Dan Egan
VP of Behavioral Finance & Investing, Betterment. On 1 show, 1 appearance. The Shows tab opens the full record on each.
executivescientistfounderacademicengineer@daniel_egan ↗dpegan.com ↗
Dan Egan is the Vice President of Behavioral Finance & Investing at Betterment. He previously designed behavioral portfolio frameworks at Barclays Wealth and founded the consulting firm PreThink.
1shows
1appearances
24statements
2resolved
1supported
1contradicted
50%fully supported
Everything Dan Egan said on any show that made the record, most notable first. Each card names its show and opens the statement there.
Egan: Telling panicking investors to do nothing is the worst strategy
“So the worst thing you can ever do if somebody's freaking out to say, stop, don't do anything, sit still, et cetera. You have to take that anxiety and that energy and redirect it towards more positive things.”
Egan: Advisors cannot implement behavioral finance without controlling software interfaces
“They might want to implement some of these insights from behavioral finance, but unless you control the technology, it's very hard for you to do that.”
Egan: Searching for manager alpha is only worthwhile with millions in assets
“However many hours you spend trying to find the right manager, or trying to find the right strategy and understand what this stuff is doing, is not well spent unless you already have a very, very large asset base. I'm talking in the millions, at least.”
Egan: Saving $33 more monthly matches 1% annual manager alpha for averages
“He basically found that for that person, in order to, if that person went with finding out how to, you know, save more or invest more, rather than pick the better manager, they would need to save something like 33 more dollars per month. So, that's the trade-o…”
Egan: Betterment employs human advisors primarily to study and automate their jobs
“In the longer term, to be clear, We are going to keep automating a large part of that. So it is not simply a matter of, oh, we hit some brick wall and we had, you know, we ended up having to use advisors. Every single financial planner or licensed expert on ou…”
Egan: Many professional investors enjoy investing personal capital as entertainment
“I think that's where a lot of professional investors, they enjoy the doing more than they care about the outcome of it.”
Egan: Betterment Aims to Be First Fiduciary Advisor to IPO
“I think that's, in the long run, what we see ourselves as being, is The first company that goes public off the back of being a fiduciary advisor rather than a broker or mutual fund company.”
Egan: Behavioral Finance Knowledge Does Not Stop Irrational Decision-Making
“It doesn't stop you from having all of those issues. It doesn't stop you from making irrational decisions. It doesn't make you some sort of super rational person. It just does give you a framework of saying, okay, this is why this is happening. This is how thi…”
Egan: Betterment tax impact previews reduced trade completion rates by 70%
“And what we found was that if we showed them a positive tax number, they were about 70% less likely to go through with a transaction. If you look at transactions that would have incurred 50 dollars or more in taxes, the completion rate was somewhere around eig…”
Egan: Tax loss harvesting is most valuable during an investor's first decade
“So strictly speaking, the value of tax loss harvesting grows over time monotonically, but it is convex. So the tax loss harvesting you do the first sort of 10 years of your life will be the most valuable tax loss harvesting you ever do. It will continue to be …”
Egan: Marginal gains from over-optimizing rebalancing methodology are very low
“The marginal gains from thinking about rebalancing too much are really low. As long as you think about, like, the tax component of it, and you're not letting your asset allocation get crazy, You're fine. If it's daily, quarterly, monthly, annually, drift-based…”
Egan: Only 5% of Investors Demand Deep Technical Due Diligence
“I would say five percent of the population is going to be a sophisticated investor, and they want to know how we do it, and how we calculate the benefit, and everything that you would think is sort of good due diligence on it. The other 95% of people want to t…”
Egan: Wealth platforms must build for 5% of experts to win 95%
“The 95% of normal people, they're asking the five percent of people who they should use. So you can't simply say, oh, well, we'll just target on the 95%. You actually have to provide the transparency and knowledge for the five percent of sophisticated people t…”
Egan: Betterment hides individual security returns to enforce diversified portfolio framing
“One good example is that we don't show individual item, individual security returns. You can only ever see the returns of your diversified portfolio.”
Egan: Retirees struggle psychologically to spend down accumulated portfolios
“If you talk to financial planners, especially who work with retirees, one of the biggest problems is that they have a really hard time spending down their portfolio.”
Egan: Earmarking accounts for virtuous goals stops people from raiding them
“There's a whole line of brilliant research on goal-based investing that says, if you title this goal, Bobby's college fund, you are dramatically less likely to take money out from there and go to Vegas. If you name it in your market for a virtuous thing, that …”
Egan: In-app crisis popups reduced negative investing behaviors by 15% at Betterment
“And we found that that simple, easy thing to do, just a pop-up notification, reduced the bad behaviors by about 15% and increased deposits by about 10 or 12%.”
Egan: Betterment will not make capacity-constrained hedge funds a core offering
“I don't foresee us Making that a core part of our value prop. If only because our mission is to democratize a lot of the higher end wealth management things. And those are almost always capacity constrained or exclusivity plays, right?”
Egan: Excitement about an investment is a warning sign for investors
“If you're excited about what you're investing in, you should worry. Right? If you're kind of like, oh, I'm doing this thing, it's pretty standard, you know, like, it's not very exciting, you're gonna stick with it. You don't, you're not motivated to monitor it…”
Egan: Personal investing lacks accountability because investors cannot fire themselves
“Giving advice and being responsible for somebody else's money is different than what you do with your own. So I know people who have made bets on Bitcoin or various other things that lost tons of money, and if they were an advisor, they would be fired, but you…”
Egan: Non-Professional Investors Suffer From Poor Feedback Loops
“The vast, vast majority of investors, unless you're in a professional shop, you have a very low quality feedback loop about how well you're doing. The only people who have really high quality feedback loops are professional PNs, sometimes analysts, who get lik…”
Egan: Changing portfolio allocations trades certain tax costs for uncertain benefits
“Taxes represent a fairly certain cost. Whereas, generally when people are changing their allocation, they're looking at an uncertain future benefit. So, if I reduce my risk today, I think that at some point over the next year, markets will drop, and I will hav…”
Egan: Tax loss harvesting acts as structural arbitrage on tax rates
“So generally speaking, you are using investment losses to offset ordinary income. Ordinary income is your highest marginal tax rate. You embed a tax gain in the portfolio that you then pay off generally 20 or 30 years in the future, and that's going to be the …”
One line per show, most statements first. The link opens Dan's full record on that show: the calibration, argument clarity, speaking style and every statement made there.
| Show | Role there | Eps | Statements | Record | |
|---|---|---|---|---|---|
 CAPITAL ALLOCATORSLEDGER | VP of Behavioral Finance & Investing, Betterment | 1 | 24 | 50% 1/2 | full record on Capital Allocators → |