Some thoughts on UBS acquiring Wealthfront

Congrats to the shareholders of Wealthfront as UBS acquires Wealthfront for $1.4B. Wealthfront has been one of the two industry-defining robo-advisors (the other one was Betterment). I can say that WealthFront built the best robo-advice product in the world.

The industry-leading, consumer-facing, web-based product that Wealthfront built is ideal for a massive segment of customers who opted for digital investment management. Even though the direction of its product development meandered for the last two years, its robo-advice tech is still the best-in-class.

I believe the $1.4B that UBS is paying for is primarily for the tech product, much more than for the $27B book of tech-savvy early-adopters. There was no way the UBS tech team would've built such an investment management product on their own even after five years of slogging it out!

Any acquisitions of other robo advisors in the US in the near term might not fetch the same acquisition pricing because other robo advisors do not have a similar "product premium" that Wealthfront enjoyed. Well done, Andy Rachleff and team.

That said, the original mission of Wealthfront (before it tried to integrate banking services to its product, thus losing focus) remains semi-complete. I think Wealthfront under its new UBS owners (and under new management in the coming years) will fail to do justice to the mission.

This acquisition creates room for the emergence of a new firm sometime in future to take up from where Wealthfront has traversed so far. I hope QuietGrowth is that firm!

UBS continues its efforts in digital wealth management -- It invested in SigFig in 2016. It closed its own robo advisor SmartWealth in 2018. It is running Sigfig-powered UBS Advice Advantage. Now the acquisition of Wealthfront.

With so many acquisitions of leading VC-backed robo advisors by big banks and financial institutions taking place in the US and UK, the terms "independent robo advisor" or "standalone robo adviser" might be used increasingly to differentiate!

Sad news that the number of districts are increased from 13 to 26 in Andhra Pradesh

It is a sad development that Andhra Pradesh Government has decided to increase the number of districts from the existing 13 to a massive 26. This results in a much bloated government, increased government spending, more number of government employees without any conclusive benefits to the society.

A new district requires a completely new set of administrative infrastructure in many government departments. For example, a new District Collector, a new district Police Headquarters, etc. Such an additional set-up results in massive increase in government expenditure. Not the best use of the tax payer's money.

The improvement in technology has resulted in easier administration of massive organisations. Huge global organisations with operations globally are being administered effectively with the use of technology. In this modern age, it is stupid to create new districts.

Small government is the best. Not a bloated government.

Increase in the retirement age for Andhra Pradesh State Government employees from 60 to 62 years

Increase in the retirement age for Andhra Pradesh State Government employees from 60 years to 62 years is a welcome move.

It helps the government in utilising the skills of the experienced employees for two additional years while reducing the burden on the Pension outgo. This decision is fiscally responsible.

This decision also goes inline with the increasing life expectancy of the employees.

Per capital income of Andhra Pradesh residents

The net per capita income of Telangana residents is Rs 2,32,632 while it is only Rs 1,70,215 in Andhra Pradesh residents.

The #1 priority of Andhra Pradesh government should be to increase the per-capita income of AP people so that it becomes equal to that in Telangana.

Note: Welfare schemes are not the answer for increasing the per capita income.