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UBS Acquires Wealthfront for $1.4B

reuters.com

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Re: UBS Acquires Wealthfront for $1.4B

#21

Post by endisneigh »

cj wrote: post #14
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.

> 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.

Re: UBS Acquires Wealthfront for $1.4B

#22

Post by astura »

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.

>robo advisers are a waste of money

For the informed investor, yes, however they are a giant step above the "financial advisors" (mostly insurance salesman) that uninformed investors otherwise would end up with.

If you otherwise wouldn't invest or would go to a non-fiduciary advisor, then the fee is worth it.

Re: UBS Acquires Wealthfront for $1.4B

#23

Post by Scoundreller »

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.

One US strategy that can beat ETFs is the part where the first $3k in capital losses per year can be applied against income.

So if you owned every stock in the index directly, one could cycle the losers around a bit (there will be at least some each year) to maximize this write off against income.

Re: UBS Acquires Wealthfront for $1.4B

#24

Post by Glyptodon »

quickthrowman wrote: post #10

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.

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 driving them out.

Re: UBS Acquires Wealthfront for $1.4B

#25

Post by somethoughts »

TuringNYC wrote: post #5

I'm honestly shocked at how primitive the big firms' offerings are. For example, JPMChase's bank account is smart enough to see a payroll deposit and give you a comment modal suggesting that you invest the money with JPM's investment platform (YouInvest/whatever) Log into the investment platform and you're back in 1993. They literally have no drip-investment style offering. They want to charge you 100bps to "manage"…

I suspect you are on to something. Maybe they were waiting for valuations to return to earth? The make versus buy decision was much harder when these platforms were richly valued.

I could a lot of acquisitions in the coming months as capital moves out of growth at all costs fintech space and startups need a lifeline.

Re: UBS Acquires Wealthfront for $1.4B

#26

Post by laluser »

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…

It probably depends on what adjacent financial products they are selling and how good of a job they are doing at selling those to existing customers. Wealthfront is always suggesting different financial products, cards, etc. There is little money in managing your money since these are mostly served by large funds like Vanguard, but there is a lot of money in referrals selling you other products. It's possible Wealthsimple is doing much better?

Re: UBS Acquires Wealthfront for $1.4B

#27

Post by all2 »

lotsofpulp wrote: post #16
dartdartdart wrote: post #12

Anyone know of any other product offer that will take excess after direct deposit and invest it for you? I've called Fidelity and Betterment and both do not offer an automated way like wealthfront does. Really sad to see wealthfront being the only player in that space. Edit: by automated I mean something like "everything over $10k after bills, invest". It takes a couple of clicks per month manually, but it's been pre…

Is there really that much utility in automating that? It takes a few clicks to move money from a checking account in Schwab/Fidelity to a target date fund or index ETF.

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

Re: UBS Acquires Wealthfront for $1.4B

#28

Post by Scoundreller »

2bitencryption wrote: post #17

really interesting takeaways from the Wealthfront landing page[0]: * every example is shown as a smartphone app - not a single "desktop-oriented" screenshot to be found. I guess we are finished with the days where every service has an app. Now, every service is an app. * In the first example, an investment portfolio is shown where roughly 10% of the holdings is in a group called "single stock bets." Yikes! Though may…

> lots of emphasis on "emerging markets", "socially responsible funds", crypto

They love these stocks because they usually have a big short interest. The broker can lend them out and keep the profits for themself.

Only IKBR does some sharing of securities lending profits.

Re: UBS Acquires Wealthfront for $1.4B

#30

Post by dymk »

lotsofpulp wrote: post #16
dartdartdart wrote: post #12

Anyone know of any other product offer that will take excess after direct deposit and invest it for you? I've called Fidelity and Betterment and both do not offer an automated way like wealthfront does. Really sad to see wealthfront being the only player in that space. Edit: by automated I mean something like "everything over $10k after bills, invest". It takes a couple of clicks per month manually, but it's been pre…

Is there really that much utility in automating that? It takes a few clicks to move money from a checking account in Schwab/Fidelity to a target date fund or index ETF.

There is. Logging into those accounts is a pain in the ass, and requires active effort to remember doing. Automating things like bill-pay, deposits, and other "set it and forget it" tech is the best thing since sliced bread.
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