How do you track the financial stability of a privately held company?

Specifically Wisebanyan which is a roboadvisor that does basic management for free where most places charge .25%-1% as a management fee. Wisebanyan makes their money via additional features which can be enabled for x dollars a month. For example tax loss harvesting is .25% up to a max of $20 a month. The actual securities are held by apex clearing for Wisebanyan.

They received 6 million in funding last year. How can we find out how stable they are?

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Looks like they’re being bought out shortly by Axos Bank (AX), the old Bank of the Internet.

In the meanwhile, you can see their brokerage sub’s unenlightening financial report for 2017, and should have the 2018 one later this week filed with the SEC.

It is 0.02%/mo or ~0.24%/yr, up to $20/mo (link… side note: why would anyone use this “Tax Protection” in IRA accounts?).

IMO tax loss harvesting is the only reason to use a roboadvisor and I don’t think I’d ever use one without this feature. I didn’t realize there was a maximum for this fee, so thanks for pointing it out. That means they would be cheaper than wealthfront for any balance (by 0.01%/yr :slight_smile: ), much cheaper for balances > $96K. Assuming their tax loss harvesting algorithms are comparable…

Hopefully this fee doesn’t change if/when they’re acquired.

Why? Are you going to exceed the SIPC limit ($250K for cash, $500K for cash + securities)?

Lets hypothetically say yes. Tax loss harvesting does not occur for IRA’s. IRA’s however do require the IRAAutomation feature which is listed UNDER the same feature that has tax loss harvesting. They had to have some fee’s for IRA’s to cover the fee’s they were charged by apex and that’s how they did it. Tax loss harvesting only DEFERS your paying of the taxes…it doesn’t eliminate them and it assumes you will have a lower tax bracket later than you do now. It’s useful but it’s not the “end all be all”. It also ends up buying into ETF’s with higher fee’s to provide competition in some cases…one of the competitors to VTI they use for tax loss harvesting had a 0.69% fee for the fund. The majority are much cheaper:

The cap of $20 was one of the reasons I went with Wisebanyan…if you have the sipc amount of $500,000 you still pay an annual fee to wisebanyan of $240 annually(for the optional tax loss harvesting feature) where it would be $1,250 annually at betterment and the rest when assessing 0.25% to the entire balance.

I would not have my IRA with them except for the fact I’m already paying for the feature to get tax loss harvesting so my ira fee’s become close to zero. The same feature also gets you easy IRA rollovers so you can move funds from a regular IRA to a roth IRA. I can no longer contribute to an IRA as I don’t get what the IRS considers INCOME (and yet they tax it as income) so the only way I can get funds into my Roth IRA that can grow totally tax free as opposed to tax deferred in the regular IRA is to move them from my IRA and be taxed on them in the year I do so. I don’t pay any penalties since I’m qualified to withdraw but I have to match the rollovers to capital gain losses which makes the tax loss harvesting even more important unless you want to risk being bumped up a tax bracket.

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This all sounds like good news…Axos is a publically traded company and will be easier to see how they are doing. How did you find that? I did google’s for “wisebanyan news” and came up with nada.

Appreciate this!

To keep things simple and to keep your CG minimal and not risk having excess loss, tax loss harvesting can be beneficial. However, from a tax planning standpoint, it is actually a lot more beneficial to have many holdings with built-in gain and built-in loss so you can choose when to recognize them. However, this only really matters if you’re going to actively engage in making those trades.

Not to be morbid, but if you’re going to die soon, you don’t want some robot making trades to recognize gains.