Brooke Southall

<p>Will Vanguard assume fiduciary responsibility for each client as an advisor as well act in a fiduciary capacity as a money manager? If so, it is an industry first. A conflict exists in Vanguard acting as an advisor and manager. Will VanGuard advisor ever fire Vanguard manager? Same for Schwab. Isn’t an objective intermediary (the advisor) required?</p>

<p>SCW </p>

Just some simple math.    $50,000 account at 0.30% is $12.50 in monthly revenue.   Twelve dollars and fifty cents.    Funny to hear Wealthfront talk about Vanguard not having to make a profit given that they still need to triple in size just to get to breakeven.      Meanwhile,  an advisor with a few connections can get perhaps 20 accounts (at much higher account size) and instantly generate an income without taking outside investment.

How exactly Vanguard Group -- with a dash of robo and lots of mojo -- went from a virtual unknown in wealth management to posing a threat to Merrill Lynch

Karin Risi: To the extent there's conflict, it's always been there.

Merrill Lynch

U.S. Trust

Wealthfront

Brouwer & Janachowski

Vanguard Group

Andy Rachleff

Steve Janachowski

Karin Risi

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 fund giant has 250 CFPs on staff for VPAS in Malvern, Charlotte and Scottsdale and virtually no minimum or maximum client size

How exactly Vanguard Group -- with a dash of robo and lots of mojo -- went from a virtual unknown in wealth management to posing a threat to Merrill Lynch

Stephen Winks

Reality_Check

Related Moves

December 31, 2020 at 4:37 AM

December 4, 2020 at 2:56 AM

January 6, 2020 at 6:32 PM

January 11, 2025 at 3:01 AM

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How exactly Vanguard Group -- with a dash of robo and lots of mojo -- went from a virtual unknown in wealth management to posing a threat to Merrill Lynch

Stephen Winks

Reality_Check

Related Moves

December 31, 2020 at 4:37 AM

December 4, 2020 at 2:56 AM

January 6, 2020 at 6:32 PM

January 11, 2025 at 3:01 AM

RIABiz Directory

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