Wealthfront

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
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J295
Posts: 2601
Joined: Sun Jan 01, 2012 11:40 pm

Wealthfront

Post by J295 »

Anyone have any material concerns about using Wealthfront?

One of our adult children prefers using it, at least at this stage in his life. He and I navigated the internet for a little due diligence over Thanksgiving and it seemed fine. He knows about the 25 basis points and it is worth it to him for the services provided.

Thank you.
Day9
Posts: 988
Joined: Mon Jun 11, 2012 6:22 pm

Re: Wealthfront

Post by Day9 »

These "robo-advisers" are not much more than Target Date or Life Strategy funds that are marketed differently. The only difference I've found is some of these firms will do Tax Loss Harvesting for you if you meet certain requirements. I'm not sure if this is worth the fee. Try searching this forum for Wealthfront, Betterment, and robo-advisers for more discussion.
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randomguy
Posts: 9205
Joined: Wed Sep 17, 2014 9:00 am

Re: Wealthfront

Post by randomguy »

J295 wrote:Anyone have any material concerns about using Wealthfront?

One of our adult children prefers using it, at least at this stage in his life. He and I navigated the internet for a little due diligence over Thanksgiving and it seemed fine. He knows about the 25 basis points and it is worth it to him for the services provided.

Thank you.
Search the website and you will find a ton of threads about wealthfront. The major complaint is the fee and you can debate if it is worth it or not. There is a slight concern that when you hit the direct indexing level that you get a bit locked into wealthfront.
livesoft
Posts: 73338
Joined: Thu Mar 01, 2007 8:00 pm

Re: Wealthfront

Post by livesoft »

For all these roboadvisors, my material concern is the cost to get out of them when you realize you no longer need them.

Also, they have not been around long enough to really understand how good their 1099-DIV and 1099-B statements are. Perhaps we will see more on those this upcoming tax season.
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Biffer
Posts: 119
Joined: Wed Jan 30, 2013 4:34 pm

Re: Wealthfront

Post by Biffer »

livesoft wrote:Also, they have not been around long enough to really understand how good their 1099-DIV and 1099-B statements are. Perhaps we will see more on those this upcoming tax season.
The first 1099 we see for a Wealthfront 1000 account (1,000 individual stocks, with tax loss harvesting) might be a real page-turner.
lee1026
Posts: 395
Joined: Sat Jun 21, 2014 7:47 pm

Re: Wealthfront

Post by lee1026 »

Another issue is that they may not be great at running investments. They seem to suffer from performance chasing as much as your average consumer. For example, when I checked their suggest investments this time last year, they had a largeish allocation to natural resources in the form of commodity funds. After the staggering fall in commodity prices, the allocation to natural resources became energy stocks. If you had money with them, you probably brought high, sold low. The history of investing like a retail investor suggest that this may not be greatest idea in the world.

I suspect they will do the same with other investments as well.
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