News From the Control Tower - 4/26/2023
News from the Control Tower: Our weekly curated list of news stories affecting you and your finances.
Everyone wants a piece of the pie. –Amanda Vaught
If you’ve been watching the new season of Succession, the power games that the characters play can make you dizzy. So can some of the numbers they throw out. The Financial Times this week breaks down some of the economics behind the story.
I love a good story about the perils of using a robo-advisor. (Unfortunately there are way too many of them.) In this one, clients lost money because of material misstatements made by Betterment. The SEC settled for $9 Million, but what did the clients get, other than bad advice? Where is the accountability? We advocate hiring a fiduciary for a reason, if for nothing else than you can hold them personally accountable if they mess something up.
Meanwhile, First Republic was undone by kowtowing to wealthy clients, and car dealers wanted to get in on the inflation action by marking up cars even more. Finally, homebuilders are cutting so many corners that no one wants to buy a house built post-2010.
Greed drives so much behavior that it can really make your head spin.
1. Everything you don’t actually need to know about the economics of Succession
Who owns Waystar? What are the Roys worth? WTF is going on? And other pointless questions, answered
2. Betterment Agrees To Pay $9M To Settle SEC Charges
It caused clients to lose millions by making material misstatements and omissions to clients concerning its automated tax-loss harvesting service.
3. First Republic Worked Hard to Woo Rich Clients. It Was the Bank’s Undoing
The bank attracted wealthy clients with loans that have become a costly hurdle to finding a rescuer.
4. Car Dealer Markups Helped Drive Inflation, Study Finds
The money dealers charged over makers’ suggested prices factored into a nearly 16% rise in the consumer-price index in recent years