In an open letter to Wealthfront and Betterment, Rich Hagen, CEO of TradeKing Advisors, tells the online advice platforms not to be afraid of Schwab and its new robo-advisor platform. He would know. When the company launched its online brokerage in 2005, naysayers didn’t think it could compete with the likes of Schwab. “It turned out that plenty of self-directed investors were tired of 'The Big Guys’' confusing pricing tiers and tendency to ignore customer calls unless they had a million bucks in the account,” Hagen writes. Now, TradeKing faces Schwab again with Schwab's online advice platform. Hagen says there is room for smaller players in the space. “So the bigger players will out-shout and out-spend many of us, but all that will do is attract more interest and attention to a space we all believe can help the independent investor succeed.”
The almost 20-year-old classic, The Millionaire Next Door, has sold more than three million copies since its publication in 1996, but more importantly it smashed the perception that being wealthy was only the domain of "other people." Instead the book used research to show that everyday investors have a shot at accumulating true wealth through good saving habits and a frugal lifestyles. One of its authors, Thomas J. Stanley, passed away in a car accident last week. Some have observed that Stanley passed away driving a not-particularly-frugal 2013 Corvette, but as Ron Lieber writes, “he earned that drive — and that car — by putting untold numbers of readers in a position where they’d be lucky enough to have that same choice themselves.”
A new survey of 1,261 U.S. adults found that 37 percent are actually afraid of investing in the stock market. That’s just nine percentage points less than those who reported being afraid of death. Many were still skeptical of the financial system, with 31 percent saying the stock market is rigged and another 73 percent saying it’s gambling. The good news for advisors is that despite the doubt, three-quarters still believe that investing in the stock market is a good idea, and 63 percent plan to do so in the future.
A controversial bill in North Dakota is seeking to create a $5,000 account for each newborn baby in the state, with the goal to start out all residents on an “equal footing,” says one sponsor of the legislation. According to a report from the Grand Forks Herald, the state-owned Bank of North Dakota would manage the money until the child turns 18. All unused money would go into the state’s general fund. The story goes on to outline that with an average of 10,000 North Dakota newborns each year, the bill’s estimated cost comes out to about $50 million annually.