Wealthfront is attempting to replicate hedge fund Bridgewater's risk parity strategy using the robo advisor’s software-based approach. The new offering, Risk Parity, has been added to its PassivePlus suite of investment features, which include tax loss harvesting, direct indexing and advanced indexing. The robo’s engineers and PhDs hope to mimic the strategy used in Bridgewater founder Ray Dalio’s famed All Weather Fund, which allocates money to assets based on percentages of risk as opposed to percentages of value, and comes with an account minimum of $100 million. Wealthfront hopes to bring the strategy to the masses. “Most academics appreciate the benefits that broad diversification can bring, yet time and time again most investors fail to take advantage of the full benefit,” said Dr. Burton Malkiel, economist and Wealthfront’s chief investment officer. “The addition of Risk Parity takes diversification to the next level with a cost-effective, rules-based strategy. It aims to offer our clients more consistent returns during uncertain economic times.”
The majority of millennials (80 percent) agree the more educated they are about investing, the better they will manage their money, according to a recent survey by TD Ameritrade. Participants also said they believe if personal finance were taught in school, more Americans would be better about saving and investing. But despite the sentiments, the survey found it wasn’t a priority. Only 36 percent of all adult participants spent time learning about investing. Meanwhile, 48 percent use their spare time to learn about cooking and 44 percent to learn about travel.
Lori Hardwick, the co-founder and president of Advisor Innovation Labs and former COO of Pershing and group president at Envestnet, has been appointed to serve on the board of directors at Riskalyze. Hardwick is Riskalyze’s sixth board member, joining CEO Aaron Klein, Co-Founder and Chief Investment Officer Mike McDaniel, Board Chairman Andy Swan, and Board Directors Ryan Shanks and Brad Bernstein. Hardwick was one of Envestnet’s founding partners, helping build the firm from the ground up and serving in senior leadership as the company went public in 2010 and grew to more than 4,000 employees. “We are thrilled to have an executive of Lori’s caliber join us for the next phase of our journey as a company,” Klein said in a statement. “Lori’s extensive relationships with industry leaders, and her deep grasp of the issues facing our institutional customers, will be invaluable on the board. As Riskalyze continues to grow at a rapid pace, we look forward to seeing the benefits of Lori’s counsel.”