[mushufasa]

Many people who start off with Robos like Wealthfront actually leave once their net worth rises and pay more for human advisors.

If you need to invest a small/decent amount of money into stocks, Robos work wonderfully. It's a mass production angle -- good quality service at lower cost to many people; the Ford Model T of investing. Early robot just had a couple of investment options, and now there are more options but the same concept of limited choice at scale (Mustangs, Minvans, Trucks in my example)

Once you have estate planning and complicated tax issues, human advisors provide a lot of guidance to people that is hyper specific to you and your location / niche, which Robos just don't cover. Wealthfront, for example, won't arbitrate a dispute between beneficiaries of a family trust.

I think lawyers are a good comparison here. If you need some standard cookie-cutter incorporation docs, there's a bunch of websites where you can get some core documents for free or a few hundred dollars. But if you're afraid of making the wrong choice, or if you're in a situation that goes beyond the common scenarios (like M&A), then you hire a lawyer to provide you personalized advice.

[lzrs]

Yes, completely agree. That happens when all of the other estate planning costs begin to vastly outweigh the cost of investment advising. I'm no expert, but I am under the impression that although these automated strategies are a smaller part of the whole picture for high net-worth individuals, the strategies are still the same.

I'm interested to see if UBS can add value in those ways you mentioned, while still using sophisticated automated strategies for cost savings purposes.

Also note that Vanguard, JPM, Schwab, Fidelity etc. are getting in the robo-advising/direct indexing game.

[jcfrei]

I doubt they'll add much value - they don't want to cannibalize their core business even more. They'll probably just add a button that says "talk to a UBS wealth manager" when your portfolio value crosses a certain threshold.

[borski]

The one exception is alternative investments like real estate and private equity. Once you are HNW or at least high enough to have enough investable assets that you qualify, PE can be an attractive investment class that Wealthfront won’t touch.

Also, human advisors can manage, or at least access, investments across brokerages; that is, you don’t have to worry as much about wash sale rules and can do tax loss harvesting because they can see your sales elsewhere. I have to have TLH turned off on Wealthfront because it has no way of knowing about what things I’ve sold elsewhere.

Not financial advice, YMMV, etc.

[ppg677]

I left Wealthfront and now have about $6M in assets. I'm self-managing with mostly Vanguard funds. My experience with financial advisors has not been great.

[ivalm]

> Once you have estate planning and complicated tax issues, human advisors provide a lot of guidance to people that is hyper specific to you and your location / niche, which Robos just don't cover. Wealthfront, for example, won't arbitrate a dispute between beneficiaries of a family trust.

I agree fully that estate planning/making a trust is something most people would benefit from a human advisor, but this is something you can target with an estate lawyer. I don't think this is something you would need advice on regular basis.

For taxes, I am guessing vast majority of people, even wealthy people, never need human advice nowadays. Anything that is just combination of W2+1099DIV+1099B+1099INT+1099NEC is handled well with robo tools. Tax loss harvesting is pretty simple (even without robo advising!) as long as you know wash sale rules and distinction between long/short term capital gains.

[sgustard]

You can pay for both human advisors and robo-investing. A human advisor will charge 1% of assets to manage your money for you, and the results may not differ much from what the robot picks at much lower cost. I'm happy with the robot's asset allocation and I pay an expert for taxes, trusts, and so on.