UBS Acquires Wealthfront for $1.4B
I've been researching robo-advisors quite a bit recently. They are really interesting and innovative.<p>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.<p>In comparison, Wealthfront can automate huge strategies for a fraction of the cost (0.25%). For example:<p>- Direct Indexing (invest in an index by buying the stocks directly instead of a fund)<p>- Automatic investing, rebalancing, and tax-loss harvesting (including TLHing individual stocks within an index when paired with direct indexing)<p>- Coordinating trades between retirement and taxable accounts for optimal tax savings<p>- Smart beta (a custom weighted indexing algorithm)<p>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?