Anyone use an investing service like WealthFront or FutureAdvisor?

C

CLKeenan

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Jun 24, 2006
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For those of us who don't want to actively manage a portfolio or pay the high fees of managed funds, have any of you tried working with either of those companies?

http://www.wealthfront.com
http://www.futureadvisor.com

Basically, you put in your age, risk tolerance, and your current accounts (pulls in account details like Mint.com) and then it provides recommendations how to optimize your diversification, fee efficiency, tax efficiency, performance, etc.

Any thoughts?
 


CLKeenan said:
For those of us who don't want to actively manage a portfolio or pay the high fees of managed funds, have any of you tried working with either of those companies?

http://www.wealthfront.com
http://www.futureadvisor.com

Basically, you put in your age, risk tolerance, and your current accounts (pulls in account details like Mint.com) and then it provides recommendations how to optimize your diversification, fee efficiency, tax efficiency, performance, etc.

Any thoughts?
Click to expand...
I heard of WealthFront through Josh Brown, who I used to work with and am friendly with. He has a good, comprehensive take on "robo advisors" here, only last month: My Thoughts on Robo Advisors | The Reformed Broker

But what I recall though, and can't find, was a fairly entertaining social media dustup between Josh and a founder of WealthFront about a year ago, maybe longer. The WealthFront guy should never have waded in considering Josh is a beast on Twitter and a CNBC contributor who is used to defending his positions. That the WealthFront guy didn't win on points mattered far less than his skipping out onto another man's turf unprepared. It was much like when a hapless entrepreneur starts a WF thread with the promise of tits only to deliver a skimpy business pitch - what follows is an enjoyable matter of course.

It's with good reason that financial marketing tends to highly conservative. When I see a money management site that says "Join the revolution" I'm mentally checking out before I find out what their service is.
 
I don't use a service like that, but why not just put everything into an S&P 500 etf and forget about it?

The fee for both of those services isn't huge, but it's substantial. Can they even make you more than the fee vs the S&P 500 return over long periods of time?
 
They have a couple of advantages I think are worth noting:

1) The Fees are drastically lower than any guy in a suit is going to be able to give you and because it's algorithmic there is literally no bias.

2) The FA premium offering will do all the work for you. As your positions come home to roost, they'll reinvest them automatically for you to optimize for risk, TAXES (this is a big deal), and diversity.
 
how do these differ from betterment.com? I threw some $$$ sitting from savings into a betterment acct which is doing better than the standard .5%
 
Put 50% in some index fund (S&P 500).
Put 50% in government bonds.
Rebalance portfolio twice a year.

Thank me in 20 years.
 
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