general note, anyone interested in this should take a look at the bogleheads site, starting with their wiki: https://www.bogleheads.org/wiki/Main_Page

Re: What's The End Goal for Wealthfront and Betterment? (2016)

#18

Post by twblalock »

aphextron wrote: post #17

I tried out these services, and it just freaks me out too much having $50,000 sitting in an iPhone app. I get that they are insured and legit, but it's just too much money for me to hand over to a startup.

Don't you have a broker, or a 401k?

Re: What's The End Goal for Wealthfront and Betterment? (2016)

#19

Post by [deleted] »

sigstoat wrote: post #16
axxl wrote: post #14

Earlier quoted context omitted.

What are the fees on those? Edit: looked it up, the 2050 is 0.16%, not bad. I usually see much higher fees on those target date funds.

if you're willing to handle the allocation yourself, you can just see what vanguard is putting into their 20xx fund, and buy the corresponding funds as ETFs (or their admiral shares funds if you've got enough money in there) and get even lower expense ratios. as a general note, anyone interested in this should take a look at the bogleheads site, starting with their wiki: https://www.bogleheads.org/wiki/Main_Page

[deleted]

Re: What's The End Goal for Wealthfront and Betterment? (2016)

#20

Post by aphextron »

twblalock wrote: post #18
aphextron wrote: post #17

I tried out these services, and it just freaks me out too much having $50,000 sitting in an iPhone app. I get that they are insured and legit, but it's just too much money for me to hand over to a startup.

Don't you have a broker, or a 401k?

Yes, I have Vanguard but decided to give Betterment a try when they first launched.
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