SoFi Wealth Robo-advisor?

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ericcohen
Posts: 22
Joined: Wed Dec 26, 2018 9:34 pm

SoFi Wealth Robo-advisor?

Post by ericcohen » Mon Feb 11, 2019 9:18 pm

Any reason NOT to use this? It looks legit and like a Boglehead's dream.

-Zero management fees
-Zero transaction fees
-Monthly rebalancing
-low expense ETFs
-All the ETFs used to construct your portfolio are well known --Vanguard and other, respected ETFs

Only downside I see: No tax loss harvesting, but they are planning on getting it in 2019.

I looked into the portfolio they would construct for me, including what ETFs they would use and they hit the nail on the head, including using MUB in the after tax account, Vanguard total stock market and emerging market stocks in reasonable allocations.

This looks too good to be true. Give me some good reasons to avoid this. TIA.

yogesh
Posts: 143
Joined: Thu Oct 11, 2012 6:20 pm

Re: SoFi Wealth Robo-advisor?

Post by yogesh » Mon Feb 11, 2019 9:31 pm

M1, Clink, So-Fi, WiSeBanyan all do auto-investing at zero fees. https://investorjunkie.com/35919/robo-advisors/
All robos will go bankrupt if Vanguard/Fidelity/Blackrock comes up with "LifeStrategy Taxable" funds with stock+muni like TargetRetirement. All of these robos make it easy to buy/sell/rebalance multiple ETFs in keeping your asset allocation accurate much like TR/LS funds do.
Emergency: FDIC | Taxable: VT | Retirement: TR2040

typical.investor
Posts: 514
Joined: Mon Jun 11, 2018 3:17 am

Re: SoFi Wealth Robo-advisor?

Post by typical.investor » Tue Feb 12, 2019 9:25 am

ericcohen wrote:
Mon Feb 11, 2019 9:18 pm
Any reason NOT to use this? It looks legit and like a Boglehead's dream.

-Zero management fees
-Zero transaction fees
-Monthly rebalancing
-low expense ETFs
-All the ETFs used to construct your portfolio are well known --Vanguard and other, respected ETFs

Only downside I see: No tax loss harvesting, but they are planning on getting it in 2019.

I looked into the portfolio they would construct for me, including what ETFs they would use and they hit the nail on the head, including using MUB in the after tax account, Vanguard total stock market and emerging market stocks in reasonable allocations.

This looks too good to be true. Give me some good reasons to avoid this. TIA.
Per their FAQS, they ditched their management fees and now have no revenue. They will update you when they have it figured out. Seems like they plan to take the interest off of cash in your account and lend out your securities.
For SoFi Wealth, we used to make money from management fees, but we recently decided to offer SoFi Wealth with no SoFi management fees. We don’t make money from it at all — really! We are also working on growing our investment suite to include access to individual stocks and ETFs, where we earn some money from the interest on the cash and securities held in an investment account. We’ll be sure to update you on any changes we plan to make.

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sunnywindy
Posts: 410
Joined: Sat Jan 18, 2014 4:42 pm
Location: Wilmington, NC

Re: SoFi Wealth Robo-advisor?

Post by sunnywindy » Tue Feb 12, 2019 10:22 am

For SoFi Wealth, we used to make money from management fees, but we recently decided to offer SoFi Wealth with no SoFi management fees. We don’t make money from it at all — really! We are also working on growing our investment suite to include access to individual stocks and ETFs, where we earn some money from the interest on the cash and securities held in an investment account. We’ll be sure to update you on any changes we plan to make.
[/quote]

The last sentence (and paragraph) is a red flag for me.

Re business plans: They started a business under one business plan. Then, they rejected that business plan and adopted another business plan. But, it doesn't stop there - they are planning more changes.

Re Asset allocation: they are talking about individual stocks which previously wasn't in their (or my) investment allocation.

I strongly believe my money is not another company's vehicle to test out their business plans nor their asset allocation hunches. By using this new company, you are just a test subject for their business ideas. Is that a risk you want to take?
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