Insider trading has been rife on Wall Street, academics conclude

Re:Insider trading has been rife on Wall Street, academics c... by hendzen on Sunday February 11, 2018 @10:20PM (#16356281)

Average Wealthfront account is 44k according to their form ADV, far less than the 420k threshold you gave. It seems reasonable to guess that the account sizes follow a Pareto distribution so probably more (potentially much more) than 50% of accounts are below 44k. So for the majority, (potentially the vast majority) of their customers TLH makes their service a net positive.

Of course that assumes users with small account sizes actually have enough losses to harvest, but that seems likely when there is a market downturn like last week.

[ Parent | on HN ]

Re:Insider trading has been rife on Wall Street, academics c... by loeg on Sunday February 11, 2018 @11:22PM (#16356516)

You can't state that authoritatively, as most customers will probably also be in lower tax brackets than 35%, which produced the $420,000 figure. And who knows if they are hitting $3k/year, every year.

> Of course that assumes users with small account sizes actually have enough losses to harvest, but that seems likely when there is a market downturn like last week.

Exactly -- small account sizes have fewer losses to harvest. Maybe they see a slight benefit over totally passive investment net of fees, but the magnitude will be small.

And you can easily tax loss harvest without the robo-adviser anyway.

[ Parent | on HN ]