Charles Schwab versus The Robo’s and Wealthfront…

Competition is awesome.

The keyboards are off between Schwab and Wealthfront. Wealthfront went on the attack yesterday, and Schwab has quickly responded. Values are being questioned and of course confusion over fees and coulda, shoulda, would have portfolios stretched 40 plus years into the future are the weapons of choice.

It would be a good time for me to comment since I have so much skin in the game and use both Schwab and Wealthfront.

I like Schwab for the backend. I am not too bothered by $8 trades but I still want them at zero and am now willing to move all my accounts away. The mobile app and overall day to day UI and fees are terrible in 2015. I have mentioned before on this blog that I am closing these accounts in 2015. They won’t skip a beat and I am still long the stock.

I have a couple Wealthfront Accounts for my IRA and SEP IRA. They are easy accounts to open. I have found that I feel helpless and am underperforming what I could do myself, at the risk of doing poorly on an active basis. I don’t like not having any cash, even if it is retirement. The choice of funds is still overwhelming and if I were a complete beginner it could seem worse.

Schwab is NOT going to lose this small battle in the asset gathering war. Wealthfront has $2 billion under management and so in the scheme of things, Schwab is acting extremely early which should make Wealthfront feel proud for poking. It is an overall good for investors in America.

Cullen Roche is asking today ifTax Loss harvesting is just one of those ‘too good to be true’ financial promises.

Your money is important. Find SOMEONE, not just a brand, that you can trust and can grow with. Your financial situation will change the moment you make your first investment. You can’t be placed in a financial box. It is impossible. Be honest with them about what your first monies mean to you. Find at least one financial mentor. Ask a lot of questions and than ask more questions. never stop asking questions. You can and will learn the language.

Start saving cash. If you can get comfortable investing, start investing. Dollar cost average into low cost ETF’s, most likely Vanguard and if you want to buy individual stocks you are not a bad person. As Tadas rounds up in this great post, it has never been a better time to be an individual investor. I would add that it is still a prviledge, not a right.


  1. pointsnfigures says:

    Exactly right. We are going to see some major moves in markets, and in market structure in the next three years.

  2. Gordon Bowman says:

    Definitely heating up between the two of them. I expect to see Charles Schwab get a lot more aggressive too. Just today I saw an Intelligent Portfolios billboard takeover on the Yahoo Finance homepage (and those ain’t cheap).

    Bigger picture I agree with Tadas though: it’s all to the benefit of the individual investor.

  3. hawaiianwaverider says:

    Is this to the benefit of the individual investor? As an advisor managing money through cycles back to
    ’97 (tactically), I understand my clients, their real risk tolerance and how quick and deep markets can fall.
    I propose these investors will have a rude awakening when they are expecting some “intelligent risk management” when the market turns down and they won’t get it. Wealthfront’s 128 week statistical risk modeling is comical.

    But the fees are super low. Amazing how expensive low fees can cost.

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