Month: September 2019

Months After Questionable Trades Cause Tax Liability, SoFi Makes Customers Whole

Posted on September 20, 2019

SoFi, a company initially focused on consolidating student loan debt, has been aggressively expanding into other areas of financial services. Within the past two years, they launched a robo-investing platform, high-interest cash account, and a self-directed brokerage platform with commission-free trading. Most recently, they announced proprietary ETFs offering an introductory 0% expense ratio through June 2020.

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Backend Benchmarking Company Update – September 2019

Posted on September 20, 2019

I hope that this post finds you well and that you have enjoyed your summer. The last few months have been quite busy at Backend Benchmarking! Here are some highlights of our progress:

Successful Capital Raise

On June 1, we closed a fundraising round with $3.8 million in equity capital—$3.0M in Preferred Equity and $800K in SAFEs. We also secured a signed letter of intent from Peapack Gladstone Bank for an additional $1 million in debt financing. Once the debt financing is finalized, the total amount raised this year will be $4.8 million!

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Best Robo for First-Time Investors

Posted on September 13, 2019

Winner: Betterment
Runner-Up: SoFi

Betterment wins the award for Best Robo for First-Time Investors. With no investment minimum and a 0.25% annual fee, their digital-only product is a strong choice for first-time investors. Betterment’s single-goal financial planning tools make it easy for first-time investors to plan for future financial success. In addition, Betterment offers various financial planning packages that provide personal consultations with a financial planner on an as-needed basis, so users only have to pay for personalized professional help as they see fit. It is important to recognize that as a client’s assets grow, so do their financial planning and management needs. Betterment’s tiered service model is very attractive since an investor can always upgrade to the premium service levels as their needs grow, without having to change advisors. Betterment users can also open savings and checkings accounts with Betterment Everyday. Deposits in the savings account earn 2.39%  and are FDIC insured up to $1M. 

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2Q2019 Robo Report: Best Performance, Retirement Accounts

Posted on September 10, 2019

Top Performers*:

1-Year Trailing Top Performers

  • Fidelity Go IRA – 6.55%
  • TD Ameritrade IRA – 5.87%
  • WiseBanyan IRA – 5.61%

2-Year Trailing Top Performers

  • Fidelity Go IRA – 8.25%
  • WiseBanyan IRA – 8.07%
  • TD Ameritrade IRA – 7.45%

*Based on Total Portfolio Return above/below Normalized Benchmark

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2019 – Active Accounts Commentary

Posted on September 8, 2019

As existing firms have grown and new players have entered an increasingly crowded field, companies have looked for new ways to differentiate themselves. For some companies that means offering “active” portfolios. Although Backend Benchmarking has only had our active accounts opened for a short time, active portfolios have showed some early signs of outperformance.  Active portfolios outperformed their passive counterparts in the first six months of 2019 by 1.17% on average. One significant factor that may be driving this short period of outperformance is many of our active portfolios have a tilt towards growth which has outperformed in the first 6 months of 2019.

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SRI Portfolio Perform Well Despite Higher Fees

Posted on September 6, 2019

In recent years, socially responsible investing (SRI) – also commonly categorized as environmental, social, and governance investing (ESG) – has gained popularity with retail investors and investment managers alike.  Between 2016 and 2018, assets invested in ESG-themed mutual funds grew 34%, while assets in ESG-themed ETF funds more than doubled. Driven by consumer demand, a natural expansion has been undertaken by digital advisors to offer separate SRI portfolio options.  Within the past few years we have opened and funded SRI accounts at each of the providers that offer sustainable investing options. With a year of performance to review, we have assessed the risk and return statistics of SRI portfolios offered compared to their standard offerings.  While today’s focus is on performance, we will publish a full report on the composition of SRI portfolios, including costs and sustainability scores, later this month.

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