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How Vanguard Group's robo-countering effort got to $1.3 billion of AUM so easily and why its future seems bright

Executed almost shyly, the hints-of-vanilla Malvern indexing giant is the unlikely Silicon Valley nemesis in automated services

Author Guest Columnist Michael Kitces June 26, 2014 at 3:14 AM
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Karin Risi is leading Vanguard's efforts to take on the 'robo' threat -- and the numbers are already on her side.

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Mentioned in this article:

Portfolio Management System
Top Executive: Andy Rachleff

Consulting Firm
Top Executive: Michael Kitces

Betterment, LLC
Financial Planning Software
Top Executive: Jon Stein

J. L. Livermore

J. L. Livermore

June 26, 2014 — 5:32 PM

Michael et. al.

I really like the robo advisors. While they last in their current form they will be the great educators of the masses and our market. The lesson learned for John Q. Public will be: “Wow I just lost X% of my portfolio! I have no clue what I am doing. I need to find a real advisor.” Institutional players and larger firms with robo-like capabilities and marketing will benefit and I suspect will pick up those savvy enough to figure out that managing your own money is a lot of work – a full-time job in some cases.




July 3, 2014 — 3:42 PM

I have been following this money flow from VC’s to on line services all the way back to Cha Ching? which now is Wealthfront and as I saw all these platforms switch to ETF portfolios I just kept thinking what are they doing that Vanguard couldn’t do as well and probably cheaper. Little did I know they were already in the game. Brand, reputation, low cost, huge advertising budget, no burn rate to worry about and $1.3 B in the pilot phase, let me say that again in the pilot phase. If I were a robo advisor I would be worried, very worried as there are only so many silicon valley techs to become clients. LCD

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