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Originally Posted by Slava
Well I am an advisor and use those same companies to build portfolios so I know, when you just look at that you would think that someone could build something and it would be super cheap. And you can...just with no service. That is what the robo-advisors are doing. But as soon as you add customizing and tailoring to the mix then things add up.
I do run things cheaply and I fully disclose all the fees, but the truth is that you can't work for free and no one is going to. So the idea of paying only for the investment and super small amounts over is difficult because someone has to pay the regulators, compliance has costs and of course just running this platform costs money.
And as far as the passive, that's great. I do that for people. But it's not purely set it and forget it. You have to be monitoring and rebalancing and there are other considerations, methods to the rebalancing and plenty of work involved. I think that the idea of "I will just buy the S&P 500" sounds great, but even when you mix-in 2-3 indexes you start making decisions and have tax ramifications, currencies and risk that should all be factored in.
tl;dr: I would be more than happy to work on something like this, but people would need to go in with their eyes wide open.
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Fair response. Disclosure on my side is I work for a bank down here in Australia and all the middlemen are under fire. We're funding fintechs with platforms that replace every brokering channel. Now. Today.
Everything you detailed above is better done by an algorithm. It's all just a set of rules connected to a database. It offers the consumer a better experience and it can scale.
Looked at our lending stats and the matrix lending we do outperforms the humans by 5x. Plus the computer doesn't sell you income insurance because they get a trailer.