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Titan Case Study

NPS Feature 👍 | ETF Tax Loss Harvesting on Autopilot

tl;dr

I’m proposing launching Automated Tax Loss Harvesting for stock ETFs. This feature will minimize the net impact of investment losses and improve overall investment returns for customers investing in the ‘Titan Auto-Stocks’ fund.

The Pitch

Customer Problem

Virtually all index fund investors will experience investment losses. Unlike hedge funds or wealthy people with professional money managers, most retail investors are not aware or equipped to handle the complexities of harvesting their investment losses to attain the associated tax deductions.

Tax harvesting is challenging for the average retail investor as it requires:

An understanding of the tax implications of investment losses, including awareness of various limits and restrictions imposed by tax laws

The ability to execute trades that are timely and align with both tax planning strategies and the broader portfolio’s goals and risk tolerance

Target Audience

The primary target audience for this feature is existing Titan mobile and web app users that currently invest in ETFs through the ‘Titan Auto-Stocks’ strategy.

Feature Overview & Customer Benefits

Automated Tax Loss Harvesting (TLH) aims to improve users’ after-tax returns by automating trades that turn investment losses into potential tax deductions.

Example: If you invested $10,000 in a stock index fund and its value decreased to $9,000, the Automated Tax Loss Harvesting algorithm would sell the fund to realize a $1,000 loss. The $9,000 would be immediately be reinvested in a similar fund to maintain your market exposure and comply with the ‘

wash sale rule⁠

’.

This $1000 loss can then be used to offset taxes associated with future capital gains or other income.

Customer benefits that will drive NPS:

(A)Tax efficiency that drives better returns: Enables customers to use losses to offset future capital gains and up to $3,000 of ordinary income annually, accelerating wealth accumulation.

(B) Accessibility through automation: Automated tax loss harvesting makes it easy to implement this complex strategy.

Success Metrics

The primary success metric for this Tax Loss Harvesting feature is an increase in Net Promoter Score (NPS). Our hypothesis is that NPS will increase by a relative 10% for our

target audience⁠

I’d also monitor the following secondary metrics

% of eligible customers who enable tax loss harvesting

avg. dollars saved from harvested tax losses per customer

customer retention

average assets under management (AUM)

customer support outreach for the Tax Loss Harvesting feature (guardrail metric)

Execution Plan

How it Works

Titan’s Tax Loss Harvesting trading strategy needs to be built alongside the trading/data science team, but this diagram outlines a conceptual model of how it could work:

⁠

High Level Scope and User Stories

MVP: Launch core functionality on mobile and web app

[P0] As a user, I want to see an explanation of what tax loss harvesting is and how it works before I enable the feature

[P0] As a user, I want to easily toggle tax loss harvesting ON and OFF from my ‘Titan Auto-Stocks’ fund dashboard

[P0] As a user, I want to see details about the automated trades made by the the tax loss harvesting algorithm in my ‘Titan Auto-Stocks’ trading history

[P0] As a user, I want to view the total dollar amount of losses harvested by Titan on my behalf by calendar year

[P0] As a user, I want my investment strategy and asset allocation to remain consistent even while losses are harvested to ensure my long-term financial goals are not affected

[P0] As a PM, I want to ensure the tax loss harvesting feature’s meaningful FE and BE events on the mobile and web app and correctly instrumented so I can track the success of this feature

V2+: Extend the core functionality and refine based on data and customer feedback

[P1] As a user I want to receive clear, detailed reports of my harvested losses for the year to aid in accurate and straightforward tax filing.

[P2] As a user, I want access to educational resources on tax loss harvesting to better understand if and how it benefits my financial situation.

Launch Plan

Launch Plan

⁠

Risks & Considerations

Consider running an extended beta release to iron out any kinks in the trading algorithm and ensure the trades are not resulting in increased losses

Risk of impact on NPS being small if the number of users who currently use ‘Titan Auto-Stocks’ fund is small

⁠

Growth Feature 📈 | Titan Trade: Zero Commission Stock and ETF Trading

tl;dr

Zero commission stock and ETF trading will allow both new and existing users to trade with as little as $1. I expect zero commission stock trading to be an excellent driver of new user growth for the business as it will lower the barrier to entry for new users—similar to the Titan Smart Cash product.

The Pitch

Customer Problem

Switching wealth management products is daunting as customers feel they need to move their thousands of invested dollars shortly after signing up for an account.

This problem is exacerbated for Titan as it’s positioned primarily as a way to invest in actively managed hedge funds and other alternative investment products. These products are particularly complex and can be difficult to grok even for savvy investors, further increasing the barrier to entry for new users.

Target Audience

The primary audience for this feature is non-Titan customers that fit the target persona.

The assumed target persona is a young professional aged 25-35 who is familiar with technology, has moderate financial literacy, and is looking to actively participate in making investment decisions.

Feature Overview & Benefits

Zero commission stock trading will enable customers to buy and sell individual stocks and shares in ETFs without paying a brokerage fee for each transaction. Further, enabling fractional share ownership in follow up versions of the feature will allow customers to get into the market with as little as $1.

Benefits for new user growth:

(A) Lower New User Barrier to Entry: Stock trading enables a lower barrier to entry for new customers who can open an account and invest $1. The barrier to entry is psychologically lower which means more customers will sign up.

“Something we learned early on with [Stock and ETF] Trade is that it was a really effective customer acquisition tool.” -

Avrum Laurie, VP Product at WealthSimple⁠

⁠

(B) New GTM opportunities: A new functionality like stock trading is a noteworthy change that can be used as a meaningful marketing moment. Examples include refreshing the website, buying digital and physical ads, and launching an extended referral program that reward referrers/referees with

free stocks⁠

Success Metrics

The primary success metric for this feature is an increase in new users who fund their Titan account. My hypothesis is that MoM growth rate for new account funders will increase by a relative 25% for the

target audience⁠

I’d also be monitoring the following secondary metrics

DAU/MAU

% of customers who convert from Stock and ETF trading to other Titan products

Customer retention

Growth in assets under management (AUM)

Customer support outreach for the Stock and ETF trading (guardrail metric)

NPS Feature 👍 | ETF Tax Loss Harvesting on Autopilot

Feature Overview & Customer Benefits

Success Metrics

Execution Plan

How it Works

High Level Scope and User Stories

Launch Plan

Risks & Considerations

Growth Feature 📈 | Titan Trade: Zero Commission Stock and ETF Trading

Feature Overview & Benefits

Success Metrics

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