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UBS Acquires Wealthfront for $1.4B

reuters.com

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Re: UBS Acquires Wealthfront for $1.4B

#121

Post by TuringNYC »

JumpCrisscross wrote: post #113
TuringNYC wrote: post #105

Earlier quoted context omitted.

>> Fractional shares are a day-trading tool. Absolutely not, polar opposite. If i'm a buy-and-hold investor who wants to set-it-and-forget it invest auto every week, Fractional share purchase are the only real way to consistently purchase. How would you buy AMZN every pay period if a single share is more than your entire investment amount.

> How would you buy AMZN every pay period if a single share is more than your entire investment amount Most long-term, low-involvement investors wouldn't. They'd buy an ETF. The exertion of selection effect for Amazon versus the rest of the market is a high-involvement action.

Going back to the top level, JPM's investment site, as far as I can see, cannot even repeat-purchase an ETF.

Oh, and if they wanted to invest $300/pay period into the S&P 500, note that SPY is currently at 440. https://www.ssga.com/us/en/intermediary/etfs/funds/spdr-sp-5... so absent fractional shares, you cant...

And if you invest monthly, what do you do, buy 1 share (different amount per month)? Or do you just give up and go to Vanguard/Fidelity/etc? This is sort of my point, how is something as basic as repeat-invest not available on the world's biggest bank?

Re: UBS Acquires Wealthfront for $1.4B

#122

Post by ryanluker »

blobbers wrote: post #67
jmacd wrote: post #31

Earlier quoted context omitted.

Wealthsimple now has in house advisors who email and call you to discuss your account. There is nothing 'robo' about the business model anymore and instead they are just focused on growing AUM by talking to people and convincing them to move more of their savings/TFSA/RRSP over to them.

Speaking of TFSA/RRSPs etc. is there a canadian version of bogleheads we should know about?

https://canadiancouchpotato.com/ is my go to! They put out amazing content over the years and have a great set of model portfolios for those just getting into investing.

Re: UBS Acquires Wealthfront for $1.4B

#123

Post by liber8 »

dartdartdart wrote: post #69
liber8 wrote: post #59

Earlier quoted context omitted.

Maybe I'm misunderstanding, but nearly every bank I've ever used offers this feature. I currently have auto-transfers and auto-investments set up in Fidelity. If you receive a paycheck, you can easily set up Fidelity so that it automatically transfers $xxxx dollars per month to whatever account you like. You can also set up each account to automatically purchase $xxxx dollars worth of whatever equity you want.

Do you bank with fidelity to be able to do this?

I have a brokerage account at Fidelity, which I can write checks on, but I only use the account for investing. I guess theoretically you could use it as a primary bank account? I have some auto-transfers into the account each month, that automatically get invested, and some auto-transfers out to non-Fidelity accounts so I can invest proceeds in things Fidelity doesn't offer.

Re: UBS Acquires Wealthfront for $1.4B

#124

Post by dmix »

myth_drannon wrote: post #99
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.

And WealthSimple has a Venmo like Cash app (called Cash). They do way more than stocks.

Re: UBS Acquires Wealthfront for $1.4B

#125

Post by mindslight »

prepend wrote: post #63
Glyptodon wrote: post #24

Earlier quoted context omitted.

Tracking multiple account balances has gotten less easy as more accounts offer 2-factor. There really ought to be some kind of standard for granting scoped read-only data auth to authorized 3rd parties for financial info, but presumably every business wants to wall their gardens with delusions about consumers not having to work with multiple companies and backwards notions that friction keeps people in instead of dri…

I’ve been using a client based tool (Moneydance) for 10+ years and some banks did support special accounts that had read only access to ofx APIs. It was kind of nice as I didn’t have to worry about my passwords as much. It’s gotten worse over the years as banks have stopped support for open APIs. I guess because of plaid-type integrators that make custom interfaces. I’ll likely quit my bank (usaa) as they got rid of…

It feels like there should be some libre tool that automates downloading OFX through the web interfaces and keeps up with the breakage, at least for popular banks. Integrate with procmail and the like to deal with snake oil 2FA, etc.

Re: UBS Acquires Wealthfront for $1.4B

#126

Post by paxys »

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…

$27B and $8B AUM are both peanuts, and I imagine not a big factor in determining valuation for these robo-advisors. Corporations are likely more interested in the number of users, demographic breakdown (mostly well-off millennials), their financial data, credit profiles and upsell opportunities.

Re: UBS Acquires Wealthfront for $1.4B

#127

Post by cj »

endisneigh wrote: post #21
cj wrote: post #14

Earlier quoted context omitted.

> How much better has wealth front done vs SPY, fee adjusted? That comparison isn't really a good way to evaluate based on since it doesn't account for risk, only reward.

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.

Other than robo advisors, what service exists where I can schedule a weekly transfer and automatically invest across 6-8 asset classes? (Many 401k providers do this, but I’m not aware of any post-tax investment accounts other than robo advisors)

If there’s a single ETF that will do what Wealthfront and others are doing, I’d switch away in a heartbeat if the fees were lower.

Re: UBS Acquires Wealthfront for $1.4B

#128

Post by hedgehog »

Arcuru wrote: post #114
skeeter2020 wrote: post #101

Earlier quoted context omitted.

>> I pulled my money out and invested into stocks I chose and never looked back(typically get 10-15% returns a year) You must be one of: 1. lucky 2. a genius 3. a crook 4. haven't invested on a long enough timeframe.

Given the stock market returns over the last five years, it's definitely #4. Everybody invested in broad market index funds has been making those returns the last few years.

Depending on strategy you can do ok, I'm up over 20%/year going back 15ish years. There's certainly a lot of luck involved but also tolerance for volatility.

Re: UBS Acquires Wealthfront for $1.4B

#129

Post by alasdair_ »

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.

>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.

One of the benefits is tax-loss harvesting. (https://www.investopedia.com/terms/t/taxgainlossharvesting.a....) This is essentially free alpha. You can do it yourself but it's a pain to do correctly.

Re: UBS Acquires Wealthfront for $1.4B

#130

Post by whitej125 »

Wealthfront (and this goes for the rest of Wall Street) are analog businesses.

They thrive on mass producing a fixed set of products. Those products are ETFs, Mutual Funds... or in Wealthfront's case... a rebalancing strategy based on a 1960's white paper called Modern Portfolio Theory.

Each of these players spends a ton trying to mass market these products. You have financial advisors pitching mutual funds, asset managers shilling the virtue of their shiny new ESG ETFs... and robo-advisors all promising a set-it-and-forget-it panacea. Wealthfront got commoditized. Betterment at first... but then the discount brokers came in (Vanguard, Fidelity, etc) and just had a much more effective channel (advisors!) to the end investor. If you are just selling a singular product and that product is successful, you are going to get copied and beaten by competitors with better marketing channels.

Wall Street will some day transform from an analog industry of mass production to a digital one of mass personalization. The building blocks for said transformation are slowly becoming ubiquitous (fractional shares support, commission free trading, etc). Super excited to watch this happen.

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