Why Mike Sha has a 2015 goal of $1 trillion in robo-assets for SigFig and where Marissa Mayer fits in

Advice and advice products are not indistinguishable, as personalized advice is not possible in advice products yet is required for fiduciary duty. Generic algorithms solve for cost but not professional standing or the rarest commodity of all judgment. If only SigFig, Personal Capital, Betterment, et al would embrace prudent process (asset/liability study, investment policy, portfolio construction, monitoring and management) based on objective, non-negotiable fiduciary criteria of statute, case law and regulatory opinion letters which affirm technical competency, one could at the least could establish they were technically rendering advice—something no US Brokerage firm can establish.

Then it would be a question of how good the personalized advice—will the emerging outsourced CIO functions emerging for advisor use be better than Robo Advice? Certainly Robo Advice is cheaper but does the cost savings trump expert portfolio construction? There are many, including Matt Pierce, Ron Carson, Brent Boadeski, etc. who have achieved outstanding performance at very low cost. The winner is value added personalized advice, but Robo Advice will capture the mass market—the bread and butter of the retail brokerage industry which is fast being rendered irrelevant in not acknowledging or supporting advice .

SCW

Can everybody just stop with the “xxx plans to have $1 trillion on its platform by 2015?”

Forbes does it too: “Stein expects the company [Betterment] to manage over $1 billion by year-end.”

It’s misleading and specious statements like this that get RIAs in trouble with the SEC.

And don’t ask me; ask Les Abromovitz and Brian Hamburger what they think about statements like this.