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Date: 2024-05-21 Page is: DBtxt003.php txt00010591

Company ... Wealthfront
Sector ... Investment Advisory

Automated Investment Services Company Wealthfront Now Manages Over $538M In Assets, Up 450 Percent Over The Past Year


Peter Burgess

Automated Investment Services Company Wealthfront Now Manages Over $538M In Assets, Up 450 Percent Over The Past Year

Automated investment services company Wealthfront has made its name over the past two years as an alternative to traditional financial advisory services like Fidelity for individuals, who are just starting to pull their savings together. Today the company, the brainchild of former Benchmark Capital founder Andy Rachleff, is announcing that it manages over $538 million assets, making it the largest and fastest-growing software-based financial advisor.

To put things into perspective, Wealthfront began 2013 with just $100 million assets under management, growing over 450 percent in just one year. It took Wealthfront almost a year to reach $67 million in assets under management, and in December alone Wealthfront added over $67 million in assets.

Wealthfront COO Adam Nash tells us that employees from companies like Google, Facebook, Twitter and LinkedIn have turned to Wealthfront to have software manage their investments in lieu of a traditional advisor. He adds that because managing money is based on trust, this worth of mouth has been extremely successful so far. “And products don’t go viral unless they provide value,” he explains.

For background, Wealthfront goes beyond just automating investing–the company’s fees are set up to undermine the models of incumbent investment services like Fidelity, Schwab, and any other mutual fund investor or financial advisor. It also comes with features like tax-loss harvesting for any account worth at least $100,000. If you make a profit on parts of that account’s portfolio, it’ll reinvest it and avoid taxes on the gains by doing so.

The company says its clients vary in age between 19 and 93, with over 55 percent of users under age 35. The average Wealthfront client invests $80,000 to $100,000, but the minimum continues to be $5,000. The firm’s largest accounts stretch to well above $5 million. Additionally, Wealthfront is free for accounts under $10,000, and 20 percent of Wealthfront clients have a liquid net worth of less than $50,000. Over 16 percent of clients’ liquid net worth is in excess of $1 million.

Unsurprisingly, the client base tends to be tech-heavy. The companies where Wealthfront has the most clients are, in order, Google, Facebook, LinkedIn, Microsoft, Twitter, Palantir, VMware, Apple, Intuit and Cisco.

Nash says the company is going to continue to double down on product development in 2014, and “continue to acquire and delight customers.” It’s important to note that there are a number of competitors in the space who are looking to become the next-generation financial advisory platform of choice, including Betterment, Personal Capital, and SigFig.

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