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Wealthfront takes on another Facebook vet -- a clue that going dark in Palo Alto doesn't mean going away

The last-standing pure B2C robo hopes to outwit, outlast, and outplay its competitors by out-hiring them

Author Kelly O'Mara December 3, 2015 at 6:15 PM
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Mike Schroepfer is the latest Facebook add to Wealthfront's squad.




Stephen Winks

Stephen Winks

December 3, 2015 — 8:01 PM

In the final analysis, the heavy brokerage overhead can not be sustained in a robo model geared to 25 bps or less. Heavy product distribution and OSJ overhead add little value in advisory services, be prepared for leaner cost structures and far more robust advisor value proposition with three times the earnings multiple of brokerage. Thus, a publically traded robo can easily eclipse the high cost, low added value conventional brokerage model. WealthFront may not be in this space but if it only understood how to scale expert advisory services (principally entailing advanced technology, prudent process and statutory documentation, all at single bps in cost), it could become profound in terms of value added, cost and professional standing. It is not that the B to C model is invalid, it is the B to B model has not yet been fully fleshed out to achieve professional standing.

Stephen Winks

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Mentioned in this article:

Portfolio Management System
Top Executive: Andy Rachleff

Betterment, LLC
Financial Planning Software
Top Executive: Jon Stein

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