What, you mean your mom or dad didn’t tell you the story?
Well….Once upon a time there were 37 different banks, and then they gobbled up each other until they grew into a huge four-headed monster. The end. Okay? Well, sweet dreams…
(be careful clicking, it only gets bigger)
They say art is in the eye of the beholder so I want to get your take on something I painted in my studio today. I think it’s pretty good, way better than the macaroni art I made last week.
The subjects of this picture are three firms using algorithms to manage your portfolio auto-magically, also generally known as RoboAdvisors: Betterment, Wealthfront, and FutureAdvisor.
I’ve got a working title…”The Robots Are Coming To Eat Your Face Off, And Kill You, Or Maybe Probably Not.” This is my second series about RoboAdvisors. Series one was here, in case you missed it. So, let your eyes behold…
What’s it like to be really rich? Henry James’, Wings of the Dove…
Milly, the last heiress of all ages, is a girl free from all earthly ties, and as pure as Alpine air. She has never thought about the cruelty or sordidness to which money or the absence of money reduces people. On the contrary, her fabulous money seems to purify and mystify her, as if she were a princess into whose court life nothing disagreeable penetrates. But in reality, the girl couldn’t get away from her wealth…She couldn’t dress it away, nor walk it away, nor read it away, nor think it away;…She couldn’t have lost it if she had tried — that was what it was to be really rich. It had to be the thing you were…”
I write this as a warning. If you are an advisor or a client. Do. Not. Be. This. Guy.
Part of the wave of revolution happening in the financial services right now is the movement from Mutual Funds to Index Funds, like ETFs. For years, I was a pariah in my old firm for advocating such indexing efforts. Recently Bob Seawright did a fantastic job answering, Why do clients need an Adviser if they index?
And now Morningstar is out with its latest edition of MorningstarAdvisor on the Urban Myths of Mutual Funds. Although it’s not quite the back-slap you’d expect from the leading Mutual Fund ratings company…
One urban myth circulating among investors is that mutual funds have hidden fees of 140 to 200 basis points that are omitted from expense ratios. When these hidden fees are added to a fund’s stated expense ratio, they presumably bring overall annual fund expenses to something in the 2.5% to 3% range. When the additional toll of taxation is taken into account, the total cost of fund ownership is supposedly close to 5% for some funds. It’s enough to send shivers down your spine.
While the terror of taxation on fund shares one continues to hold is real, the 140 to 200 basis points in hidden costs are largely fiction. The idea does have a basis in reality, however. Mutual funds do omit the cost of trading securities from their expense ratios…
The article is chock full of Chupacabra-busting…
When I first shared the news with Josh Brown about BloombergBlack (behind the scenes) it created a much bigger stir than I ever anticipated, especially inside of the wealth management industry. Josh aptly dubbed Bloomberg’s movement into the online advice space, as Coming to Disrupt the Financial Disruptors.
I don’t know how it is in your house, but around mine — the kitchen is the heart of our home. And that 10-year-old faded & nicked Ikea black Bjursta kitchen table is sort of the aorta; endlessly beating through… Art projects and gift wrapping. Laughter and tears. Fart jokes and spilled milk.