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UBS Acquires Wealthfront for $1.4B

reuters.com

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Re: UBS Acquires Wealthfront for $1.4B

#161

Post by jcfrei »

lzrs wrote: post #147
mushufasa wrote: post #139

Earlier quoted context omitted.

Many people who start off with Robos like Wealthfront actually leave once their net worth rises and pay more for human advisors. If you need to invest a small/decent amount of money into stocks, Robos work wonderfully. It's a mass production angle -- good quality service at lower cost to many people; the Ford Model T of investing. Early robot just had a couple of investment options, and now there are more options but…

Yes, completely agree. That happens when all of the other estate planning costs begin to vastly outweigh the cost of investment advising. I'm no expert, but I am under the impression that although these automated strategies are a smaller part of the whole picture for high net-worth individuals, the strategies are still the same. I'm interested to see if UBS can add value in those ways you mentioned, while still using…

I doubt they'll add much value - they don't want to cannibalize their core business even more. They'll probably just add a button that says "talk to a UBS wealth manager" when your portfolio value crosses a certain threshold.

Re: UBS Acquires Wealthfront for $1.4B

#162

Post by blobbers »

pyrrhotech wrote: post #90
blobbers wrote: post #80

Earlier quoted context omitted.

Is your website built on some platform? Do you have any customers? How does your platinum plan work?

Website is built with NextJs. The models are all built with NodeJs--custom backtester framework, and the execution framework and data fetchers are also in Node and leverage a few open source libraries and currently only works with Interactive Brokers. We just launched mid December, and currently have 16 paying subscribers and 178 free members. MRR about $2500. The Platinum plan can be either implemented via API, emai…

This is a pretty regulated market. How did you set up the managed account?

Re: UBS Acquires Wealthfront for $1.4B

#163

Post by deathanatos »

whitej125 wrote: post #142
TuringNYC wrote: post #137

Earlier quoted context omitted.

>> Yes, a financial planner can do all of this (although most don't). But when they do, they just use automated software to do it. It would be impossible to implement these strategies manually. So why even go with a financial planner when Wealthfront does the same thing, but better/cheaper? Thats the 100$B question right? Because fear. Because unfamiliarity. Also because 1% seems small, but its really more like 14% (…

>> Because fear. What's funny is... whenever you call an FA (financial advisor) in a moment of panic... they answer always is "don't act emotionally and stick to the plan". Maybe a real "robo-advisor" should just be a chatbot that responds to any message it gets with "HODL". >> Because unfamiliarity. This one is going to be interesting to watch evolve and I see it becoming less of an edge for financial advisors. More…

> What's funny is... whenever you call an FA (financial advisor) in a moment of panic... they answer always is "don't act emotionally and stick to the plan". Maybe a real "robo-advisor" should just be a chatbot that responds to any message it gets with "HODL".

My robo-advisor did, during the giant tumble the markets took during the beginning of this pandemic, put up a message on the site & send a pro-active communication saying, essentially, to HODL. (In more eloquent terms, of course.) I presume a human had a hand in it, ofc., as they likely understood the fear most people would feel looking at the graph.

(My mistake, really, was not buying more at the bottom.)

Re: UBS Acquires Wealthfront for $1.4B

#164

Post by all2 »

lotsofpulp wrote: post #39
all2 wrote: post #27

Earlier quoted context omitted.

I have to remember to do those few clicks, though.

Should people not be remembering to login to their accounts on a monthly or at least bimonthly basis to save statements/verify transactions/check to make sure they are not being stolen from?

I glance at account balances about once a week just out of habit. More than that requires brain power that I either lack or am too lazy to use unless I plan ahead.

Re: UBS Acquires Wealthfront for $1.4B

#165

Post by JumpCrisscross »

TuringNYC wrote: post #121
JumpCrisscross wrote: post #113

Earlier quoted context omitted.

> 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…

> JPM's investment site, as far as I can see, cannot even repeat-purchase an ETF

Do you mean automatic deposits and investments? That's table stakes. They offer it. They aren't advertising it because fire-and-forget is 99% of the pitch of the wealth management industry. (That they're messaging it badly is in no way challenged.)

With respect to smaller dollar amounts, the traditional answer was mutual funds. Those usually have $1 minimums. They were historically shit when it came to fees, but now typically come in below 50 bps for broad-market funds.

Re: UBS Acquires Wealthfront for $1.4B

#166

Post by onphonenow »

matteotom wrote: post #153
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…

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)! 3) Then and only then can you initiate an ACH transfer. 4) It can only go to your own account in some cases (T+1/T+2) 5) Then you have to go to you bank and get a wire out (retail banks often have tight cutoffs or end up delayed if going online while they "approve" this). 6) This all can be stressful on closing day (agents calling, escrow calling, bank calling, your relative calling). Now you are not days but a week late.

vs

Talking with someone. They enable margin account if you don't have one, you wire same day, done or you can give your guys name to everyone to help coordinate if needed if it will be a bit late.

Re: UBS Acquires Wealthfront for $1.4B

#167

Post by onphonenow »

wayne wrote: post #159
kmonsen wrote: post #155

Earlier 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…

I still don't understand why there wasn't a way to do an exchange on this conversion that avoided this! I mean, contribute the holdings of fund A to fund B etc.

Re: UBS Acquires Wealthfront for $1.4B

#168

Post by endisneigh »

tymekpavel wrote: post #119
endisneigh wrote: post #11

Earlier quoted context omitted.

Agreed completely. I don’t know how anyone can justify 10 times the fees using wealthfront for non trivial amounts of money. I personally have many friends who are very happy with betterment and wealthfront which is good. When I ask them about their returns in the past couple years they say that the stocks have done amazingly. When I tell them SPY would’ve given them higher returns and lower fees they’re skeptical, a…

You assume that most people who want to invest even understand what SPY is, what a proper allocation looks like between stocks and bonds, what tax-loss harvesting or rebalancing is, etc. For those folks, robo-advisors provide a huge value-add in making it really simple to invest responsibly. If they were to do it on their own, they probably wouldn't know where to begin.

The kind of person who is using a robo adviser will probably know what SPY is, and even if they don’t that’s the purpose of my post.

I’ve yet to see evidence that any actively managed fund, including robo advisers, outperform SPY on a risk adjusted and fee adjusted basis.

Re: UBS Acquires Wealthfront for $1.4B

#169

Post by TameAntelope »

hedgehog wrote: post #128
Arcuru wrote: post #114

Earlier quoted context omitted.

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.

Funny, I'm up 45%/year going back 30ish years, since we're on the Internet just saying things.

Re: UBS Acquires Wealthfront for $1.4B

#170

Post by adrr »

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 Wealthfront actually buy individual stocks? Most robo-advisors buy ETFs. So you're paying double management fees. I'm not aware of any robo-advisors that actually buy individual stocks.
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