That's super! Do y'all have no petroleum etfs on offer?
Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
191–200 of 434 posts
Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
#192As much as I love to use your product, the challenge from my perspective is why switch for 0.03% in fees? Especially when you compare it to likes of fidelity, vanguard , schwab. Those 3 are too big to fail. The point I am accentuating is, that just lowering the fees to 0 is not a compelling reason anymore, especially when the fees are soo low already, its race to the bottom.
Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
#193If you are making money from payment for order flow (based on transactions) with a direct indexing strategy, you may be incentivized to encourage customers to rebalance more frequently than they might otherwise in order to accrue fees from those trade transactions. For example, daily rebalancing/tax loss harvesting sounds neat, but how it is implemented can vary -- you would be incentivized to trade client accounts 'trigger happy' whenever possible to maximize fees. I could see that leading to the $1-10k annual revenue per customer that people on this thread are confused about relative to the $1 flat account fee.
The potential negatives of this bias that I can see for customers:
- tax loss harvesting is more a craft than a science. The goal of investing is primarily to have gains! And no one can predict the future fully. So it's really hard to know if selling a large position at a loss is a good move -- if that position goes up next year you may have missed out (like selling NVIDIA 3 years ago in a dip -- you would have been following the TLH playbook but you would be kicking yourself now).
- If this is indeed your business model, this model only works for direct indexing portfolios with many stocks, so you will be biased to suggest portfolios with many companies instead of concentrated holdings, and biased against offering ETFs/funds.
Not the end of the world in terms of negatives. But I just wanted to mention that 'churning stocks for fees' is a business model I haven't seen discussed on this thread.
Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
#194I'm curious about how direct indexing impacts tax filing. You mentioned generating short term/long term capital gains numbers, which is fine, but what about all the different transactions? Won't someone using your service have to enter all of them manually on their return?
IIRC if your brokerage reports everything to the IRS properly, you only need to fill out net short- and long-term capital gains on your schedule D rather than specifying every single transaction on a bunch of Form 8949 copies.
Not sure if Double's underlying brokerage is reporting everything necessary for this to be the case though, as I believe some brokerages don't.
Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
#195I saw the "Your Money is Secure" section, but after things like the Synapse fiasco, I would like to get confirmation from you. It says my money would be SIPC insured, which means if anything goes missing (obviously not through loss of equity value, but through missing funds or a ledger bug), I get my money back, up to the SIPC limit, right? I just want to ensure this isn't the same situation with fintechs that say yo…
Yup. Zero interest until there is a very clear answer here.
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Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
#196As much as I love to use your product, the challenge from my perspective is why switch for 0.03% in fees? Especially when you compare it to likes of fidelity, vanguard , schwab. Those 3 are too big to fail. The point I am accentuating is, that just lowering the fees to 0 is not a compelling reason anymore, especially when the fees are soo low already, its race to the bottom.
Fair point! We also let you build a pretty customized indexes, and migrate between positions easily over time. For example, you can diversify away from your employer or your employers sector, or over or under weight specific stocks you'd like.
Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
#197Earlier quoted context omitted.
> As part of the agreements with the United States Attorney’s Offices for the Central District of California and the Western District of North Carolina, the Commercial Litigation Branch of the Civil Division, and the Securities and Exchange Commission, Wells Fargo admitted that it collected millions of dollars in fees and interest to which the Company was not entitled, harmed the credit ratings of certain customers,…
You're misunderstanding what the benefit of being large is, and what the risk of being small is. I totally accept and understand that large businesses do all sorts of shady and nefarious things. What I don't expect them to do is lose all my money with no recourse. And that's not just the case because they're big, but the regulatory regimes are set up to deal with these known entities. The reason I've personally becom…
RIA doesn’t have a guarantee as such — it’s a license to sell you securities and, also, give you advice on which securities to buy. Such a person or company doesn’t even necessarily keep an account: it’s a financial advisor certification. But this is the “actual broker-dealer” certification you’re asking for.
They keep your account at Apex Clearing, which is a very very large company that is not going anywhere anytime soon.
So, the key bit here is: do you trust them on that? They’ve got SEC filings and it’s as above-board as any other fintech. And next, are you prepared to argue with Apex for your money when/if they fail? And is this worth it to you for the product offered?
Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
#1981) are you going to sell your trade flow to Citadel / market makers like Robinhood and your competitors do? That's the dirty secret way of making money that you seem to have completely excluded. The reality is that adds up to substantial "invisible" fees that the investor has no transparency over because you sell your trade flows to them and they make a higher than normal spread. And the whole "doesn't matter if we s…
>> are you going to sell your trade flow to Citadel / market makers like Robinhood and your competitors do?
Is that really a problem if you're still getting NBBO (https://en.wikipedia.org/wiki/National_best_bid_and_offer)
Could you explain the downside of selling order flow if you're getting no worse than the current NBBO?
Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
#199As much as I love to use your product, the challenge from my perspective is why switch for 0.03% in fees? Especially when you compare it to likes of fidelity, vanguard , schwab. Those 3 are too big to fail. The point I am accentuating is, that just lowering the fees to 0 is not a compelling reason anymore, especially when the fees are soo low already, its race to the bottom.
Also, Fidelity already offers 0% expense ratio funds: https://www.fidelity.com/mutual-funds/investing-ideas/index-...
Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
#200Earlier quoted context omitted.
I've never heard of Wealthfront, and I know Robinhood mostly for exploiting low-info customers & trying to make investing even more like gambling than it already is[1]. Pretty gross company to be keeping IMO. [1] https://www.velaw.com/insights/game-over-robinhood-pays-7-5-...
Investing is not the same as trading, which is what Robinhood primarily caters too. Also Apex is a big name in the brokerage world. They are a business to business company though, so most consumers never would have heard of them.
> Apex is a big name in the brokerage world
But not big enough to have a Wikipedia page? Are you sure they're not just a big name in the financial startup/casino/scam world?