Dear Adam Nash: God Called…He Wants his Soap Box Back

Dear Adam Nash: God Called…He Wants his Soap Box Back

July 8, 2015 $voo
Print Friendly
(Last Updated On: July 8, 2015)

Wealthfront’s CEO recently posted a hard-hitting blast against Betterment. The core argument was against Betterment’s fees charged to small accounts ($3 / month for accounts with less than $10k and no auto-deposit turned on). If you turn on auto-deposit of $100 per  month,  the fee is 35bps.  Last time I checked, 35 bps is pretty darn cheap for customized financial advice…

A sample:

“During Betterment’s most recent fundraising, I was shocked to learn through investor due diligence that the company brags about how much of their revenue comes from this $3 fee. Almost one-third. It’s really disappointing that Betterment has decided to build their business preying on those who can least afford it…”

Much of what Adam says is super reasonable and I imagine all independent, client-friendly advisors believe in the same credo:

The world doesn’t need another Wall Street.

We believe in our clients, and we’re willing to align our future with theirs.

Vanguard took the right path.

But why the angst?

Can’t we all just get along and focus on financial advisors/brokers with serious conflicts of interests?

 


Note: This site provides no information on our value investing ETFs or our momentum investing ETFs. Please refer to this site.


Join thousands of other readers and subscribe to our blog.


Please remember that past performance is not an indicator of future results. Please read our full disclaimer. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Alpha Architect, its affiliates or its employees. This material has been provided to you solely for information and educational purposes and does not constitute an offer or solicitation of an offer or any advice or recommendation to purchase any securities or other financial instruments and may not be construed as such. The factual information set forth herein has been obtained or derived from sources believed by the author and Alpha Architect to be reliable but it is not necessarily all-inclusive and is not guaranteed as to its accuracy and is not to be regarded as a representation or warranty, express or implied, as to the information’s accuracy or completeness, nor should the attached information serve as the basis of any investment decision. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission from Alpha Architect.


Definitions of common statistics used in our analysis are available here (towards the bottom)




About the Author

Wesley R. Gray, Ph.D.

After serving as a Captain in the United States Marine Corps, Dr. Gray earned a PhD, and worked as a finance professor at Drexel University. Dr. Gray’s interest in bridging the research gap between academia and industry led him to found Alpha Architect, an asset management that delivers affordable active exposures for tax-sensitive investors. Dr. Gray has published four books and a number of academic articles. Wes is a regular contributor to multiple industry outlets, to include the following: Wall Street Journal, Forbes, ETF.com, and the CFA Institute. Dr. Gray earned an MBA and a PhD in finance from the University of Chicago and graduated magna cum laude with a BS from The Wharton School of the University of Pennsylvania.