Robo-advisors

Asset allocation, risk, diversification and rebalancing. Pros/cons of hiring a financial advisor. Seeking advice on your portfolio?
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Re: Robo-advisors

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AltaRed wrote: 07 Nov 2017 21:34 I've only started digging into WealthSimple, .......................

Here are their ETFs that make up their model portfolios https://help.wealthsimple.com/hc/en-ca/ ... represent-

.........
Looking at the link I see VTI as a US component. Isn't VTI considered a US asset for US estate tax purposes? I'm planning to trim my VTI to less than $60K and replace it with VFV and/or VUN to avoid any hassles (no, AFAIK, I won't be subjest to the tax) but less potential problems for executor(s).

Am I crazy or are they?
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Re: Robo-advisors

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I'd suggest a robo-advisor would normally pick one of the most cost efficient ETFs to be part of their core ETFs, so VTI fits that bill perfectly. WealthSimple itself says they do forex at cost, i.e. 50bp (if I recall correctly) rather than 200bp or so retail rates, so that is good for investors who would contract portfolio management with robo-advisors. DIYers of course would use Norbert's Gambit, esepecially for significant sums.

The potential US estate tax issue has mostly faded away given the base asset level in the formula in recent times is so large (circa USD $6 million), no one who is likely to use a robo-advisor would come close to having a US estate tax issue. It has pretty much become a red herring, and the issue may totally fade away if Trump has his ultimate way of eliminating estate taxes in the USA. Regardless, Congress and presidents are fickle and it should not be forgotten entirely. One's executor may need a tax accountant to prepare a US information return, which is not hard to do, just to close the loop.

Plug in some numbers here for scenarios http://www.taxtips.ca/calculator/us-estate-tax.htm

For myself, I have a mix of both US domiciled and Cdn domiciled ETFs for my ex-Canada holdings just to be safe, but would prefer to only have the US domiciled equivalents for their lower cost.
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Re: Robo-advisors

Post by DanH »

True that most robo-advisor clients are unlikely to be affected by U.S. estate taxes based on either the new or old thresholds. But the bigger issue (in applicability, not necessarily magnitude) is how to invest for clients who are considered U.S. persons (and in turn have a U.S. tax reporting obligation). These people (generally U.S. citizens regardless of residency) will have an easier life if they avoid Canadian-domiciled investment funds of all kind (i.e. mutual funds, pooled funds, closed end funds, ETFs, etc) since they are considered Passive Foreign Investment Companies (PFIC). Might be okay for these folks to invest in PFICs but only if the funds produce the annual information form (AIF) to facilitate IRS tax reporting.

Their gathering of investor information should uncover whether a client is or is not a U.S. person. Accordingly, I wonder if the folks at Wealth Simple and other robos have considered this and as a result use IRS-friendly ETFs specifically for those people. I don't know the answer but any U.S. person considering a robo should ask before becoming a client. It's a mess to deal with this afterwards.
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Re: Robo-advisors

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I would hope that would be part of the indentification process but until one goes through the application process, we do not know. Although WealthSimple was responsive to my questions on crystallizing cap gains. I imagine they'd respond to this question too. Course that is only one robo-advisor of many.
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Re: Robo-advisors

Post by Taggart »

Haven't delved into them, but according to Andrew Hallam in Millionaire Teacher Second Edition, American expatriates have access to at least three U.S. based robo-advisors. Assetbuilder, PlanVision, or RW Investment Strategies.
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Re: Robo-advisors

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Behind the G&M paywall:

Royal Bank of Canada to launch its own robo-adviser business - The Globe and Mail
The platform, RBC InvestEase, is a new and separate business for Canada's largest bank. The platform will offer automated investment advice and discretionary portfolio management, delivered through a digital platform and supported by accredited portfolio advisers....

The online platform will roll out on Wednesday for a pilot test phase to a small group of Ontario-based RBC employees, Ms. Kent said (a wider launch date for the general public has not been set).
And:

Which robo-adviser is right for you? Here is 2017's definitive guide - The Globe and Mail
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Re: Robo-advisors

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Rob Carrick has done his annual update Rob Carrick’s 2018 robo-adviser guide: Find the right firm for you - The Globe and Mail
Rob Carrick wrote:The Globe and Mail robo-adviser guide is designed to show what’s available in the robo-world – the firms, the fees, the investment approaches and more. This year’s roster of robos include Mylo and Planswell, which are financial apps that offer a robo-adviser as part of their overall services. RBC InvestEase was invited to participate, but declined because it had not yet launched fully across Canada.
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Re: Robo-advisors

Post by Peculiar_Investor »

An "Exclusive" from the G&M ...

Vanguard, the global low-cost investing giant, is set to launch a robo-adviser service in Canada - The Globe and Mail (paywall)
Clara O'Hara wrote:Global investment giant Vanguard Group is set to launch a Canadian robo-adviser service within the next 18 months in a move that will bring a formidable new competitor to the increasingly crowded field of digital portfolio management.

Vanguard Investments Canada Inc., the third largest provider of exchange-traded funds in the country by assets, will introduce a digital online advice platform for retail investors, according to three sources with knowledge of the plans.

The online platform would be the first digital advice service launched by a major independent asset manager in Canada, and the first in-house direct-to-consumer offering for Vanguard Canada. Currently, Vanguard mostly sells its products in Canada through financial advisers.
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Re: Robo-advisors

Post by AltaRed »

Very interesting indeed. That will cause current players to look over their shoulders. Problem with at least some of these robo-advisors though is that they will have a set suite of ETFs they want to use. Great for those starting out, or with portfolios with minimal unrealized cap gains.

Doesn't really help someone who wants to hand over the reins on an existing portfolio with beaucoup unrealized cap gains.
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Re: Robo-advisors

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Looks like Robo advisors in Canada have now amassed $5 Billion in AUA according to this G&M article

Whats interesting is WealthSimple has $4.3B of those assets. Can all the other Robos keep the lights on with so few residual assets ?
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Re: Robo-advisors

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Don't forget that Wealth Simple acquired $300 million of AUM when it purchased ShareOwner Inc. And it's that platform through which it allows DIY investors to trade stocks for free. It's an interesting idea since Wealth Simple is figuratively-speaking handing guns to trigger happy investors; which yields two benefits to WS. First, it will give them a fascinated view of (and plenty of data on) how investors behave with individual stocks when all barriers to trading are removed. They could potentially monetize that data; and could use it to do fascinating behavioural research. Second, when people hit a wall chasing trendy things and lighting their money up in flames; WS will be there waiting to rescue them - offering to manage their money more profitably (e.g., just click here to transition to professional portfolio management). And this is a way to monetize the data. They could cater messages to each individual based on their rates of return.

Vanguard will be an enviable competitor. It seems WS is relying on the first mover advantage (oh, and ~$265M of capital) to an extent for its success and sustainability. But if the U.S. is any indication, the first movers may be left in Vanguard's dust.

Moreover, a contact of mine maintains that the cost of robo-advice will trend toward zero. It's hard to imagine but he claims that a smart person or two (maybe even someone we all know ;)) could create a user interface with a questionnaire that maps to one of a handful of model portfolios - and give it away for free. If this could be linked to a discount broker for seamless execution; he could be right. But I think that's where his reasoning breaks down.

Discount brokers were already working on such technology when it was ruled "advice" (a problem for discount brokers that rely on exemptions from the suitability obligation). And that scared them. So it's not clear that they'd be allowed to 'plug in' a third party application/UI. All to say, robos as we know them are likely to stay. But WS' 50 bps is likely to come under pressure.
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Re: Robo-advisors

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DanH wrote: 31 May 2019 15:44 Moreover, a contact of mine maintains that the cost of robo-advice will trend toward zero. It's hard to imagine but he claims that a smart person or two (maybe even someone we all know ;)) could create a user interface with a questionnaire that maps to one of a handful of model portfolios - and give it away for free.
A roboadvisor like that shouldn't take too much resources to put together. If it was developed by someone with professional clout (check), supported by a DIY community (check) that is surrounded by DIY bloggers/influencers (check), it could certainly take off. Make it open source, and connect it (or add functionality related) to personal accounting software, and you have a winner.

The problem I anticipate (and you'd know much better) is regulatory. Roboadvisor have not stood the legal/regulatory test yet. Institutions using them have likely front-loaded their projects with regulatory and legal costs, and still wouldn't know whether they'd win. Calling these robot advisors probably won't help future court cases.

The reason for high costs, is that they are cannibilizing products. The better a broker designs it, the less revenue and profit they generate. With adequate adoption, a roboadvisor could certainly lower its (internal) cost below 1bps. How does one grow and make profits though, especially when it rivals and cannibalizes MF trailer fees and stock trading commissions. You have to either:

1. Find a revenue-model that works: account management fees, 3rd party "trailers" from ETF selection, securities lending, profile marketing, ancillary services, etc.

Or

2. Have an independent ETF company put it together (Vanguard, Horizon, etc.) for their own benefit.

Or

3. Have it done by someone with truly altruistic motives (and we're back to the open source model ... I can help anyone with such motives, but I wouldn't know how. My development skills are way too old. I've been out of the industry, online security, SaaS and cloud services for almost 3 years niow, which starts to look like light years.
If this could be linked to a discount broker for seamless execution; he could be right. But I think that's where his reasoning breaks down.

Discount brokers were already working on such technology when it was ruled "advice" (a problem for discount brokers that rely on exemptions from the suitability obligation). And that scared them. So it's not clear that they'd be allowed to 'plug in' a third party application/UI. All to say, robos as we know them are likely to stay. But WS' 50 bps is likely to come under pressure.
I doubt that you'll ever see that, unless it is a proprietary roboadvisor supported by the broker itself (Blackrock/RBC, BMO, etc.) or a powerful partnership (Vanguard/Questrade, but that's a lot to bet for a behemoth like Vanguard on a regional project that they don't need.

As adoption increases, you'll witness a descent into lower margins, but the platforms are currently priced to account for low adoption, low competition and a desire to cannibalize other revenues as little as possible.
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Re: Robo-advisors

Post by DanH »

Clason wrote: 01 Jun 2019 09:27 ...and connect it (or add functionality related) to personal accounting software, and you have a winner.
That may make it a winner for many regular posters here but what would really make it a winner for the broader audience - and the more likely target of any robo advisor - is to connect it to a brokerage platform for execution and rebalancing.

NOTE re: edits: I just re-read the Globe article on WS' latest capital raise and I misread it. Total capital raised in this round was $100M but that was shared between Allianz and Power Financial. They don't disclose the specific breakdown other than saying that Power contributed at least $30M. So my guess is that Allianz would have invested between $50M and $70M but that's really a guess. But that would imply a business value for WS of ~$500M to $700M (not $1 billion as claimed below). I've left my original comments but cross them out since they're wrong.
Clason wrote: 01 Jun 2019 09:27 The problem I anticipate (and you'd know much better) is regulatory. Roboadvisor have not stood the legal/regulatory test yet. Institutions using them have likely front-loaded their projects with regulatory and legal costs, and still wouldn't know whether they'd win. Calling these robot advisors probably won't help future court cases.
Well, 2.5 years ago I wrote about how regulations would limit robos' scalability. Wealth Simple, at the time, had just been slapped by the OSC for failing to actually speak to each of its clients to ensure suitability. The OSC required WS to go back and speak to each client at the time - not sure how they did that since they had nearly 20k clients and a handful of individual registrants - and make sure that proper minimum conversations were had/documented. As an aside, what irks me is that they knew the rules all along; made a choice not to follow them; and then lobbied the OSC after the fact to change the rules [$]. But it worked because the OSC later said that if WS make its profiling questionnaire sufficiently detailed - covering more situations by asking more and specific questions - that it could avoid having to speak/correspond directly with each client.

So regulations were a problem for them until they found a way to remove that hurdle. Regulations will no longer be a hindrance on the path to great scale.
Clason wrote: 01 Jun 2019 09:27The reason for high costs, is that they are cannibilizing products. The better a broker designs it, the less revenue and profit they generate. With adequate adoption, a roboadvisor could certainly lower its (internal) cost below 1bps.
I'm highly confident in saying that WS isn't close to being profitable despite its > $4 billion in assets under management. It will take them a while longer to hit profitability. The latest round assigns WS a business value of more than $1 billion. At 50 basis points per year (on $4 billion) that's $20 million of annual revenue. That's 50x revenue - which is in the ballpark of dot-com acquisition valuations (recall JDS Uniphase acquired a business at 50x revenue just before the crash). If WS was presented as a potential investment, I'd model that pricing pressure will drive its fee realization down to 25 basis points - making its valuation even richer.

What I don't know is the total market potential in Canada. WS has launched in the US and the UK but I'm assuming that they will have a tough time breaking into those markets and building real market share. Sorry for the tangent, but you mentioned profitability.

And costs will be a lot higher than 1 bp. Based on the extent of advertising, their client acquisition costs must be awfully high. That will fall as they build market share and brand awareness but boy it's got to be awfully expensive to acquire each client. And that's a problem when your average client has $30k to invest - generating $150 per year per client. So client acquisition cost is key. And scale - much more than a traditional advisory firm - is a must. But big scale. If I took a wild guess - not well thought out at all - I'd say that something ~$50 billion total is required.

To put their business value in perspective, WS is currently valued at 25% of AUM. The richest acquisition I can recall in my career occurred at ~11% of AUM for a much higher margin business whose fees were not under pressure and with much more predictability in revenues and cash flows (which were abundant). Power Financial may prove to be very smart on this deal but boy they're wagering a lot of dough (though admittedly not that much in the context of their business).
Clason wrote: 01 Jun 2019 09:27How does one grow and make profits though, especially when it rivals and cannibalizes MF trailer fees and stock trading commissions.
If a robo is independent, there is no cannablization. But all of the first robos are majority or minority owned by an asset manager - so your cannablization comment is valid. We're seeing it with mutual fund companies that have jumped into launching ETFs. And we will see this as an issue requiring careful balance by brokerage firms and asset managers that own/launch a digital platform.
Last edited by DanH on 03 Jun 2019 17:04, edited 2 times in total.
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Re: Robo-advisors

Post by Clason »

Very interesting and informative, as always.

My comments on "1bps" referred to development amortization and operating costs. In my mind, the incumbents already have a brokerage platform (WS' costs included that additional implementation) and a client pool (I suspect roboadvisors are mostly about stopping the bleeding for an asset manager).

Similarly, an open source equivalent (without brokerage integration and without client acquisition costs) should equally be affordable.
DanH wrote: 01 Jun 2019 17:51 To put their business value in perspective, WS is currently valued at 25% of AUM. The richest acquisition I can recall in my career occurred at ~11% of AUM for a much higher margin business whose fees were not under pressure and with much more predictability in revenues and cash flows (which were abundant).
It has a lot to do with the market's perceived prospective growth, much in the same way as retailer Amazon has enjoyed higher P/E ratio than any traditional retailers regardless of the fact they may have had higher margin, more predictable revenues, more predictable cash flows and a model that may not have been under pressure.
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Re: Robo-advisors

Post by DanH »

Your comments around amortization of up front costs + ongoing variable costs makes sense. What's missing, however, is the up front cost of the brokerage platform they purchased (via ShareOwner Inc). They've built a proprietary technology platform I'm told so that's a big up front cost. And I don't know how much of the $265 million war chest remains but you could argue that at least the initial period of advertising is a big up front investment in brand-building.

But part of their ongoing costs - one of those variable costs - is the cost of acquiring the next client. I haven't even attempted any calculations but even at the current scale, I'm guessing their running costs are much more than 1 bp. If they are not profitable today at $4B and 150k clients; then they will need even greater scale to drive their running costs anywhere near the 1bp level.

The robo model, as it exists today, is scalable. The attraction of fully scalable businesses is that beyond a certain point, marginal revenue is extremely profitable. But until you hit that certain point, it's a slow climb upward - logging red ink along the way. But eventually, the benefits of scale and operating leverage kick in - making a high % of each extra dollar of revenue fall to the bottom line. WS has a long way to get to that point based on the U.S. experience and the massive capital raise thus far.
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Re: Robo-advisors

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Behind G&M paywall however extract from Flipboard is publicly posted:
Canadian robo-adviser Planswell is closing down after losing a $20-million round of funding from a group of investors that included Sun Life Financial Inc. Planswell chief executive officer Eric Arnold announced the closing and the layoffs of 57 employees on the company’s website on Monday …
The Planswell website is also posting thanks and goodbye...
Goodbye, Planswell…

You started off as an idea. A brilliant idea. People started to follow you. You became a movement. You changed lives. You grew. Oh, how you grew. In leaps and bounds.

In four years, you grew from a little idea to a team of 57 amazing people sharing you with the world. Thousands of people built financial plans. Hundreds of thousands of dollars were saved through better advice. Over a hundred people left an uninterrupted streak of enthusiastic 5 star Google reviews.

You did absolutely what was in each client’s best interest and you delivered that actionable insight in only a few short minutes – for free. You proved you were needed in all 18 countries we tested. This year alone you were ready to launch in 6. You proved you were capable of finding hundreds of thousands of new users per day.

You were built on a series of miracles. We were one miracle short…
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Re: Robo-advisors

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Sumaco wrote: 06 Nov 2019 09:54 Behind G&M paywall however extract from Flipboard is publicly posted:
Canadian robo-adviser Planswell is closing down after losing a $20-million round of funding from a group of investors that included Sun Life Financial Inc. Planswell chief executive officer Eric Arnold announced the closing and the layoffs of 57 employees on the company’s website on Monday …
The Planswell website is also posting thanks and goodbye...
Goodbye, Planswell…

You started off as an idea. A brilliant idea. People started to follow you. You became a movement. You changed lives. You grew. Oh, how you grew. In leaps and bounds.

In four years, you grew from a little idea to a team of 57 amazing people sharing you with the world. Thousands of people built financial plans. Hundreds of thousands of dollars were saved through better advice. Over a hundred people left an uninterrupted streak of enthusiastic 5 star Google reviews.

You did absolutely what was in each client’s best interest and you delivered that actionable insight in only a few short minutes – for free. You proved you were needed in all 18 countries we tested. This year alone you were ready to launch in 6. You proved you were capable of finding hundreds of thousands of new users per day.

You were built on a series of miracles. We were one miracle short…
"We screamed in silence, for a month, as the world crashed down around you. Our leadership spent every waking moment on emergency calls and in board rooms while our team broke client service records… it wasn’t enough. Our hearts were ripped from our chests. You could not be saved." Jeez...
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Re: Robo-advisors

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Drama..... Read somewhere recently that even WealthSimple isn't profitable yet as they build out their offerings to try and be a one stop financial shop. One of the reasons I cited for dumping PWF this week.
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Re: Robo-advisors

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AltaRed wrote: 06 Nov 2019 18:09 Drama..... Read somewhere recently that even WealthSimple isn't profitable yet
You likely read the Report on Business magazine, Hip robo-adviser Wealthsimple’s audacious plan to take on the big banks - The Globe and Mail
Joe Castaldo wrote:Wealthsimple is still in the red, and robo-advisers around the world are struggling to turn a profit. Spending heavily on marketing to attract millennials with few assets, then charging a small management fee, has proven a sure-fire way to lose money. Katchen does have a sizable backer in this quest, though. Power Financial Corp. has invested $238 million and, through its subsidiaries, holds a voting interest of 88.9%. On top of that, Power teamed up with the digital investment arm of Germany’s Allianz Group to sink another $100 million into Wealthsimple in May.
Later in the article
Joe Castaldo wrote:Scaling is still Wealthsimple’s focus, not profitability. “If we decided we really wanted to ramp down our marketing spend and really focus on profits, that would not be a hard thing to achieve.” Pressed on when that might happen, Katchen brings up Amazon, a company notorious for ignoring profits to pursue growth. “I think we have a once-in-a-generation opportunity to reshape this industry,” he says.
While I wish him well, entrepreneurs tend to focus on those that have succeeded and ignore all those that failed.
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Re: Robo-advisors

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But getting out of the starting gate in a big way and staking out territory before the hordes get their battle plans going is probably not a bad idea. There will be a time to cut costs (marketing perhaps) and boat anchor offerings on the fringe. If nothing else, robo-advisory firms are shaking up the industry a bit making everyone else take a hard look at their own business models.

I think it was also on G&M where I read that financial advisory "subscription services" are coming on strong. Basically fee-for-service to set up a financial plan and then a monthly retainer to be, I suppose, a lifeline for those who just don't want, or don't have the confidence, to fly completely solo. This latter thing isn't that far off some of the recommendations on this forum from time to time to get a financial plan done, and then to re-visit/re-fresh every 5 years or so.
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Robo-advisor Planswell shuts down

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Canadian robo-adviser Planswell is closing down after losing a $20-million round of funding from a group of investors that included Sun Life Financial Inc.
Not sure if this Globe story is behind paywall or not...
https://www.theglobeandmail.com/busines ... tors-pull/
Planswell entered the industry as a small startup in January, 2018, offering Canadians free online financial planning services, including investments, insurance and mortgage advice
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Re: Robo-advisors

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I'm starting to think that robo-advisors are doomed anyway. I wonder if anyone that is sufficiently awaken to leave a full-service salesperson has not thrown the towel on active management anyway. I haven't looked at the marketing arguments or the sales strategy of these outfits. Is there room in the for an intermediary fee-sucking provider for hands-off investors that no longer buy the 2% MFs but are nit ready for all-in-one ETFs like VBAL, VGRO or VCIP?

VBAL probably does enough to remove the complexity of rebalancing 3 ETFs, so that it handles 90% of the reason to go to a robo-advisor, at a much lower cost and with less intimidation. If I'm worried about the unknown, there is no way I'll think that opening an account with a new financial institutions where a robot makes decisions about my money in a black box can reduce stress or complexity.

Opening a Wealthsimple account cannot be made simpler, cheaper or less intimidating than just opening a brokerage account with one's bank, and putting it all in VBAL.
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Re: Robo-advisors

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Not everyone is ready to fly solo, and that is the REAL point. They are tired of high cost advisors, whether commission based, or % of AUM, and what that does to mediocre returns, but can't bring themselves to NOT want some support/assurance from another source. The thing that can be attractive about a robo-advisor is the human interface when setting up the account and picking a profile type, and then the perception someone is minding the robots, and someone can be a phone call away.

I have had about half a dozen, perhaps a few more, discuss financial planning with me and seek opinions on advisors and types of accounts. Almost NONE of them are ready to bail completely without a lifeline of some sort, and probably shouldn't do so given their temperament and lack of determined enthusiasm. I have yet to strongly encourage anyone who has sought my opinion to go DIY for those reasons, but I do point them to Finiki for further thought and consideration if they eventually want to go that next step.

As has been mentioned by others, a typical robo-advisor is maybe 0.3-0.5% of AUM plus ETF MERs, so not hugely less than a % or AUM advisor, but still less. It's a step. If DanH is reading this, I'd like to hear more from him on what I hear is an upcoming? trend? on subscription based financial planning. This is a spin on fee-for-service with a bit more hand holding that might close this gap.
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Re: Robo-advisors

Post by Clason »

AltaRed wrote: 07 Nov 2019 18:24 Not everyone is ready to fly solo, and that is the REAL point. They are tired of high cost advisors, whether commission based, or % of AUM, and what that does to mediocre returns, but can't bring themselves to NOT want some support/assurance from another source. The thing that can be attractive about a robo-advisor is the human interface when setting up the account and picking a profile type, and then the perception someone is minding the robots, and someone can be a phone call away.
You describe a placebo being sold at 50% discount from the real medicine. I'd normally be up-in-arms about it, but the placebo effect is often as good or better than the "medicine" in this industry. I'll accept your argument and agree that there is room for the niche market.

Do you see it as a transitionary state though? Does the investor eventually move to DIY, a couch potato strategy or an all-in-one ETF once they gain the confidence? If that's the case, it wouldn't simplify the long term strategy of robo-advisor firms.

If it's a niche and/or transitionary service rather than where everyone should be, the future for robo-advisors is probably with the large brokers rather than new firms: training wheels between full-service and discount brokerage or at least integrated with other offerings (like Quest and its Questwealth). It tells me that the long-term strategy for firms like Wealthsimple would be to create enough market disruption to be acquired (by a current investor like PWF or a new acquirer).

There is the (robotic) advice aspect based on income, tax brackets, goals, etc., but there is a lot of tax inefficiency that can be bought with not having to pay a 0.5% premium. Combine that with the fact that the majority of investors have no taxable investments (just RRSP and TFSA), and you've got less incentive. Even on here, I'm hearing that some people just go VBAL/XBAL across the board, rather than dealing with account-by-account tax efficiency ;-). If all-in-one ETFs are good enough for us, then robo-advisors have to truly be just a feel-good service for the masses.
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Re: Robo-advisors

Post by Koogie »

AltaRed wrote: 07 Nov 2019 18:24 I think it was also on G&M where I read that financial advisory "subscription services" are coming on strong. Basically fee-for-service to set up a financial plan and then a monthly retainer to be, I suppose, a lifeline for those who just don't want, or don't have the confidence, to fly completely solo. This latter thing isn't that far off some of the recommendations on this forum from time to time to get a financial plan done, and then to re-visit/re-fresh every 5 years or so.
The fee only planner that I used years ago has moved to this subscription model and I noticed last year that all the others in her referral group had done the same. The rates looked fairly reasonable to me. If I needed it I wouldn't begrudge it. "Everyone has to eat rice"
AltaRed wrote: 07 Nov 2019 18:24 Not everyone is ready to fly solo, and that is the REAL point. They are tired of high cost advisors, whether commission based, or % of AUM, and what that does to mediocre returns, but can't bring themselves to NOT want some support/assurance from another source. The thing that can be attractive about a robo-advisor is the human interface when setting up the account and picking a profile type, and then the perception someone is minding the robots, and someone can be a phone call away.
Another consideration is that your loved ones could not fly solo either. My sister had a serious health scare last year and was subsequently made redundant by one of the worlds top 10 banks. My brother in law, while quite intelligent, is also close to innumerate and would not be able to take over her portfolio and my sister, having worked at this bank and seen how the sausage is made so to speak, was not ready to leave him and my niece to the banks tender mercies. Her compromise was to set up with Wealthsimple. Over the course of several conference calls with Wealthsimple and my BIL the portfolio was simplified according to her dictates and essentially runs on auto pilot with the assistance of their algorithms. It will make life that much simpler for her family and executor should the worst happen.
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