2 replies to this topic

[Rogerdodger]

Robo-Adviser to Lend Money -- Not Just Manage...

 

 

 

What could go wrong?

 

Now the robots are coming after more than your investment adviser.

Wealthfront Inc. said in a blog post Wednesday that it will offer loans, calling the move a first among robo-advisers, which are known for wealth management using automated investing platforms. Through a partnership with RBC Capital Markets LLC, clients with at least $100,000 can take out loans of as much as 30 percent of their account value, using their portfolios as collateral.

[OEXCHAOS]

If you can't see what's coming with that, then you probably deserve what's coming...

[NAV]

2.5 trillion in passively managed funds in 2016. It must be much more by now. Robo advisors are all the rage these days. This is a bubble without any question. When the next downturn starts there will be a massive unwinding in the passively managed area. These folks will capitulate at the wrong time - without a question.

 

It's stupid. Folks are paying 1% to these robo advisors to make efficient potfolio allocation, which is all based on Markowitz modern potfolio theory. You could do this with a spreadsheet yourself and save that 1% fee. But then people in this country aren't that smart.