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UBS Acquires Wealthfront for $1.4B

reuters.com

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Re: UBS Acquires Wealthfront for $1.4B

#251

Post by astrange »

vamega wrote: post #238
astrange wrote: post #200

Earlier quoted context omitted.

> Another reason is because of tax loss harvesting. To make that work, you have to avoid wash sales. The wash sale rule applies to you and every account you own, taxable, retirement, across brokers, etc. So to make TLH work, the broker needs to have a complete view. It doesn't really. They like saying that because it shows off their product, but the IRS doesn't know what's in your retirement account and probably no-o…

It really does. Here's the IRS ruling on this. https://www.irs.gov/pub/irs-drop/rr-08-05.pdf

They don't ask for your IRA transactions, TurboTax and other consumer products don't even try to work out wash sales between multiple brokers let alone IRAs, and Congress intentionally doesn't fund IRS investigators because they don't want them to actually enforce anything, so…

Similarly, HSAs are taxable in California but I doubt most people know this and it hasn't caused my HSA investment account to offer tax statements you could even use to report it if you wanted to. So…

Re: UBS Acquires Wealthfront for $1.4B

#252

Post by MisterSandman »

parthdesai wrote: post #246
dmix wrote: post #124

Earlier quoted context omitted.

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

do people even use Cash though? all my buddies just use interac

They *just* launched, and they've been pushing a lot in University towns. I don't know how successful it'll be, but every single one of my friends has WS Cash, and if I ever had to send them cash I'd first ask if they'd use Cash since it's so much simpler than Interac.

Unfortunately, most people say no right now since the WS Cash Card is really weak (so no point in using it) and it takes a couple of days for you to withdraw money from WS Cash to your bank account.

Re: UBS Acquires Wealthfront for $1.4B

#253

Post by twblalock »

astrange wrote: post #251
vamega wrote: post #238

Earlier quoted context omitted.

It really does. Here's the IRS ruling on this. https://www.irs.gov/pub/irs-drop/rr-08-05.pdf

They don't ask for your IRA transactions, TurboTax and other consumer products don't even try to work out wash sales between multiple brokers let alone IRAs, and Congress intentionally doesn't fund IRS investigators because they don't want them to actually enforce anything, so… Similarly, HSAs are taxable in California but I doubt most people know this and it hasn't caused my HSA investment account to offer tax state…

So your argument is that it's ok to avoid the wash sale rule because you are unlikely to get caught?

Re: UBS Acquires Wealthfront for $1.4B

#254

Post by rrrrrrrrrrrryan »

thesausageking wrote: post #250
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…

That honestly doesn't sound like very much to take 0.25%. Maybe if you're starting out and have $10k to invest, but once you're in the mid six figures or more, the 0.25% adds up. If you buy and hold, it doesn't take much work and expenses for Vanguard ETFs are ~0.10%. Also, once you move to Wealthfront, it's hard to ever leave because of how they break things up (which, I'm sure, isn't unintentional).

A big advantage of the robos is that they time the rebalancing a little better. Manually rebalancing your own Vanguard ETFs at the same time once a quarter is pretty arbitrary - it's based on what's convenient to you, but it's not necessarily what's mathematically best for your portfolio.

If your allocation percentages remain very stable, you might not need to rebalance at all at the end of a quarter. If your allocations fall way out of whack, you might want to rebalance a portion of your portfolio earlier, and robos handle that timing for you.

I'd be surprised if the better timing doesn't provide 0.25% of value, not to mention it's just one less thing to have to think about.

Re: UBS Acquires Wealthfront for $1.4B

#255

Post by jacobkg »

echelon wrote: post #213
zie wrote: post #191

Earlier quoted context omitted.

* Edward Jones will do it for you for ~ 2%/yr, which is ridiculously high. * Any of the big banks or brokerages will do it for less than Edward Jones. * Almost any financial advisor will do it for about 1%/yr in fees(not ridiculously high, but not remotely cheap) or fee-based for a few hundred an hour with a 1st time setup of $4-10k, more than $10k is unreasonable. * The robo advisors(of which their are dozens with b…

> * Bogleheads.org will do it for free as long as you follow their template. phpBB with a custom "web1" frontend reminiscent of Craigslist. That's something I haven't seen in a long time. My first impression was honestly to trust it more. Thanks for sharing!

Bogleheads has my favorite forum feature (which I haven’t seen elsewhere) which is that their home page is all posts from all sub forums ordered by most recent so you rarely have to click around to find updates. That and absurdly good content, incredibly little drama, and almost no politics

Re: UBS Acquires Wealthfront for $1.4B

#256

Post by iamhamm »

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…

I was a happy Wealthfront & Turbotax user for a long time, but then my taxes got more complicated, I wanted to create a family bank using life insurance as a backer, do estate planning, I moved between states, needed to move IRAs around, and changed jobs recently. Those services were great when things were simple, but I totally got pushed into #1 really quickly. I already didn't want to click around in any tools and a bit of complexity quickly made hiring someone a great investment even if the fees are higher. I can schedule a call anytime I want, get very easy to interpret summaries of my portfolio, and he's helping me getting the right people to the table for a potential investment property purchase. Computers are great, but sometimes a human is good too.

Re: UBS Acquires Wealthfront for $1.4B

#257

Post by WaxProlix »

zie wrote: post #191
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…

* Edward Jones will do it for you for ~ 2%/yr, which is ridiculously high. * Any of the big banks or brokerages will do it for less than Edward Jones. * Almost any financial advisor will do it for about 1%/yr in fees(not ridiculously high, but not remotely cheap) or fee-based for a few hundred an hour with a 1st time setup of $4-10k, more than $10k is unreasonable. * The robo advisors(of which their are dozens with b…

There's Facet Wealth, who will take ~$200/month flat fee up until around 1M AUM (or with extra complexity) to do the same. You get good personal contact on a regular basis, but it feels bad to spend 2400/yr just for "yeah you're on the right track, this is it" every quarter once everything is in the appropriate vanguard target date funds and such.

Re: UBS Acquires Wealthfront for $1.4B

#258

Post by rockinghigh »

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…

ETFs do most of these items often for a lower fee (5-10bps).

Re: UBS Acquires Wealthfront for $1.4B

#259

Post by clay-dreidels »

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…

Swan Bitcoin will automatically convert your USD direct deposit into BTC on the same day, and then transfer your BTC weekly into your cold storage.

Re: UBS Acquires Wealthfront for $1.4B

#260

Post by jonstewart »

da39a3ee wrote: post #240
onphonenow wrote: post #166

Earlier quoted context omitted.

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…

If you have planned to contribute $500K then presumably your plan involves making the money liquid with the necessary few days anticipation. Also, my Wealthfront account is offering me approximately 25% "Available to borrow". I haven't tried it yet but I assume I could grab that immediately and then sell stock to pay back the loan. I'm not challenging your claim that having a human financial advisor can be useful. I'…

I’m a mostly-happy Wealthfront user, but there’s a negative feature of the loan that I found out the hard way. I was having some medium-level renovations done on my house, and pushing the easy button to get some cash without liquidating investments sounded good to me. That worked great! But: WF would not let me add any more to my investment account until I paid the loan back in full! This wasn’t prominent, and I’d have happily made payments for longer by dividing between the loan and investment. I missed out on much of the big upside of the past 20 months.
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