Re:SEC Charges Two Robo-Advisers with False Disclosures (2018)
by dangero on Sunday April 14, 2019 @11:41PM
(#19663001)
https://www.bloomberg.com/news/articles/2018-03-23/wealthfro...
This article says 500 Million valuation last year, so halfway to a unicorn.
Re:SEC Charges Two Robo-Advisers with False Disclosures (2018)
by randomacct3847 on Sunday April 14, 2019 @11:54PM
(#19663031)
I’m saying I don’t believe whatever private valuation they have. Wealth management is a lifestyle biz at best unless you get to Blackrock scale. I believe that is what they are pitching investors to get whatever valuation they have now but I am extremely bearish on these companies. Robo investing has been largely commoditized and AUM will inevitably tank with the next recession.
Re:SEC Charges Two Robo-Advisers with False Disclosures (2018)
by danielecook on Monday April 15, 2019 @04:16AM
(#19663896)
What is a lifestyle business?
Re:SEC Charges Two Robo-Advisers with False Disclosures (2018)
by derp_dee_derp on Monday April 15, 2019 @04:29AM
(#19663940)
"lifestyle business" is a phrase made up by silicon valley wannabes to describe businesses that "only" generate a large enough profit for the owners to be millionaires instead of billionaires.
They aren’t a hedge fund (no profit sharing) and take .25% in fees a year. $11b *.25% is only $27.5m. Hardly a unicorn scale business IMO unless they are pitching investors they’ll get to Blackrock scale (trillion in AUM). Personally I don’t see it. Switching cost is big for existing clients but new clients have a bunch of Robo options now including free ones offered by Schwab, big banks, etc.
For some perspective, after college I worked for an investment fund with around $3b AUM with around 7-8 full time staff with a similar fee structure...it was basically a nice lifestyle company for the two founders.