There's been a lot of talk in recent years about disrupting Wall Street and the 'old boys club' of asset management. Fintechs have sprung up like mushrooms after rain promising to level the playing field. Firms like Fundseeder, Quantopian, Quantiacs, Darwinex, Quantconnect, Huddlestock claim more or less that a good trader will get rich part timing from his home, instead of having to go to New York, London, Zurich etc and work full time for a hedge fund. How realistic is this claim? More importantly, where are the yachts of this new breed of hedgefunders?
other posters should note that the OP not only asks a question but provides additional factual information.
Sorry for late reply to this old thread. Must have missed it. I think there are a two key problems with this 'industry'. The first is that a lot of these platforms are rubbish. Just in terms of design they're missing key components or overcomplicated in others. You often have to use their platform as a trader rather than your own broker. These platforms are expensive and poor. Many of them are also pretty unethical IMHO. They have ties to brokerages which are dubious (kickbacks?). They limit the instruments you can trade. They have poor trader evaluation tools. Their model seems to end up valuing traders who take on too much risk and trade too often which means the investors or copiers will get burned, but will generate big brokerage commissions. Eithier this is incompetence, or deliberate. A lot of this seems like regulatory arbitrage; how come if I start a hedge fund I need to be regulated but not if someone starts copying my trades? Fundseeder is one honorable exception to this point, quantopian another - though they are quite different sites. This has several effects. First is that this will scare off reputable traders (I've evalulated many of these platforms and most have come up short). So most of the people on the site are cowboys. This makes the reputatoin worse. Finally it will scare off investors... which brings me to: The second point: is that the fintech is no good without a crop of investors willing to put money into these things. Sure build it and they will come, but at the moment these things are very small. The big copying sites have big numbers, but very low revenue per person copying. There is a long tail, perhaps a few people making a couple of thousand bucks a month, most nothing. The sites that operate a proper fund and investment model are hamstrung with the same regulatory issues as traditional businesses. So to get money off fundseeder you need to be regulated in the US with all that entails. On top of that they have to persuade rich people to put their money with complete unknown quantities. Eventually there might be more decent amounts of capital in these funds, but it's going to take a while for them to scale. GAT