Why Charles Schwab Is Ending the Robo Advisor
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Another one bites dust. Yeah. Another robo advisor bites dust. Charles Schwab announced it will no longer allow to onboard clients to its white label, air quotes, white label robo advisor, institutional intelligent portfolios. yeah, it’s going to be shutting down the platform. Okay.
Let’s tell you what happened when this whole thing started up. I, geez, I’m trying to go back maybe about 10, 12 years ago, we’re approached at Markowski Investments with this wonderful idea that we should start our own robo advisor. Yes, our own robo advisor. We could have people from all over the country.
On board this it would be great for us because we have a radio show and we’re a national Registered investment advisor we got a name and we could tailor this and we wouldn’t have to wouldn’t have to deal With the smaller clients and people would just sign up and we can allow them to trade and do willy-nilly as they want Would it have been very very profitable for Markowski investments yipper? Without a doubt
Without a doubt, would have done very, very well for the bottom line. However, again, I’m a fiduciary. I put my client’s interests, my job, my duty is to put my client’s interest above my own. But wait, Mr. Markowski, we’ll have a separate company for this, where you’re not managing.
the assets, you don’t have to have that fiduciary responsibility. Yeah, and I instantly think of Martin Sheen and Wall Street. I don’t go to bed with no horror, I don’t wake up with no horror. Buddy, that’s how I live it myself. I don’t know how you do it. There’s more to it than that. I’ve been watching this take place for a while. Take you back to the 1990s.
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Take you back to 1990s. I’m doing an interview, doing an interview and being asked about the demise of, that time it wasn’t really a lot of registered investment advisors, mostly brokerage firms out there. Was this gonna be the end of brokerage firms because of E-Trade, Ameritrade, DLJ, direct? There was just a myriad of them that were out there at that point in time. And I laughed. I laughed. said, you kidding? You kidding? Why would,
Why would all of these big banks and brokerage firms, why would they finance these companies if it was going to lead to their own demise? They wouldn’t do it. Basically what these online outfits, the discount houses at the time, what it allowed the Wall Street firms to do is to bring in a lot of greater fools and naive suckers.
that they could make money off of because they’re going to trade a hell of a lot better than you are.
Again, what happened? What happened to all of those GameStop investors? they made a movie about that, right? Yeah, 99.9 % of them lost their shirt when it came to all that. This is the same thing held true back in the 1990s. Again, I told the story. There was an actual E-Trade Center, an E-Trade Center in Midtown Manhattan.
and people would go there and trade at their lunch hour. Yeah, it was basically a casino in Midtown Manhattan. And inevitably when push comes to shove, people will lose just like they do at the casino and the big firms know this. RoboAdvice, same thing. Same thing. Robinhood, they keep offering more and more things out there and more and more ways to trade. Listen, I’m a libertarian.
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At heart I am I You know, believe people should be allowed to do whatever they they want to do as long as they’re not really bothering anybody else however, I am NOT going to I’m gonna not I’m gonna choose not to make money on the Misfortune of others other people like I said have had in my opinion ethical bypass at birth and they’re willing to do that We’re not
There’s a right way of doing things and a wrong way of doing things. Sure, sure. Can some people utilize these platforms and do things the right way? They can. They can. But most don’t. Can some people go to a casino and stay within their limits and not get overboard? Yeah, some can. Actually, I would think that
casinos have got a better outcome as far as people not crushing themselves as much as these do. You look at every single study that’s been done. We’ve talked about Terrence O’Dean has studied, went back in 1990 studying the discount houses at that point in time, studying the robo advisors now. People do really, really dumb things with their money. And again, you know, they watch. Turn on the business networks.
Get you to move, groove, do this, do that, listen to this Wizard of Smart here and that Wizard of Smart there. I actually surprised somebody the other day. People, I was asking me about my portfolio. Let me ask, I haven’t looked at my portfolio. I haven’t looked at it in over a year. I know what’s in there.
And again, you know, we made some trades on myself personally, my brother handles my portfolio. Again, I don’t need to look at it. I know what he knows what needs to move again. Position becomes oversight, take some profits in Nvidia, whatever it may be, and rotate those assets. But do you think that I’m looking at my position and the valuation of my portfolio every single year? No, let me tell you what I am doing is a maxing out.
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as much as I could put into my qualified accounts owning high quality companies and continuing to build ownership and great companies over time. You you’re getting little beeps on your phone, beep, beep, beep, trade volumes up, do this, do that. Let me tell you something, you are going to lose and we don’t do that here nor will we ever. So again, yeah, more of them will shut down, but they’ll still be out there. Again, get rich quick con artists the world’s second oldest profession. Watchdog on wallstreet.com.
