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UBS Acquires Wealthfront for $1.4B

322 points by blobbers 5y ago

blobbers 5y ago
A lot of you likely invest in a boglehead style. Wealthfront was an attempt to automate that while adding some bells and whistles on top; tax loss harvesting, smart beta, etc. Curious to see how they succeed as part of UBS. I thought Marcus/Goldman was going to buy them personally, so a bit surprised UBS is getting in on this game.
- msoad 5y ago
  Did anyone get any real beta out of it for a sustainable period?
  - blobbers 5y ago
    beta is correlation to the market (usually refers to SPY correlation). Not sure what you're saying.
    - msoad 5y ago
      sorry I meant alpha. oops
  - im_asl 5y ago
    *Alpha
- atuladhar 5y ago
  Marcus bought HonestDollar, which is in the same space, a while ago, and has rebranded it as "Marcus Invest" * https://www.honestdollar.com/ https://www.honestdollar.com/ * https://www.marcus.com/us/en/invest https://www.marcus.com/us/en/invest
- prepend 5y ago
  When I looked at it the fees were way to high to justify to bogelheads. What is strange to me about robo advisors is that they are still charging a management fee instead of a flat fee. The algorithms are really basic and don’t have any real time changes so it seems weird to charge 25-50 basis points for what’s basically just an interview and time based rebalancing with some formulas that aren’t really better than existing ETFs. I’ve been expecting this to just be a feature for vanguard and fidelity since the “advise” could just be client side automation rules that nobody wants to build.
  - xur17 5y ago
    Agreed. To me target date retirement funds honestly make more sense for most people.
    - tinalumfoil 5y ago
      I'm not sure about that. Targets funds fees are generally a percent not flat, you have less control over your money (which if you're doing a robo-advisor you probably have somewhat bespoke investing requirements) and they only make sense for tax-advantaged accounts (see [1]). Plus, people invest for reasons other than dated retirement targets. [1]: https://www.wsj.com/articles/vanguard-target-retirement-tax-bill-surprise-11642781228 https://www.wsj.com/articles/vanguard-target-retirement-tax-...
  - teej 5y ago
    Tax loss harvesting alone has more than paid the 25 bps fee that Wealthfront charges. It's a no-brainer to me. I'm very happy with Wealthfront.
- mbesto 5y ago
  boglehead here. Switched off of Wealthfront awhile back. AFAIK they wouldn't outperform a three-fund portfolio. I actually wouldn't mind a platform that uses my brokerage as a backend and lets me do % allocations on 3~4 funds, automatically identifies rebalance opportunities and tax loss harvesting. Basically nudging me like 3~5x per year. I'd pay a flat fee to do that.
  - zylepe 5y ago
    I have a google sheet where I keep track of each fund I’ve bought and sold. From there I added a column with gain/loss for each tax lot with remaining shares, and a script that runs once a day to email me if there’s an opportunity for tax loss harvesting. It works pretty well. I like the idea of rebalance opportunity notifications, but it’s harder to get retirement funds into a google sheet with all the automatic contributions that happen…
    - adammenges 5y ago
      Thought about integrating it with Alpacha?
troydavis 5y ago
Wealthfront’s announcement: https://blog.wealthfront.com/wealthfront-has-agreed-to-be-acquired-by-ubs/ https://blog.wealthfront.com/wealthfront-has-agreed-to-be-ac...
TuringNYC 5y ago
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" your money, or you get a broken/buggy online broker with barely any functionality. Why the heck isnt JPMChase buying one of these platforms?!?
- somethoughts 5y ago
  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.
  - TuringNYC 5y ago
    I think the "build" can be considered a clear failure at this point, it would take 10min on the JPM "platform" to see that. Not acquiring ShareBuilder was a major loss, especially given that CapitalOne purchased ShareBuilder, took the customers, and killed the platform. Not sure why the platform couldnt have been spun off to JPM (?except perhaps competition?) GS purchased FolioFN, which was a lesser player, but still a decent platform. JPM is going to have to gulp down M1 Finance and pay for being so slow to the acquisition game <-- My prediction! Online brokerages selling order flow are very profitable, so even the "buy" decision seems like a no-brainer given the obvious monetization route. DRIP-style investment is even stickier -- you set it and forget it. Make it part of the Premier/Sapphire tiers and people dont want to move at all.
    - somethoughts 5y ago
      No doubt building is always harder than it looks and it looks like JPM tried to build with Finn and stopped awhile back. GS seems to also have Marcus which is still going at least? I wouldn't count JPM out though. I'd imagine they have been bulking up on cash by taking on debt for future acquisitions while interest rates were/have been low. They know this game well. Now that interest rates are starting normalize - they can now go pick the best of the best them - be it HOOD, SOFI, etc. at more reasonable valuations (or at least 50%+ of their 2021 peaks). Does HOOD at $50B make more sense or maybe just wait until it hits $8B. Plus the DAUs are more stabilized now that the hype has died down. And you get Dodd Frank compliant/audited accounting data instead of VC style EBITDA/DAU only data? In addition they can pick based on who's app is actually the most sticky/metrics and get to see all the apps internal metrics while doing "due diligence for a potential aquisition".
endisneigh 5y ago
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/ https://longbets.org/362/ Other people have done similar bets and they all lose on a risk adjusted, fee adjusted basis.
- astura 5y ago
  >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.
  - endisneigh 5y ago
    I don’t disagree but my point is that an uninformed investor would be better off financially with a straight index.
    - dartdartdart 5y ago
      Wealthfront's value is that the unpassionate investor can set and forget it, instead of manually transferring every month
    - astura 5y ago
      Um... What? If you know what an index fund is, how to purchase index funds, and know which index funds to invest in, by definition, you are not an "uniformed investor." You might argue "... rabble rabble you should know these things..." but that doesn't change that a large portion of the population doesn't and is extremely overwhelmed by it. I've never used Wealthfront personally but I assume its basically like a bank account - just transfer money in and everything else is taken care of for you. That's a really, really valuable service and it's well worth the small fee for some percentage of population. Otherwise they'd 1) not invest and lose out on gains and dividends or 2) lose massive amounts of money buying financial products sold to them by "financial advisors" with a 6% load and 1% fee. (Not an exaggeration) Is it a service for me? No. But not every service is something I'd be interested in, that's ok. My little cousin wanted to save more for retirement and heard about IRAs. He asked me how to set up and IRA and recommendations on what company to use. I recommended Fidelity with just an s&P 500 index to start. He got really overwhelmed even though I offered to help him click-by-click. He decided not to set up the IRA until he found Wealthfront. He loves the simplicity and that everything is taken care of for him. He's really happy he can save for retirement without worrying about doing something "wrong." Now, my cousin is a smart guy, so I think he'll move past Wealthfront eventually once he learns more, but it's really useful for him now.
rattray 5y ago
Honestly surprised this is so low. Have they been doing poorly? How does Betterment compare these days?
- deleted 5y ago
  [deleted]
- trimbo 5y ago
  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.
quickthrowman 5y ago
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.
- Glyptodon 5y ago
  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.
  - prepend 5y ago
    I’ve been using a client based tool (Moneydance) for 10+ years and some banks did support special accounts that had read only access to ofx APIs. It was kind of nice as I didn’t have to worry about my passwords as much. It’s gotten worse over the years as banks have stopped support for open APIs. I guess because of plaid-type integrators that make custom interfaces. I’ll likely quit my bank (usaa) as they got rid of any api access unless you go through third parties. I’m not willing to give my account credentials to a third party like plaid where the downside is draining most of my liquid assets and investments.
    - mindslight 5y ago
      It feels like there should be some libre tool that automates downloading OFX through the web interfaces and keeps up with the breakage, at least for popular banks. Integrate with procmail and the like to deal with snake oil 2FA, etc.
      - prepend 5y ago
        I’ve tried gnucash a few times but it was just too much work for not enough rewards. I’ve contemplated just making my own scrape to database script because all I really want is a ledger I can query. Moneydance has been decent enough and I think I’ve paid $100-150 in 10+ years for an initial version and then an upgraded one.
dartdartdart 5y ago
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 pretty relieving not having to do that every month.
- lotsofpulp 5y ago
  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.
  - all2 5y ago
    I have to remember to do those few clicks, though.
    - lotsofpulp 5y ago
      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?
      - all2 5y ago
        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.
    - knappe 5y ago
      Vanguard allows you to set up automated withdraws that are invested into specific funds, with one caveat: `It’s important to note that you can only automate investments into Vanguard mutual funds.` https://support.vanguard.com/tutorials/automatic-investments https://support.vanguard.com/tutorials/automatic-investments
propter_hoc 5y ago
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 that the party's ending. [0] https://www.roboadvisorpros.com/robo-advisors-with-most-aum-assets-under-management/ https://www.roboadvisorpros.com/robo-advisors-with-most-aum-... [1] https://financialpost.com/investing/wealthsimple-valuation-should-be-a-wake-up-call-for-big-banks-and-traditional-money-managers https://financialpost.com/investing/wealthsimple-valuation-s...
- laluser 5y ago
  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?
  - cbhl 5y ago
    For what it's worth, Wealthsimple exited the US market last year and transferred all their US customers to Betterment. They seem to still be adding new products in Canada though (like a Venmo-like cash transfer system.)
- jmacd 5y ago
  Wealthsimple now has in house advisors who email and call you to discuss your account. There is nothing 'robo' about the business model anymore and instead they are just focused on growing AUM by talking to people and convincing them to move more of their savings/TFSA/RRSP over to them.
  - blobbers 5y ago
2bitencryption 5y ago
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 maybe this a case of "know your audience"? maybe they are trying to convert the hordes of GME-pumpers to try something a bit less risky? * lots of emphasis on "emerging markets", "socially responsible funds", crypto. I've always heard the best long-term advice is to simply throw your money into an ETF tracking the s&p500 or nasdaq, but clearly wealthfront is targeting those who want some emotional connection to their savings. all in all, seems like a cool service, especially if it helps convince those to begin saving who would otherwise not be saving. [0] https://www.wealthfront.com/ https://www.wealthfront.com/
- Scoundreller 5y ago
  > 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.
  - bdonlan 5y ago
    Fidelity also has a fully-paid securities lending offering, and I believe Ally Invest does as well. It's not just IBKR.
- jonas21 5y ago
  > In the first example, an investment portfolio is shown where roughly 10% of the holdings is in a group called "single stock bets." Yikes! That's 10% of the entire portfolio spread out over (presumably) multiple individual stocks, which seems reasonable to me... is it not?
- somethoughts 5y ago
  Maybe they were trying to differentiate themselves from the offerings of a potential acquirer and prepping themselves for aquisition - particularly perhaps once they realized they weren't going to be able to beat the legacy banks.
pyrrhotech 5y ago
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 https://grizzlybulls.com
- blobbers 5y ago
  Is your website built on some platform? Do you have any customers? How does your platinum plan work?
  - pyrrhotech 5y ago
    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).
    - blobbers 5y ago
      This is a pretty regulated market. How did you set up the managed account?
      - pyrrhotech 5y ago
        Managed accounts must first be set up on Interactive Brokers by the client, with a margin account + futures trading permission. Then a second user must be added with Limited Trading Authorization: https://www.investopedia.com/terms/t/trading-authorization.asp https://www.investopedia.com/terms/t/trading-authorization.a.... Interactive Brokers has some standard forms to establish the contract. Once all that's set up, I run a parallel instance of my bot with your account in the cloud. Please send me a "Contact Us" or an email if you are interested and want to know more details.
pepemon 5y ago
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.?
- mgh2 5y ago
  One friend told me it was his way of "outsourcing investment research", whether or not that justifies these platform's "low fee" and their returns vs. DIY is another issue.
- acomms 5y ago
  2 things come to mind: 1. These target the large majority of people with no will or interest in researching/picking/managing their own ETF investments. 2. Robo advisers re-balance your ETF portfolio (in much the way an individual ETF would).
- tanduv 5y ago
  Not a comprehensive comparison, but I've been doing monthly investments into robo-advisors (Wealthfront and SoFi) as well as ETFs (SPY and VOO) for 2 years now. The returns are quite similar to ETFs, sometimes higher or lower depending on the markets.
- zefhous 5y ago
  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 is to buy and hold a variety of Vanguard funds and stop thinking about it.
  - lotsofpulp 5y ago
    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-funds/target-retirement-funds https://investor.vanguard.com/investment-products/mutual-fun...
treebornfrog 5y ago
Tim Ferris is laughing on this one. So many intro with WealthFront for a long time...
rkalla 5y ago
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.
- astrange 5y ago
  Stock returns over a single year are meaningless and not what they optimize for. Their "optimization" isn't perfect (MPT has some silly assumptions) but it's made for 30 years from now.
- vailripper 5y ago
  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.
subsubzero 5y ago
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.
- pssdbt 5y ago
  Interesting, I started in 2017 and am up 40.58% all time today.
  - akashshah87 5y ago
    If you had put money in VTSAX on 1/26/2017 and reinvested dividends, you would be up 101.91% with an annualized return of 15%
    - Beaver117 5y ago
      That's not the same. Money doesn't just appear all at once ready to dump on the market, we get and invest it every paycheck. So average cost basis over time gets higher as you make purchases
      - _clhx 5y ago
        annualized return is annualized return, his strategy gave him < 9% annualized return and that is being generous, saying he's invested for 4 years not 5. if you look at SPX returns over the last four years, 2018 was a negative year but each year after was between 16% and 28%. also 2017 was over 19%.
    - pssdbt 5y ago
      I mean that applies to anyone in this thread more than me specifically. I'm not saying Wealthfront is the best option, just that I've been fine with it as someone who knows nothing about investing and didn't want to keep throwing money into a savings account. And if we're being picky about time, I'm closer to 4 years in Wealthfront and was up 50% all time a few weeks ago. Still not the best, but better than savings. Just going to move it all to $DOGE now anyways.
smohnot 5y ago
470k accounts and $27B AUM, ~$60k per account. @ 25bps that would be ~$70M revenue but there is some discounting so it is probably closer to $60M 2021 was a good year for the market, a great time to be acquired. They raised in 2014 @ $750M then 2017 @$500M
whitej125 5y ago
Wealthfront (and this goes for the rest of Wall Street) are analog businesses. They thrive on mass producing a fixed set of products. Those products are ETFs, Mutual Funds... or in Wealthfront's case... a rebalancing strategy based on a 1960's white paper called Modern Portfolio Theory. Each of these players spends a ton trying to mass market these products. You have financial advisors pitching mutual funds, asset managers shilling the virtue of their shiny new ESG ETFs... and robo-advisors all promising a set-it-and-forget-it panacea. Wealthfront got commoditized. Betterment at first... but then the discount brokers came in (Vanguard, Fidelity, etc) and just had a much more effective channel (advisors!) to the end investor. If you are just selling a singular product and that product is successful, you are going to get copied and beaten by competitors with better marketing channels. Wall Street will some day transform from an analog industry of mass production to a digital one of mass personalization. The building blocks for said transformation are slowly becoming ubiquitous (fractional shares support, commission free trading, etc). Super excited to watch this happen.
- RandomLensman 5y ago
  If I were to guess, I'd say that world will be more expensive again for most (or a lot) of individual investors. The costs of the whole machinery and the capital necessary to maintain it will have to go somewhere. Mass personalization in investment would only really work if it makes sense to truly personalize investments given the huge uncertainties involved. But I am sure people will happily sell this and find willing buyers.
- tmcw 5y ago
  The current norm is that many products are focusing on the statistically optimal approach - low fee, market returns - and they're competing on price and order execution which benefits individual investors. And the future is about giving investors more ways to damage their returns by actively trading and arbitrarily customizing their strategy.
lzrs 5y ago
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 day, their fees are over 1% unless you have an ultra high net-worth. In comparison, Wealthfront can automate huge strategies for a fraction of the cost (0.25%). For example: - Direct Indexing (invest in an index by buying the stocks directly instead of a fund) - Automatic investing, rebalancing, and tax-loss harvesting (including TLHing individual stocks within an index when paired with direct indexing) - Coordinating trades between retirement and taxable accounts for optimal tax savings - Smart beta (a custom weighted indexing algorithm) 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?
- robotsandcoffee 5y ago
  personally my favorite feature is the "autopilot" thing, which for example dcan automatically withdraw from my checking account and invest when my checking account hits a certain threshold. so for example i can just say "if my checking account goes above $30k, deposit the rest into some wealthfront investment account." i don't think a human financial planner can do this easily? just to add to your list.
- TuringNYC 5y ago
  >> Yes, a financial planner can do all of this (although most don't). But when they do, they just use automated software to do it. It would be impossible to implement these strategies manually. So why even go with a financial planner when Wealthfront does the same thing, but better/cheaper? Thats the 100$B question right? Because fear. Because unfamiliarity. Also because 1% seems small, but its really more like 14% (if the average return is 7%, you're giving up 1/7 of your return!)
  - 5y ago
bt3 5y ago
My first experience with Wealthfront was an IRA. After a short period (<year), I realized it was rather simplistic to take a predictable regular deposit and split it across a few ETFs to stay on track for their recommended portfolio. I ended up opening a taxable account to take advantage of tax-loss harvesting (materially more difficult to do myself). I'd be curious what proportion of their AUM sits under taxable vs retirement accounts. Nonetheless (forgive the plug), I ended up building a simple app that would help me automate the thinking of balancing my portfolio. Here's an example using a Wealthfront-genereated portfolio (ETFs + targets): https://correctmyportfolio.com/scenario/share/YISu5jI3 https://correctmyportfolio.com/scenario/share/YISu5jI3 Turns out figuring out where to optimize a portfolio to a target without selling, or other rules (like sell thresholds, cash buffers, etc.) is a bit more complicated than Excel would allow.
ppg677 5y ago
I had a lot of money in Wealthfront. It was not a good experience. First they auto-opted me into some actively managed hedge fund thingy they cooked up. As part of this auto-optin, they caused a non-trivial taxable event. And the fees increased. When I decided to bail and move my assets elsewhere, I was then left with 500 individual stock equity positions to deal with. What a mess. Took me a long time to sort out that mess and to get my assets into a more manageable situation for an individual. Of course to consolidate I had to take the tax event once they converted to long-term capital gains. I did a lot of this during spring of 2020 which was not a good time to be mucking with stock positions. I lost a fair amount of money. Finally the tax-loss harvesting is not aware of outside accounts and technically you might be violating tax rules. My accountant ultimately told me over the phone that current reporting rules essentially make this unenforceable though...but he refused to put that in an email.
happytiger 5y ago
Congratulations to Andy and the whole team. Quite the execution.
givemeethekeys 5y ago
I wonder if Wealthfront advised its members to sell all growth stocks and buy value stocks or just hang onto cash for a little while. I wonder if any advisors did this.
rifung 5y ago
I am a huge fan of the checking/budgeting features of Wealthfront. Does anyone know of a good competitor in case I'll have to jump ship? For those who don't use it, it allows you to create categories and automatically deposit money into those categories at some interval. Then you can easily transfer between those categories. I use this so that I can put some money away for expected expenses like taxes and a new car and also to budget for fun so I known what I can actually afford.

322 points by blobbers 5y ago

A lot of you likely invest in a boglehead style. Wealthfront was an attempt to automate that while adding some bells and whistles on top; tax loss harvesting, smart beta, etc. Curious to see how they succeed as part of UBS. I thought Marcus/Goldman was going to buy them personally, so a bit surprised UBS is getting in on this game.

msoad 5y ago
Did anyone get any real beta out of it for a sustainable period?
- blobbers 5y ago
  beta is correlation to the market (usually refers to SPY correlation). Not sure what you're saying.
  - msoad 5y ago
    sorry I meant alpha. oops
- im_asl 5y ago
  *Alpha
atuladhar 5y ago
Marcus bought HonestDollar, which is in the same space, a while ago, and has rebranded it as "Marcus Invest" * https://www.honestdollar.com/ https://www.honestdollar.com/ * https://www.marcus.com/us/en/invest https://www.marcus.com/us/en/invest
prepend 5y ago
When I looked at it the fees were way to high to justify to bogelheads. What is strange to me about robo advisors is that they are still charging a management fee instead of a flat fee. The algorithms are really basic and don’t have any real time changes so it seems weird to charge 25-50 basis points for what’s basically just an interview and time based rebalancing with some formulas that aren’t really better than existing ETFs. I’ve been expecting this to just be a feature for vanguard and fidelity since the “advise” could just be client side automation rules that nobody wants to build.
- xur17 5y ago
  Agreed. To me target date retirement funds honestly make more sense for most people.
  - tinalumfoil 5y ago
    I'm not sure about that. Targets funds fees are generally a percent not flat, you have less control over your money (which if you're doing a robo-advisor you probably have somewhat bespoke investing requirements) and they only make sense for tax-advantaged accounts (see [1]). Plus, people invest for reasons other than dated retirement targets. [1]: https://www.wsj.com/articles/vanguard-target-retirement-tax-bill-surprise-11642781228 https://www.wsj.com/articles/vanguard-target-retirement-tax-...
- teej 5y ago
  Tax loss harvesting alone has more than paid the 25 bps fee that Wealthfront charges. It's a no-brainer to me. I'm very happy with Wealthfront.
mbesto 5y ago
boglehead here. Switched off of Wealthfront awhile back. AFAIK they wouldn't outperform a three-fund portfolio. I actually wouldn't mind a platform that uses my brokerage as a backend and lets me do % allocations on 3~4 funds, automatically identifies rebalance opportunities and tax loss harvesting. Basically nudging me like 3~5x per year. I'd pay a flat fee to do that.
- zylepe 5y ago
  I have a google sheet where I keep track of each fund I’ve bought and sold. From there I added a column with gain/loss for each tax lot with remaining shares, and a script that runs once a day to email me if there’s an opportunity for tax loss harvesting. It works pretty well. I like the idea of rebalance opportunity notifications, but it’s harder to get retirement funds into a google sheet with all the automatic contributions that happen…
  - adammenges 5y ago
    Thought about integrating it with Alpacha?

troydavis 5y ago

Wealthfront’s announcement: https://blog.wealthfront.com/wealthfront-has-agreed-to-be-acquired-by-ubs/ https://blog.wealthfront.com/wealthfront-has-agreed-to-be-ac...

TuringNYC 5y ago

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" your money, or you get a broken/buggy online broker with barely any functionality. Why the heck isnt JPMChase buying one of these platforms?!?

somethoughts 5y ago
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.
- TuringNYC 5y ago
  I think the "build" can be considered a clear failure at this point, it would take 10min on the JPM "platform" to see that. Not acquiring ShareBuilder was a major loss, especially given that CapitalOne purchased ShareBuilder, took the customers, and killed the platform. Not sure why the platform couldnt have been spun off to JPM (?except perhaps competition?) GS purchased FolioFN, which was a lesser player, but still a decent platform. JPM is going to have to gulp down M1 Finance and pay for being so slow to the acquisition game <-- My prediction! Online brokerages selling order flow are very profitable, so even the "buy" decision seems like a no-brainer given the obvious monetization route. DRIP-style investment is even stickier -- you set it and forget it. Make it part of the Premier/Sapphire tiers and people dont want to move at all.
  - somethoughts 5y ago
    No doubt building is always harder than it looks and it looks like JPM tried to build with Finn and stopped awhile back. GS seems to also have Marcus which is still going at least? I wouldn't count JPM out though. I'd imagine they have been bulking up on cash by taking on debt for future acquisitions while interest rates were/have been low. They know this game well. Now that interest rates are starting normalize - they can now go pick the best of the best them - be it HOOD, SOFI, etc. at more reasonable valuations (or at least 50%+ of their 2021 peaks). Does HOOD at $50B make more sense or maybe just wait until it hits $8B. Plus the DAUs are more stabilized now that the hype has died down. And you get Dodd Frank compliant/audited accounting data instead of VC style EBITDA/DAU only data? In addition they can pick based on who's app is actually the most sticky/metrics and get to see all the apps internal metrics while doing "due diligence for a potential aquisition".

endisneigh 5y ago

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/ https://longbets.org/362/ Other people have done similar bets and they all lose on a risk adjusted, fee adjusted basis.

astura 5y ago
>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.
- endisneigh 5y ago
  I don’t disagree but my point is that an uninformed investor would be better off financially with a straight index.
  - dartdartdart 5y ago
    Wealthfront's value is that the unpassionate investor can set and forget it, instead of manually transferring every month
  - astura 5y ago
    Um... What? If you know what an index fund is, how to purchase index funds, and know which index funds to invest in, by definition, you are not an "uniformed investor." You might argue "... rabble rabble you should know these things..." but that doesn't change that a large portion of the population doesn't and is extremely overwhelmed by it. I've never used Wealthfront personally but I assume its basically like a bank account - just transfer money in and everything else is taken care of for you. That's a really, really valuable service and it's well worth the small fee for some percentage of population. Otherwise they'd 1) not invest and lose out on gains and dividends or 2) lose massive amounts of money buying financial products sold to them by "financial advisors" with a 6% load and 1% fee. (Not an exaggeration) Is it a service for me? No. But not every service is something I'd be interested in, that's ok. My little cousin wanted to save more for retirement and heard about IRAs. He asked me how to set up and IRA and recommendations on what company to use. I recommended Fidelity with just an s&P 500 index to start. He got really overwhelmed even though I offered to help him click-by-click. He decided not to set up the IRA until he found Wealthfront. He loves the simplicity and that everything is taken care of for him. He's really happy he can save for retirement without worrying about doing something "wrong." Now, my cousin is a smart guy, so I think he'll move past Wealthfront eventually once he learns more, but it's really useful for him now.

rattray 5y ago

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

deleted 5y ago
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trimbo 5y ago
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.

quickthrowman 5y ago

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.

Glyptodon 5y ago
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.
- prepend 5y ago
  I’ve been using a client based tool (Moneydance) for 10+ years and some banks did support special accounts that had read only access to ofx APIs. It was kind of nice as I didn’t have to worry about my passwords as much. It’s gotten worse over the years as banks have stopped support for open APIs. I guess because of plaid-type integrators that make custom interfaces. I’ll likely quit my bank (usaa) as they got rid of any api access unless you go through third parties. I’m not willing to give my account credentials to a third party like plaid where the downside is draining most of my liquid assets and investments.
  - mindslight 5y ago
    It feels like there should be some libre tool that automates downloading OFX through the web interfaces and keeps up with the breakage, at least for popular banks. Integrate with procmail and the like to deal with snake oil 2FA, etc.
    - prepend 5y ago
      I’ve tried gnucash a few times but it was just too much work for not enough rewards. I’ve contemplated just making my own scrape to database script because all I really want is a ledger I can query. Moneydance has been decent enough and I think I’ve paid $100-150 in 10+ years for an initial version and then an upgraded one.

dartdartdart 5y ago

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 pretty relieving not having to do that every month.

lotsofpulp 5y ago
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.
- all2 5y ago
  I have to remember to do those few clicks, though.
  - lotsofpulp 5y ago
    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?
    - all2 5y ago
      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.
  - knappe 5y ago
    Vanguard allows you to set up automated withdraws that are invested into specific funds, with one caveat: `It’s important to note that you can only automate investments into Vanguard mutual funds.` https://support.vanguard.com/tutorials/automatic-investments https://support.vanguard.com/tutorials/automatic-investments

propter_hoc 5y ago

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 that the party's ending. [0] https://www.roboadvisorpros.com/robo-advisors-with-most-aum-assets-under-management/ https://www.roboadvisorpros.com/robo-advisors-with-most-aum-... [1] https://financialpost.com/investing/wealthsimple-valuation-should-be-a-wake-up-call-for-big-banks-and-traditional-money-managers https://financialpost.com/investing/wealthsimple-valuation-s...

laluser 5y ago
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?
- cbhl 5y ago
  For what it's worth, Wealthsimple exited the US market last year and transferred all their US customers to Betterment. They seem to still be adding new products in Canada though (like a Venmo-like cash transfer system.)
jmacd 5y ago
Wealthsimple now has in house advisors who email and call you to discuss your account. There is nothing 'robo' about the business model anymore and instead they are just focused on growing AUM by talking to people and convincing them to move more of their savings/TFSA/RRSP over to them.
- blobbers 5y ago

2bitencryption 5y ago

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 maybe this a case of "know your audience"? maybe they are trying to convert the hordes of GME-pumpers to try something a bit less risky? * lots of emphasis on "emerging markets", "socially responsible funds", crypto. I've always heard the best long-term advice is to simply throw your money into an ETF tracking the s&p500 or nasdaq, but clearly wealthfront is targeting those who want some emotional connection to their savings. all in all, seems like a cool service, especially if it helps convince those to begin saving who would otherwise not be saving. [0] https://www.wealthfront.com/ https://www.wealthfront.com/

Scoundreller 5y ago
> 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.
- bdonlan 5y ago
  Fidelity also has a fully-paid securities lending offering, and I believe Ally Invest does as well. It's not just IBKR.
jonas21 5y ago
> In the first example, an investment portfolio is shown where roughly 10% of the holdings is in a group called "single stock bets." Yikes! That's 10% of the entire portfolio spread out over (presumably) multiple individual stocks, which seems reasonable to me... is it not?
somethoughts 5y ago
Maybe they were trying to differentiate themselves from the offerings of a potential acquirer and prepping themselves for aquisition - particularly perhaps once they realized they weren't going to be able to beat the legacy banks.

pyrrhotech 5y ago

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 https://grizzlybulls.com

blobbers 5y ago
Is your website built on some platform? Do you have any customers? How does your platinum plan work?
- pyrrhotech 5y ago
  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).
  - blobbers 5y ago
    This is a pretty regulated market. How did you set up the managed account?
    - pyrrhotech 5y ago
      Managed accounts must first be set up on Interactive Brokers by the client, with a margin account + futures trading permission. Then a second user must be added with Limited Trading Authorization: https://www.investopedia.com/terms/t/trading-authorization.asp https://www.investopedia.com/terms/t/trading-authorization.a.... Interactive Brokers has some standard forms to establish the contract. Once all that's set up, I run a parallel instance of my bot with your account in the cloud. Please send me a "Contact Us" or an email if you are interested and want to know more details.

pepemon 5y ago

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.?

mgh2 5y ago
One friend told me it was his way of "outsourcing investment research", whether or not that justifies these platform's "low fee" and their returns vs. DIY is another issue.
acomms 5y ago
2 things come to mind: 1. These target the large majority of people with no will or interest in researching/picking/managing their own ETF investments. 2. Robo advisers re-balance your ETF portfolio (in much the way an individual ETF would).
tanduv 5y ago
Not a comprehensive comparison, but I've been doing monthly investments into robo-advisors (Wealthfront and SoFi) as well as ETFs (SPY and VOO) for 2 years now. The returns are quite similar to ETFs, sometimes higher or lower depending on the markets.
zefhous 5y ago
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 is to buy and hold a variety of Vanguard funds and stop thinking about it.
- lotsofpulp 5y ago
  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-funds/target-retirement-funds https://investor.vanguard.com/investment-products/mutual-fun...

treebornfrog 5y ago

Tim Ferris is laughing on this one. So many intro with WealthFront for a long time...

rkalla 5y ago

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.

astrange 5y ago
Stock returns over a single year are meaningless and not what they optimize for. Their "optimization" isn't perfect (MPT has some silly assumptions) but it's made for 30 years from now.
vailripper 5y ago
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.

subsubzero 5y ago

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.

pssdbt 5y ago
Interesting, I started in 2017 and am up 40.58% all time today.
- akashshah87 5y ago
  If you had put money in VTSAX on 1/26/2017 and reinvested dividends, you would be up 101.91% with an annualized return of 15%
  - Beaver117 5y ago
    That's not the same. Money doesn't just appear all at once ready to dump on the market, we get and invest it every paycheck. So average cost basis over time gets higher as you make purchases
    - _clhx 5y ago
      annualized return is annualized return, his strategy gave him < 9% annualized return and that is being generous, saying he's invested for 4 years not 5. if you look at SPX returns over the last four years, 2018 was a negative year but each year after was between 16% and 28%. also 2017 was over 19%.
  - pssdbt 5y ago
    I mean that applies to anyone in this thread more than me specifically. I'm not saying Wealthfront is the best option, just that I've been fine with it as someone who knows nothing about investing and didn't want to keep throwing money into a savings account. And if we're being picky about time, I'm closer to 4 years in Wealthfront and was up 50% all time a few weeks ago. Still not the best, but better than savings. Just going to move it all to $DOGE now anyways.

smohnot 5y ago

470k accounts and $27B AUM, ~$60k per account. @ 25bps that would be ~$70M revenue but there is some discounting so it is probably closer to $60M 2021 was a good year for the market, a great time to be acquired. They raised in 2014 @ $750M then 2017 @$500M

whitej125 5y ago

Wealthfront (and this goes for the rest of Wall Street) are analog businesses. They thrive on mass producing a fixed set of products. Those products are ETFs, Mutual Funds... or in Wealthfront's case... a rebalancing strategy based on a 1960's white paper called Modern Portfolio Theory. Each of these players spends a ton trying to mass market these products. You have financial advisors pitching mutual funds, asset managers shilling the virtue of their shiny new ESG ETFs... and robo-advisors all promising a set-it-and-forget-it panacea. Wealthfront got commoditized. Betterment at first... but then the discount brokers came in (Vanguard, Fidelity, etc) and just had a much more effective channel (advisors!) to the end investor. If you are just selling a singular product and that product is successful, you are going to get copied and beaten by competitors with better marketing channels. Wall Street will some day transform from an analog industry of mass production to a digital one of mass personalization. The building blocks for said transformation are slowly becoming ubiquitous (fractional shares support, commission free trading, etc). Super excited to watch this happen.

RandomLensman 5y ago
If I were to guess, I'd say that world will be more expensive again for most (or a lot) of individual investors. The costs of the whole machinery and the capital necessary to maintain it will have to go somewhere. Mass personalization in investment would only really work if it makes sense to truly personalize investments given the huge uncertainties involved. But I am sure people will happily sell this and find willing buyers.
tmcw 5y ago
The current norm is that many products are focusing on the statistically optimal approach - low fee, market returns - and they're competing on price and order execution which benefits individual investors. And the future is about giving investors more ways to damage their returns by actively trading and arbitrarily customizing their strategy.

lzrs 5y ago

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 day, their fees are over 1% unless you have an ultra high net-worth. In comparison, Wealthfront can automate huge strategies for a fraction of the cost (0.25%). For example: - Direct Indexing (invest in an index by buying the stocks directly instead of a fund) - Automatic investing, rebalancing, and tax-loss harvesting (including TLHing individual stocks within an index when paired with direct indexing) - Coordinating trades between retirement and taxable accounts for optimal tax savings - Smart beta (a custom weighted indexing algorithm) 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?

robotsandcoffee 5y ago
personally my favorite feature is the "autopilot" thing, which for example dcan automatically withdraw from my checking account and invest when my checking account hits a certain threshold. so for example i can just say "if my checking account goes above $30k, deposit the rest into some wealthfront investment account." i don't think a human financial planner can do this easily? just to add to your list.
TuringNYC 5y ago
>> Yes, a financial planner can do all of this (although most don't). But when they do, they just use automated software to do it. It would be impossible to implement these strategies manually. So why even go with a financial planner when Wealthfront does the same thing, but better/cheaper? Thats the 100$B question right? Because fear. Because unfamiliarity. Also because 1% seems small, but its really more like 14% (if the average return is 7%, you're giving up 1/7 of your return!)
- 5y ago

bt3 5y ago

My first experience with Wealthfront was an IRA. After a short period (<year), I realized it was rather simplistic to take a predictable regular deposit and split it across a few ETFs to stay on track for their recommended portfolio. I ended up opening a taxable account to take advantage of tax-loss harvesting (materially more difficult to do myself). I'd be curious what proportion of their AUM sits under taxable vs retirement accounts. Nonetheless (forgive the plug), I ended up building a simple app that would help me automate the thinking of balancing my portfolio. Here's an example using a Wealthfront-genereated portfolio (ETFs + targets): https://correctmyportfolio.com/scenario/share/YISu5jI3 https://correctmyportfolio.com/scenario/share/YISu5jI3 Turns out figuring out where to optimize a portfolio to a target without selling, or other rules (like sell thresholds, cash buffers, etc.) is a bit more complicated than Excel would allow.

ppg677 5y ago

I had a lot of money in Wealthfront. It was not a good experience. First they auto-opted me into some actively managed hedge fund thingy they cooked up. As part of this auto-optin, they caused a non-trivial taxable event. And the fees increased. When I decided to bail and move my assets elsewhere, I was then left with 500 individual stock equity positions to deal with. What a mess. Took me a long time to sort out that mess and to get my assets into a more manageable situation for an individual. Of course to consolidate I had to take the tax event once they converted to long-term capital gains. I did a lot of this during spring of 2020 which was not a good time to be mucking with stock positions. I lost a fair amount of money. Finally the tax-loss harvesting is not aware of outside accounts and technically you might be violating tax rules. My accountant ultimately told me over the phone that current reporting rules essentially make this unenforceable though...but he refused to put that in an email.

happytiger 5y ago

Congratulations to Andy and the whole team. Quite the execution.

givemeethekeys 5y ago

I wonder if Wealthfront advised its members to sell all growth stocks and buy value stocks or just hang onto cash for a little while. I wonder if any advisors did this.

rifung 5y ago

I am a huge fan of the checking/budgeting features of Wealthfront. Does anyone know of a good competitor in case I'll have to jump ship? For those who don't use it, it allows you to create categories and automatically deposit money into those categories at some interval. Then you can easily transfer between those categories. I use this so that I can put some money away for expected expenses like taxes and a new car and also to budget for fun so I known what I can actually afford.