Author Topic: Anyone have experience or advice regarding SoFi Wealth?  (Read 9806 times)

Dr. Peppers

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Anyone have experience or advice regarding SoFi Wealth?
« on: April 27, 2016, 03:28:32 PM »
Hi all!
I'm a long-time MMM blog reader and brand new the forum. My husband and I are trying to learn more about investing with index funds.

SoFi is offering an investment management service for investing in a mix of low-cost funds. The management fee for any amount is waived for SoFi borrowers (which we are), and advisors are available any day by phone. Apparently it's relatively new service.

Here is the link: https://www.sofi.com/wealth-management/

Does anyone know anything about this? Any advice is appreciated!
Thank you!

Vagabond76

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Re: Anyone have experience or advice regarding SoFi Wealth?
« Reply #1 on: April 27, 2016, 10:09:38 PM »
People would be better off learning how to invest on their own.

ShoulderThingThatGoesUp

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Re: Anyone have experience or advice regarding SoFi Wealth?
« Reply #2 on: April 28, 2016, 06:36:41 AM »
0.005% is obviously not a lot, but it is in addition to the index fund ERs - and they aren't publishing what those are. I don't see how you're better off doing that rather than just using Vanguard's or Schwab's very-low-ER funds and whatever allocation works for you.

Also:
Quote
While we believe in low fees, we are not a non-profit. Many advisors would charge you over 1% of your assets each year for services like SoFi Wealth. Two things enable SoFi to deliver wealth management at a lower cost. First, we use technology to deliver our products and services at lower cost, without the overhead of a bank. Second, SoFi gets revenue from lending your securities to hedge funds who sell securities they do not own in the hope that they will go down in value and can be bought back cheaper. These hedge funds still need to deliver securities to the buyer, so they need to borrow them. They pay SoFi for borrowing these securities.

This loan is secured by an amount well in excess of the value of the securities borrowed. This security deposit is adjusted daily based on the changing value of the securities. If the securities go up in value and the short seller does not add more money, they are bought back with the deposit and replaced in the lenders account. You grant us permission to lend your securities in the Master Securities Lending Agreement, which is one of the documents you agree to when you sign up.

There must be some risk here to the investor, right? Somebody who knows more about stock-shorting will hopefully chime in.
« Last Edit: April 28, 2016, 06:39:39 AM by ShoulderThingThatGoesUp »

Vagabond76

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Re: Anyone have experience or advice regarding SoFi Wealth?
« Reply #3 on: April 28, 2016, 11:39:58 AM »
It just amazes me that a broker can lend shares that I own to someone else. That person (or entity, more likely) sells my shares to someone else. That other person's broker then loans my shares to yet another person to sell short.

My 1 share became 2, and then 3, and so on.

Dr. Peppers

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Re: Anyone have experience or advice regarding SoFi Wealth?
« Reply #4 on: May 02, 2016, 08:21:09 AM »
Thank you all - I appreciate the replies!

JZinCO

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Re: Anyone have experience or advice regarding SoFi Wealth?
« Reply #5 on: May 02, 2016, 09:25:35 AM »
0.005% is obviously not a lot, but it is in addition to the index fund ERs - and they aren't publishing what those are. I don't see how you're better off doing that rather than just using Vanguard's or Schwab's very-low-ER funds and whatever allocation works for you.

It's $5 per month. The fee ranges from sixty basis points (at $10,001 balance) to six (at $100,000 balance).

Improver

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Re: Anyone have experience or advice regarding SoFi Wealth?
« Reply #6 on: November 18, 2016, 06:51:08 PM »
I work for SoFi Wealth and want to clarify how stock lending works. When an investor sells short, they must deliver shares to the buyer. These shares are borrowed from people who own them. If you withdraw funds from SoFi Wealth, we sell shares to cover the withdrawal. If the shares have been loaned, the borrower simply gives them back. All this is handled by our clearing firm. You donít have to do anything.   

The short seller pays for borrowing the shares. The amount is determined by the scarcity of the shares being loaned. This revenue reduces amount we charge for management. If you have a SoFi loan, we charge no management fee. We invest in large, liquid ETFs that have very low management fees. Each fund is different, but the fees are disclosed on our site. Just click the ticker symbol. Call us at 855-525-7634 if you have questions.