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UBS Acquires Wealthfront for $1.4B

reuters.com

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Re: UBS Acquires Wealthfront for $1.4B

#81

Post by Scoundreller »

endisneigh wrote: post #58
Scoundreller wrote: post #23

Earlier quoted context omitted.

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.

This doesn’t do what you think it does. It’s tantamount to timing the market which generally is a losing strategy. Not sure if you’re being sarcastic Tax loss harvesting really only works in the long run if you know which stocks won’t recover.

Hence the emphasis on cycling things around. You’re not trying to cut and run, but retain exposure while crystallizing the loss.

I’m not in US, but what are the rules about buying back a stock that you just sold?

In Canada, it’s a 30d wait for the loss to count, but you can buy back another similar company/index the next minute and your loss still counts.

If the price of oil craters and you sell your -10% Exxon and buy -10% Chevron, you’re not timing the market but you are crystallizing a loss.

Or change between Solactive and MSCI-based index funds because they’re “only” 95% identical.

Re: UBS Acquires Wealthfront for $1.4B

#82

Post by dartdartdart »

endisneigh wrote: post #37
devoutsalsa wrote: post #32

Earlier quoted context omitted.

I use Wealthfront. Performance vs SPY is comparable, but it can depend on your risk preferences. I like it because it abstracts away the underlying securities & I don’t have to worry about it. I also like their feature that lets you borrow against your portfolio at a fairly low rate (less than 4% for me), which is a painless way to tap into credit if you need to for pick a reason. I think it’s a great option for anyo…

The comparison isn’t really performance. It’s more fee adjusted returns. Obviously Wealthfront likely has an index itself that it uses, but the fees are 10X (0.03 for Fidelity be around 0.3 for Wealthfront).

Are you comparing this to fidelity's target date retirement fund?

Re: UBS Acquires Wealthfront for $1.4B

#83

Post by rkalla »

When I think of what a FinTech darling Wealthfront was when it came out, all I can see this is as a colossal flop.

For what it's worth...

About a year ago I opened a robo-advisor account at SoFi and another at Wealthfront and pitted them against each other with high-risk/default settings and a weekly deposit.

The SoFi one has been outperforming the Wealthfront one all year long (by 1-2%; nothing life changing) which surprised me but it also made me feel that all the magic AI/ML under the covers that WF promoted didn't exist and no one was managing anything.

Re: UBS Acquires Wealthfront for $1.4B

#84

Post by lotsofpulp »

zefhous wrote: post #79
pepemon wrote: post #56

Sorry for the possible off-topic, but can anyone explain to me how the robo-advising is different/better/worse than constant passive investing into popular ETFs, e.g. $SPY, $BND, $VOO, etc.?

I mean that’s literally where the money ends up anyway. I have a small amount in Wealthfront to check it out. With my “10/10” risk allocation, my money is all in vanguard funds. 45% VTI 20% VEA 19% VWO 14% VIG 2% VETB They do also offer some services such as “tax loss harvesting” that you can’t really do on your own, but I don’t really know if it’s worth their fee. Really, I think one of the best investing strategies…

You do not even have to hold a variety of Vanguard funds, just figure out the year you aim to retire in and buy the target date retirement fund.

https://investor.vanguard.com/investment-products/mutual-fun...

Re: UBS Acquires Wealthfront for $1.4B

#85

Post by blobbers »

endisneigh wrote: post #58
Scoundreller wrote: post #23

Earlier quoted context omitted.

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.

This doesn’t do what you think it does. It’s tantamount to timing the market which generally is a losing strategy. Not sure if you’re being sarcastic Tax loss harvesting really only works in the long run if you know which stocks won’t recover.

You can do it using basket ETFs. The IRS doesn't consider them "exact" replicas. So if VOO drops, you can harvest using SPY and maintain the same exposure, then switch back to VOO a month + few days later.

Re: UBS Acquires Wealthfront for $1.4B

#86

Post by dartdartdart »

endisneigh wrote: post #34
astura wrote: post #22

Earlier quoted context omitted.

>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.

I don’t disagree but my point is that an uninformed investor would be better off financially with a straight index.

Wealthfront's value is that the unpassionate investor can set and forget it, instead of manually transferring every month

Re: UBS Acquires Wealthfront for $1.4B

#87

Post by trimbo »

rattray wrote: post #7

Honestly surprised this is so low. Have they been doing poorly? How does Betterment compare these days?

Betterment has ~$30bn AUM. Neither that nor Wealthfront's $27bn AUM are considered a lot in that industry. My brother-in-law works at a midwestern wealth advisor most have ever heard of that manages $10bn. There are a lot of small firms the $1-$10bn range.

And those advisors typically take 1+%/yr. At 0.25%, Wealthfront would have had to have $40bn AUM to have equivalent revenue, not to mention WF took $200M in VC money to build it.

Re: UBS Acquires Wealthfront for $1.4B

#88

Post by vailripper »

rkalla wrote: post #83

When I think of what a FinTech darling Wealthfront was when it came out, all I can see this is as a colossal flop. For what it's worth... About a year ago I opened a robo-advisor account at SoFi and another at Wealthfront and pitted them against each other with high-risk/default settings and a weekly deposit. The SoFi one has been outperforming the Wealthfront one all year long (by 1-2%; nothing life changing) which…

Has it continued to outperform Wealthfront during the past couple of weeks, where the markets have been trending more downward? Curious if SoFi has a higher-risk 'high-risk' setting than Wealthfront, in which case you might expect them to take more of a hit when the markets go down.

Re: UBS Acquires Wealthfront for $1.4B

#89

Post by subsubzero »

Back in 2015 I put some of my money into wealthfront, despite the market doing well at the time, my wealthfont fund which was heavily stock balanced did somewhat poorly. This was over a year's time so not short lived by any means. I pulled my money out and invested into stocks I chose and never looked back(typically get 10-15% returns a year). I would like to hear other people's perspectives about how their wealthfront funds did as my colleagues did the same as me and left wealthfront as well.

Re: UBS Acquires Wealthfront for $1.4B

#90

Post by pyrrhotech »

blobbers wrote: post #80
pyrrhotech wrote: post #42

Interesting, the figure does seem quite low to me. Boglehead passive investing has worked really well for the past dozen years. I expect the next 10-15 to be much more challenging given the extremely high starting valuations and end of the low interest rate and QE tailwind. I've been building algotrading models to help tackle the challenge of when to hedge at https://grizzlybulls.com

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, email notifications or a managed account in which case after some legal paperwork, we set up a second user in Interactive brokers with trading authority that executes trades based on the signals (hedging via ES futures).

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