NYTimes: Inexpensive Advice for Index-Fund Investments

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livesoft
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NYTimes: Inexpensive Advice for Index-Fund Investments

Post by livesoft »

Ron Lieber has written in the NY Times about one of our favorite topics: Financial Advice For People Who Aren't Rich. This article covers Betterment, WealthFront, Vanguard, MarketRiders and many others with a nice chart for Inexpensive Advice for Index-Fund Investments.

Rather conspicuously absent from the article and the chart is a site called Bogleheads.org I would guess that it might make the list if it wasn't free.

And one thing, bogleheads.org is not a RoboAdvisor as mentioned in this video: http://www.roboadv.com/GenericPURL/Video Real human beings generally answer one's questions on this forum.
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Wagnerjb
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Re: NYTimes: Inexpensive Advice for Index-Fund Investments

Post by Wagnerjb »

livesoft wrote: Real human beings generally answer one's questions on this forum.
What do you call people who ask the OP if they have searched the internet for the answer? :D
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Re: NYTimes: Inexpensive Advice for Index-Fund Investments

Post by Grt2bOutdoors »

Wagnerjb wrote:
livesoft wrote: Real human beings generally answer one's questions on this forum.
What do you call people who ask the OP if they have searched the internet for the answer? :D
Facilitators of advice. :D
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WallyBird
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Re: NYTimes: Inexpensive Advice for Index-Fund Investments

Post by WallyBird »

There's lots of good information here, but it takes effort to find it, digest it, and apply it. Outsourcing those tasks is understandably attractive to many people, and as previous threads here and elsewhere have noted, Vanguard's new pricing raises the bar -- or rather lowers it.

It's not the sort of service I'd use, but I'd recommend it in a heartbeat to some elderly relatives who are paying twice as much -- or more.
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nisiprius
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Re: NYTimes: Inexpensive Advice for Index-Fund Investments

Post by nisiprius »

DARN, which I could remember it... flipping through some money magazine in a dentist's office there was an article that mentioned the very salient point that several firms like Wealthfront and Betterment have already folded. I have of course also forgotten (YES, I'm old) the names of the firms... they rang very faint bells of the "whatever happened to" type.

Now obviously it's not at all the end of the world if the firm goes belly up, they are just managing your funds, not holding them. It's just a PITA. But I think he might have discussed it. It sort of seems unsound to hand over the management of assets you hope to hold for decades to a firm that might not last more than a few years. It's also not the end of the world if you don't rebalance for a few years... and rebalancing is less work than transferring assets between firms can be.

Anyway I don't know what exactly is happening but cheap robo-assisted advice for the mass affluent is clearly a Meme On the Rise and getting articles, which inspire other writers to write more articles.
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Re: NYTimes: Inexpensive Advice for Index-Fund Investments

Post by SeattleCPA »

Wagnerjb wrote:
livesoft wrote: Real human beings generally answer one's questions on this forum.
What do you call people who ask the OP if they have searched the internet for the answer? :D
+1 LOL
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livesoft
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Re: NYTimes: Inexpensive Advice for Index-Fund Investments

Post by livesoft »

I predict that someone else will start a thread with a link to this article.
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countdown
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Re: NYTimes: Inexpensive Advice for Index-Fund Investments

Post by countdown »

I actually didn't know Vanguard had this service let alone was lowering their fee. Thanks for posting it.
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Re: NYTimes: Inexpensive Advice for Index-Fund Investments

Post by neurosphere »

nisiprius wrote:DARN, which I could remember it... flipping through some money magazine in a dentist's office there was an article that mentioned the very salient point that several firms like Wealthfront and Betterment have already folded. I have of course also forgotten (YES, I'm old) the names of the firms... they rang very faint bells of the "whatever happened to" type.
I remember the same (or similar) article, not about robo-advisors, but about advisors for the masses, i.e. $20-$50 per month for unlimited access to a planner or something like that. Was one of them Learnvest perhaps? The article I'm thinking of had an interview with the founder, and how after an initial startup period, she was afraid she would go under, and was having to cut the salary of her planners. I got the impression from reading the article that her business model would not hold up. The article referred to several other players who were coming on board, which would make it even harder to sustain. But I also cannot think of any specifics.
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Re: NYTimes: Inexpensive Advice for Index-Fund Investments

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Re: NYTimes: Inexpensive Advice for Index-Fund Investments

Post by livesoft »

countdown wrote:I actually didn't know Vanguard had this service let alone was lowering their fee. Thanks for posting it.
There is a thread or two about it on the bogleheads forum.
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neurosphere
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Re: NYTimes: Inexpensive Advice for Index-Fund Investments

Post by neurosphere »

livesoft wrote:The LearnVest article: http://www.nytimes.com/2013/07/27/your- ... asses.html
thanks! I think that was it. Although it was much more optimistic than I remembered it. I may have combined two different articles in my head into one. I guess we'll see in a few years which firms make it. I would like to think that 1% AUM advisors will NOT make it due to this competition, but I have a feeling they will always be around.
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Re: NYTimes: Inexpensive Advice for Index-Fund Investments

Post by steve_14 »

Lots of choices there for folks who simply won't spend a few hours educating themselves and investing directly. Too bad that wasn't an option in the article.
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Re: NYTimes: Inexpensive Advice for Index-Fund Investments

Post by sunnywindy »

The roboadvisor (eMoney) video was a little bit cheesy. I have nothing against robo advisors or human advisors, but the blatant 'tug at the heart strings' persuasion is exactly what many who come to this site feel trapped in; the personalities and personal relationships many advisors have with some clients is exactly what makes it difficult for clients to talk with their adviser.
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Tycoon
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Re: NYTimes: Inexpensive Advice for Index-Fund Investments

Post by Tycoon »

livesoft wrote: Real human beings...
What other kind of human beings are there? Teenagers?
Emotionless, prognostication free investing. Ignoring the noise and economists since 1979. Getting rich off of "smart people's" behavioral mistakes.
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Re: NYTimes: Inexpensive Advice for Index-Fund Investments

Post by neurosphere »

sunnywindy wrote:The roboadvisor (eMoney) video was a little bit cheesy. I have nothing against robo advisors or human advisors, but the blatant 'tug at the heart strings' persuasion is exactly what many who come to this site feel trapped in; the personalities and personal relationships many advisors have with some clients is exactly what makes it difficult for clients to talk with their adviser.
The eMoney video was indeed a little cheesy. As with any sales pitch, it has some truths such as to beware of cookie-cutter advice which may miss some element that a human eye/ear and a long conversation may pick up. But as you mention, you might pay a ton more for "personal" advice which may be no better and possibly much worse.

For those who don't know, eMoney is a financial planning product used by financial planners to design and present financial plans. It's perhaps one of the "Big 4" such tools out there. It is certainly the most expensive (about $3600/year), which is about double or triple the middle of the pack. I actually had a one month trial of it, and it WAS really nice. I wish I still had access just to play around and make pretty pictures and presentations. But not for $3600 EACH year. :shock:

It seems like eMoney is worried that there may be fewer premium-priced advisors who can afford to purchase their premium product in the future, and has created an add to counter that. One thing eMoney does is put together a series of videos for many situations (narrated by Tom Selleck), which advisors can brand with their own logo and put on their website or otherwise make available to clients. I assume this ad is designed for something similar. Yep, it can be found here: http://www.emoneyadvisor.com/emacorp/marketing.aspx The top 4 videos have a female voice I can't place (can anyone?) and the videos towards the bottom feature Tom. :D

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