Oisin Breen

Tech business practices don’t mesh with FINRA and the SEC. That can be an expensive lesson

Another stain on the house of Wealthfront, but the bigger problem is that they don't have a service that is economically viable - regardless.  Robo's spend a lot of time defending high customer acquisition costs in the name of future revenue expansion (higher share of wallet) through I guess proprietary products, high-yield money market funds, etc.

But if you turn it around, high CAC is actually telling us that the service itself isn't differentiated enough from others to by adopted at a lower cost by clients - basically poor product/market fit.

This whole industry has been thinking about the next generation personal finance service offerings in a very short-sighted way for too long and far too many $s spent.  We need to go back to first principles and rethink  what it is we're trying to provide our clients...after all, Wealthfront and Betterment investment services really are little more than "target date" funds with added complexity and an account wrapper.  Silly, really.

Wealthfront is again forced to disclose a bad mistake --testing how far the move-fast, break-things -then-apologize culture can go

Wealthfront

The Wagner Law Group

Andy Rachleff

Bill Winterberg

Bill Singer

Stripped down to its essentials, financial advice is a fairly straightforward proposition. Done well, a highly ethical individual stewards the assets and actions of an investor in a personal and professional interchange.
 
But now a vibrant new class of entrepreneurs is staking their fates and their fortunes on the premise that financial advice can be delivered in a better, cheaper, easier, more ethical, more transparent manner and, as a bonus, in a way more devoid of human annoyance on both ends of the transaction.
 
Cue the robo-advisors, arguably a callous misnomer for automated asset management. 
 
The prototypical robo-advisory entrepreneur has more brands on his or her resume than NASCAR. The bona fides of these industry upstarts often include Ivy-level colleges and MBA programs at Harvard or Stanford. They are often flush with IPO dollars realized at concerns like LinkedIn, Facebook, eBay, Amazon  and Microsoft. 
 
Robo-folk believe that technology is not an enabler of advice but rather, if engineered correctly, advice itself in digital form. 
 
And, they believe the best solutions originate in Silicon Valley or academia, not Wall Street. Robo-entrepreneurs are white-boarding the whole business model, culture and technology from scratch in the conviction that little can be learned from a legacy advice system still rooted in an investment banking culture acting under the core premise that if stockbrokers get rich some of the good effects will trickle down to clients – with the clients none the wiser. 
 
Robo-advisors are a scintillating topic for students of the advice game as they grow by hundreds of millions in assets every month, constantly evolve their business models and receive cash infusions from ever-larger swaths of venture capitals.
 
Throw in the fact that robo-advisors have yet to see a dime in profits -- and won’t in the foreseeable future -- and you have real intrigue. 
 
RIABiz has avidly covered the fast-evolving robo-advice phenomenon and will continue to do so. We present the growing body of articles here.

Robo-Advisors

The Redwood City robo issues erroneous 1099 data in 2017 that it just discovered. It happened around the time it dumped Apex.

Wealthfront is again forced to disclose a bad mistake --testing how far the move-fast, break-things -then-apologize culture can go

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