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Good to see that they at least gave some instructions on moving the money (it was the absolute minimum, to be fair). No hate to them - some business don't work

by jjice 1y ago

Good to see that they at least gave some instructions on moving the money (it was the absolute minimum, to be fair). No hate to them - some business don't work out. That said, I personally don't understand keeping my assets that I hope to retire off of someday at a startup style company. Everyone's gotta start somewhere, but financial services like this are probably a hard sell for a lot of people.

citizenpaul 1y ago
Yeah that's what I was thinking. There is 0 benefit to such a product unless the company can guarantee they will be in business for 10-20 years. Otherwise moving my money us just a big time wasting headache if the company shuts down before any benefit is realized. (<1 year... ouch to the users). It seems like a good idea. It is a margin profits play though. I know that in dealing with big money there is a lot of foot guns as far as costs. If you mess up even one thing it can cost you tens or hundreds of thousands in unexpected expenses. No offense to the founders but I'm guessing that they didn't have someone with 20+ years finance experience to make absolutely sure they never stepped on those mistakes. You'd have to operate flawlessly with only margin profits. Hopefully the founders will give us some more context on what happened.
fragmede 1y ago
The attraction is easy. Internet company means lower overhead. I'm not paying to go into a lavish office with people in it like with Fidelity, and the money just needs to sit there generating modest returns. It's all numbers on a screen anyway.
- blitzar 1y ago
  Internet company means a VC is setting a bunch of money on fire and providing you the product at a loss to them - which is your gain. They hope they can buy enough eyeballs to get their exit and the users can move on to the next revolutionary idea to giveaway a bunch of cash.
- citizenpaul 1y ago
  You completely ignored my argument. If all the product does is give you razor thin better returns than an average low cost retirement. The money you put in would need to be there for several years at miniumum. The company apparently cannot guarantee they will be in business which means you as a customer are assuming huge risk with little potential return value, in something you are supposed to be minimizing risk as a top priority. If you want to take on risk there are much better risk return ratios for your retirement money.
chis 1y ago
On the one hand I don't think there's risk of losing money with something like this, they kept the money in a third party broker and it's SIPC-insured. But it's probably good to have some humility and admit that even for me I'm not 100% confident, these rules and systems are hard to parse. I think the biggest problem with this startup was that the product they offered was so marginally different from Vanguard ETFs unless you have a super specific and unique investment thesis.
- deleted 1y ago
  [deleted]
- jjice 1y ago
  > On the one hand I don't think there's risk of losing money with something like this, they kept the money in a third party broker and it's SIPC-insured. But it's probably good to have some humility and admit that even for me I'm not 100% confident, these rules and systems are hard to parse. Oh for sure - I'm sure they did. I just still wouldn't want to bother with a turbulent company and having to migrate assets from working with a company that has less of a reputation.
eweise 1y ago
I worked for a wealth management company. The money was held at the financial institution's accounts. We just calculated when to re-balance the portfolios and executed the trades on the customer's behalf. Not sure if that's how this works.

by jjice 1y ago

citizenpaul 1y ago

Yeah that's what I was thinking. There is 0 benefit to such a product unless the company can guarantee they will be in business for 10-20 years. Otherwise moving my money us just a big time wasting headache if the company shuts down before any benefit is realized. (<1 year... ouch to the users). It seems like a good idea. It is a margin profits play though. I know that in dealing with big money there is a lot of foot guns as far as costs. If you mess up even one thing it can cost you tens or hundreds of thousands in unexpected expenses. No offense to the founders but I'm guessing that they didn't have someone with 20+ years finance experience to make absolutely sure they never stepped on those mistakes. You'd have to operate flawlessly with only margin profits. Hopefully the founders will give us some more context on what happened.

fragmede 1y ago

The attraction is easy. Internet company means lower overhead. I'm not paying to go into a lavish office with people in it like with Fidelity, and the money just needs to sit there generating modest returns. It's all numbers on a screen anyway.

blitzar 1y ago
Internet company means a VC is setting a bunch of money on fire and providing you the product at a loss to them - which is your gain. They hope they can buy enough eyeballs to get their exit and the users can move on to the next revolutionary idea to giveaway a bunch of cash.
citizenpaul 1y ago
You completely ignored my argument. If all the product does is give you razor thin better returns than an average low cost retirement. The money you put in would need to be there for several years at miniumum. The company apparently cannot guarantee they will be in business which means you as a customer are assuming huge risk with little potential return value, in something you are supposed to be minimizing risk as a top priority. If you want to take on risk there are much better risk return ratios for your retirement money.

chis 1y ago

On the one hand I don't think there's risk of losing money with something like this, they kept the money in a third party broker and it's SIPC-insured. But it's probably good to have some humility and admit that even for me I'm not 100% confident, these rules and systems are hard to parse. I think the biggest problem with this startup was that the product they offered was so marginally different from Vanguard ETFs unless you have a super specific and unique investment thesis.

deleted 1y ago
[deleted]
jjice 1y ago
> On the one hand I don't think there's risk of losing money with something like this, they kept the money in a third party broker and it's SIPC-insured. But it's probably good to have some humility and admit that even for me I'm not 100% confident, these rules and systems are hard to parse. Oh for sure - I'm sure they did. I just still wouldn't want to bother with a turbulent company and having to migrate assets from working with a company that has less of a reputation.

eweise 1y ago

I worked for a wealth management company. The money was held at the financial institution's accounts. We just calculated when to re-balance the portfolios and executed the trades on the customer's behalf. Not sure if that's how this works.