Show HN: Use wealthbot.io to easily setup your own portfolio management platform
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Aside from that, unless this has been vetted and audited by FINRA or a registered CRCP, the chances that any compliance officer (which every RIA is required to have), are virtually non-existent. I haven't dug into the platform to see what type of guidance you're offering/presenting, but you need to be really careful about what advice you give or state that you give. As in the US, anything even remotely related to any investment vehicle is highly regulated and providing guidance and advice without the required registrations, licenses and oversight can and will land you in very hot water, very fast.
All that said, I think with the right approach, something like this could be great for personal use as long as it integrated with multiple investment companies and could track and recommend based on all of them.
We don't offer advice, only code.
Could you point me to a few custodians or broker/dealers that provide portfolio management & rebalancing software for free? We haven't found any, but def don't have the same experience as you, so maybe we're just missing something.
You're not offering advice, but you're offering the code which generates recommendations on position allocations. Any recommendation is considered 'advice' by FINRA and has to follow strict suitability requirements. Whether or not this would require any registration, licensing, etc on your part I have no idea, but it's definitely something I'd check into just to be safe. In general as long as you're not charging in some way for said advice there's no FINRA requirements, BUT that doesn't mean there wouldn't be any liability.
Every broker/dealer has their own management software/platform for client accounts, some more comprehensive than others. Though I don't know any of them that allow use by the general public, you have be be a registered rep of their firm to use them. The reason you don't see them publicly available is because of regulatory requirements regarding suitability for recommendations. Though companies like Fidelity and Schwab have some pretty in-depth tools for account management on their sites.
I think one place we haven't been clear yet is what wealthbot.io does. He doesn't actually generate recommendations on position allocations. He is a platform for advisors to set up their own risk questionnaire and tie that risk questionnaire to a portfolio of the advisors creation.
Questionnaire shows risk rating = 20? Assign portfolio with risk rating = 20
It's up to the advisor to create a risk profile questionnaire and the portfolios.
Otherwise, I think we're on the same page. This is a tough regulatory market and there are a lot of (confusing) options out there for advisors.
at the end of the day we will generate a trade file (or signal) but that's it, it's up to RIA to ensure that final decision is correct. i would say that we encourage people to look at the rebalancer logic, adjust/modify and be aware of the flow in the system.
plus there's is a portfolio accounting system which ensures accuracy in all transactions performed by the custodian.
it's exactly the opposite of what is going on in fintech world. we offer complete transparency... and although you could think of our rebalancer as an "advice giving" tool, in reality it simply calculates and adjusts out of balance holdings. the final financial advice is on the RIA, as it is today. we simply give them tools, which they don't have today to manage their clients/portfolios free of charge (open source).
if an RIA only wants to use an on-boarding portion of the product and do their rebalancing the way they like to do it, that's completely up to the end-user.
as far as technology we do not offer any investment advice .. we offer a platform for wealth management. RIA's a primary target audience, but the core logic can be used in other implementations.
you are right that before going to production the system needs to be verified by a 3rd party in order to ensure that it measures up security-wise.. but this is no different than having a similar audit done for any ERP, (PCI compliance for ACH/ shopping carts, or any other software you can think that deals with financial data...)
First of all, Betterment and Wealthfront are good companies. If "startups" concern you, check out Schwab's robo-advisor service or, better, get a Vanguard LifeStrategy fund.
> get a Vanguard LifeStrategy fund
That being said, better to think of the risk profile questions in the demo as "dummy data". And it's pretty easy to change.
Go to Advisor -> Proposals -> Edit and update the questions. Here's a gif - http://i.imgur.com/DsZx51m.gif
What's even cooler, thought, is that this "dummy data" is loaded with fixtures. Meaning we can update it and next time you or I install wealthbot.io, no more poorly worded question! Another gif - http://i.imgur.com/1QATMeC.gif
Finally, a quick note on robo advisors. These are great services, wealthbot.io doesn't compete with them. That being said, there is no such thing as a free lunch. Be weary of Schwab's portfolio suggestions, as the CEO of Wealthfront mentions in this article - https://medium.com/@adamnash/broken-values-bottom-lines-3d55...
When coming from an RIA or other regulated entity, yes.
1. please realize that this is an open source project, so every single line of text or code can be changed to your liking. (not to mention that these are simply sample questions, and any end-user can edit them to be as complex or simple as they like). I can just as well ask your feeling about sky-diving and judge your risk tolerance based on that.
2. You have to understand the target audience. Today RIA's can pay lots of money to schwabs, fidelities, etc. Which have significant vendor lock-in and high up-front and maintenance costs, with open source RIA's have a choice they can build out a solution custom tailored to their needs using our platform. They are not locked into any specific security or cost basis. They can compete with robo-advisors without spending millions or hundreds of thousands on technology. (btw, wanna build anther robo advisor, run many firms as SaaS or build an app like Acorns? .. you can do that too).
3. Finally you can try a portfolio consisting of S&P 500 only, another Vanguard LifeStrategy only, and something more complex... just for shits and giggles see whether you can do better or not. (Wanna test a portfolio that is rebalanced vs non-rebalanced? You can do that.)
our platform is open-source alternative to costly closed-sourced solutions (this is not a new market, we are just giving users another choice)... like there are 100's of shopping carts out there, it's time for fintech to embrace some projects which cater to the masses, not only select few.
but whenever you implement any financial software, you go through the same audits. whether you paid $1M for it or got it for free.
you do realize that most banks run on open source platforms (linux). and there are countless magento installations out there? to debate whether an open source alternative is viable to a closed-sourced model we'd have to travel back 20 years, when this debate was relevant.
and bashing free stuff, is like bashing free samples at the super market... feel free to move along.
cheers.
drop us a note at hi [at] wealthbot.io
now as far as webo specifically, if the community gets behind it.. this platform can be as secure, robust and feature-full as any fintech platform out there. btw, we are already pretty sophisticated. we spent quite a bit of time building a full fledged solution that has a plethora of popular features (from tax loss harvesting, to muni substitution, to various rebalancing methods and portfolio accounting)... so a lot is done, but a lot of help is also needed from community.
(magento anyone?)
not to mention our goal is to enable not only RIA's but also developers, by allowing them to create plugins (and possibly profit form it)...(again examples are magento/wordpress)
Need a connector to your favorite custodian? there's an app for that. Need a more clever rebalancer? there's an app for that. Need a new theme or improved workflow? How bout additional ACH features?
our product is highly modularized so having developers hook into the system to expand on the core features is something that's more important to me personally than seeing if s&p 500 will outperform my personal EFT portfolio (which it hasn't ;)
On the technical side: You should really upgrade Symfony to version 2.7 (new LTS), the 2.1 you use is not supported aynmore. In the demo (production environment) you should hide the webtoolbar for security reasons.
How about screencapture gifs? Example: http://i.imgur.com/DsZx51m.gif
As far as the Symfony upgrade, great minds think alike: https://github.com/wealthbot-io/wealthbot/tree/feature/symfo...
don't think of the demo as production, it's just a test server with some dummy data, where you can play around with features of webo.
as open source projects we welcome all the help and as many pull requests as possible :)
the actual command it runs is: doctrine:fixtures:load
(which are in the Fixtures bundle).
the script which setups the demo data is located in vagrant/puphpet/files/exec-once
if you don't use vagrant you'll need to run that sort of setup manually
Here's some more info on working with Symfony's fixtures bundle - http://symfony.com/doc/current/bundles/DoctrineFixturesBundl...
However, I think the target audience is probably more likely individuals rather than financial advisors, unless you're going to be running it as a SaaS. I can't see the overlap of small advisory firms and those familiar with Vagrant.
Will give it a poke with a few hundred dollars in Vanguard ETFs.
This ends up costing the advisor hundreds of thousands of dollars every year.
Or an advisor could pay someone like (future) you, who's familiar with Vagrant and knows the wealthbot platform inside-out, to implement wealthbot.io at her firm for a 1 time fee.
Seems like an easy choice :)
note, this is a typical config file provisioned by puphpet ...
if you look closely not all of those packages are marked for installation. (install : 1/0) so we only use a faction of those listed. a basic lammp stack, i guess + some necessary php extensions.
p.s. as to why all the entries are there i guess it was easier to generate a file with everything and enable/disable various tools as needed. i.e. i decide to switch from apache to nginx change apache isntall = 0, nginx intall = 1..
Just so you know, our roadmap is public - https://trello.com/b/klhsT5Xj/wealthbot-io-roadmap-and-ideas
and you can suggest new feature ideas here - https://trello.com/b/klhsT5Xj/wealthbot-io-roadmap-and-ideas
Thanks!
you can set it up to manage your own portfolio. i.e. you can set yourself up as an RIA and a client of your own firm, the on-boarding process for both sides takes 45 min total. And if you are good enough with writing code you can script all your setup data (we have examples of that).. than setup is even faster.
Once that's done you can run the rebalancer on tolerance or quarterly (time-frame) basis to rebalance your own portfolio without any fees.
You'd only pay fees with your custodian if you decided to execute the trades proposed by the rebalancer.
"A Registered Investment Advisor is defined by The Investment Advisers Act of 1940 as a "person or firm that, for compensation, is engaged in the act of providing advice, making recommendations, issuing reports or furnishing analyses on securities, either directly or through publications." An investment advisor has a fiduciary duty to his or her clients, which means that he or she has a fundamental obligation to provide suitable investment advice and always act in the clients' best interests." [1]
[0] https://en.wikipedia.org/wiki/Registered_Investment_Advisor
https://github.com/wealthbot-io/wealthbot/blob/master/system...
Here's some background on rebalancing: http://www.bogleheads.org/wiki/Rebalancing
Btw, I highly recommend Bogleheads.com if you want to learn more about personal portfolio management.
And that's the story of how I realized my roommate had screwed me over when he convinced me to open a Roth IRA with him at Primerica with the money from my junior-year internship. >1.5% ER, 12b1 fee, front-load sales, the works.
He ended our friendship when I transferred the account to Vanguard.
I've seen some ridiculous returns on offshore funds. Have a look at some of the Southern African funds (though it does include non-SouthAfrican funds as well):
So it's the foreign-exchange rate that adds risk/volatility, I see.
for example our platform doesn't really care which security it works with whether it's a stock, and EFT or bitcoin it doesn't matter.
the problem is finding the financial custodian that will execute your trades using the said currency. we did have real interest in someone supplementing their portfolio with bitcoins... but we can't find a clearing house/custodian that would execute relevant trades for us.
if there is an international custodian that we can hook into to work with securities from other countries, it's a no brainer.
that's why open source wins. we are not restricted by any regulation or market conditions. if the technology exists and we can hook into it, it's possible.
I'll be the first to admit our documentation needs more work. If you have any questions about installation you can email me - gene [at] wealthbot.io
(as a matter of fact, that's how it would be deployed in production).
however vagrant is perfect for local, since you need mongo and mysql and various php extensions, etc. etc. all of that comes pre-packaged w/ vagrant... so if you don't feel like littering your local with a bunch of libs that you or many not use in the future, use vagrant.
up to you completely.