Wealthfront
{{short description|Automated investment service firm}}
{{infobox company
| name = Wealthfront Inc.
| logo = Wealthfront Logo.svg
| logo_size = 128px
| type = Private
| founders = {{ubl|Andy Rachleff | Dan Carroll}}
| hq_location = Palo Alto, CA
| area_served = U.S.
| key_people = {{ubl | David Fortunato|(CEO)|Alan Imberman|(CFO)}}
| products = {{ubl | Asset management | Equities trading | Investment management | Wealth management }}
| industry = {{ubl|Financial services}}
| aum = $80 billion (2025)
| num_employees = 330
| foundation = {{Start date and age|2008}}
Redwood City, California
| homepage = {{official URL}}
}}
Wealthfront Inc. is a financial services company based in Palo Alto, California,{{cite web|url=https://techcrunch.com/2014/01/13/automated-investment-services-company-wealthfront-now-manages-over-538m-in-assets-up-450-percent-over-past-year/|title=Automated Investment Services Company Wealthfront Now Manages Over $538M In Assets, Up 450 Percent Over The Past Year|date=2014-01-13|author=Leena Rao|accessdate=2014-08-22}}{{cite web|url=http://www.riabiz.com/a/5022384834740224/andy-rachleff-is-out-as-ceo-of-wealthfront-as-former-linkedin-star-takes-his-plac|title=Andy Rachleff is out as CEO of Wealthfront as former LinkedIn star takes his place|date=2014-01-30|author=Brooke Southall|accessdate=2014-08-22}}{{cite news|last1=Saitto|first1=Serena|title=Wealthfront Said to Be Raising $30 Million Led by Index|url=https://www.bloomberg.com/news/2014-03-24/wealthfront-said-to-be-raising-30-million-led-by-index.html|accessdate=22 August 2014|agency=Bloomberg L.P.|publisher=Bloomberg News|date=25 March 2014}}{{cite web|url=https://www.cnbc.com/2014/06/17/disruptors-in-2014-wealthfront.html|title= The 2014 CNBC Disruptor 50 List|website= CNBC|date= 17 June 2014|access-date=2014-08-22}} founded by Andy Rachleff and Dan Carroll in 2008.{{cite web|url=https://www.forbes.com/sites/ericsavitz/2012/03/01/wealthfront-asset-manager-targets-valleys-nouveau-riche/|title=WealthFront: Asset Manager Targets Valley's Nouveau Riche|date=2012-03-01|author=Eric Savitz|website=Forbes|accessdate=2014-08-22}}{{cite web|url=https://techcrunch.com/2014/04/02/automated-investment-service-wealthfront-raises-35m-from-index-ribbit-capital/|title=Automated Investment Service Wealthfront Raises $35M From Index, Ribbit Capital|author=Leena Rao|date=2014-04-02|accessdate=2014-08-22}} {{as of|2025|March}}, Wealthfront had over $80 billion AUM across more than 1,000,000 accounts.{{Cite web |title=Give all your money a place to grow {{!}} Wealthfront |url=https://www.wealthfront.com/ |access-date=2024-09-27 |website=www.wealthfront.com |language=en}}
History
Wealthfront was founded by Benchmark co-founder Andy Rachleff together with Dan Carroll in 2008 as kaChing, a mutual fund analysis company, before pivoting into wealth management.{{cite web|url=https://techcrunch.com/2009/12/15/kaching-funding/|title=kaChing Raises $7.5 Million To Turn Mutual Funds On Their Heads|date=2009-12-15|author=Jason Kincaid|accessdate=2015-03-19}} Rachleff was the firm's founding CEO. In December 2012, the firm started tax-loss harvesting for accounts of more than $100,000.{{cite magazine|url=https://www.wired.com/2012/10/mitt-romney-wealthfront-taxes/|title=Now Tech Plebes Can Dodge Taxes Like a Former Governor|date=2012-10-09|author=Marcus Wohlsen|magazine=Wired|accessdate=2014-08-22}}{{cite web|url=https://techcrunch.com/2012/10/09/wealthfront-tax-loss-harvesting/|title=Financial Planning Startup Wealthfront Woos Silicon Valley Workers With A Once-Secret Investment Trick|date=2012-10-09|author=Kim-Mai Cutler|accessdate=2014-08-22}}
The company started 2013 with $97 million in assets under management and grew by 450% in one year. In 2013, Wealthfront introduced "direct indexing", a tax-loss harvesting platform that purchases the individual securities of an investment portfolio.{{cite web | url = http://www.riabiz.com/a/4952379384397824/way-ahead-of-the-industrys-clock-wealthfronts-high-net-worth-cat-leaps-out-of-the-bag----keeping-one-robo-pivot-ahead-of-schwab | title = Wealthfront's high-net-worth cat leaps out of the bag -- keeping it one robo 'pivot' ahead of Schwab | publisher = RIA Biz | date = 19 December 2014 | accessdate = 27 January 2015 | author = Wommack, Sanders}} Between January 2014 and October 2016, Adam Nash was Wealthfront's CEO. Founder Andy Rachleff retook the role in 2016.{{Cite web|title=Exclusive: Wealthfront's Founder Reclaims CEO Role as Current Chief Steps Down|url=https://fortune.com/2016/10/31/wealthfront-andy-rachleff/|website=Fortune|language=en|access-date=2020-05-10}}
In 2016, Wealthfront launched a partnership with the state of Nevada to launch a 529 tax-advantaged college savings plan. In the previous year, Nevada passed approval on a new tax credit for employers who provide fund matching to employees participating in 529 savings programs.{{cite web|url=http://www.financial-planning.com/news/wealthfront-leads-robo-expansion-into-college-savings|title=Wealthfront leads robo expansion into college savings plans|author=Andrea Davis|date=2016-06-03|accessdate=2016-07-14}} Andy Rachleff is currently the executive chairman and chief executive officer. In January 2018, Wealthfront launched homeownership planning tool for Path.{{Cite web|url=http://www.investmentnews.com/article/20180129/FREE/180129923/wealthfront-app-to-help-millennials-with-this-lofty-goal|title=Wealthfront app to help millennials with this lofty goal|last=Neal|first=Ryan W.|website=www.investmentnews.com|date=29 January 2018|access-date=2018-05-17}}{{Cite news|url=http://finovate.com/wealthfront-launches-homeownership-planning-tool/|title=Wealthfront Launches Homeownership Planning Tool - Finovate|date=2018-01-30|work=Finovate|access-date=2018-05-17|language=en-US}} In January 2020, Wealthfront was listed in Business Insider's Top 10 Best Robo Advisors in 2020.{{Cite web|url=https://www.businessinsider.com/best-robo-advisors|title=Top robo advisors in 2020: Performance reviews, returns, and comparisons|last=Meola|first=Andrew|website=Business Insider|access-date=2020-03-17}}
In January 2022, UBS agreed to acquire Wealthfront for $1.4 billion.{{Cite news|date=2022-01-26|title=UBS buys Wealthfront in $1.4 bln deal to widen U.S. reach|language=en|work=Financial Post|url=https://financialpost.com/pmn/business-pmn/ubs-buys-wealthfront-in-1-4-bln-deal-to-widen-u-s-reach|access-date=2022-01-26}} The acquisition was mutually terminated in September 2022 with both companies not providing a reason.{{cite web |url=https://www.bloomberg.com/news/articles/2022-09-05/ubs-growth-strategy-in-us-dented-after-wealthfront-deal-spiked |title=UBS Growth Plans in US Dented After Wealthfront Deal Fails |date=2022-09-05 |work=Bloomberg News |first=Myriam |last=Balezou}}{{cite news | url=https://www.barrons.com/advisor/articles/ubs-wealthfront-cancel-merger-robo-advisor-51662157295 | title=UBS Planned to Buy Robo-Advisor Wealthfront. Now the Deal's off |work=Barron's |first=Ross |last=Snel |date=2022-09-02}} UBS announced that it would instead invest in a $69.7{{nbsp}}million note convertible into Wealthfront shares, valuing the latter at its acquisition price.
Cash account
In February 2019, Wealthfront introduced a cash account, a high interest savings account.{{Cite web|date=2019-02-14|title=Introducing the Wealthfront Cash Account|url=https://blog.wealthfront.com/introducing-wealthfront-cash-account/|access-date=2021-02-16|website=Wealthfront Blog|language=en}} The cash account has an interest rate that tracks the federal funds rate, is FDIC insured up to $8 million, and has an account minimum of $1. Wealthfront is able to offer the $8 million FDIC insurance because it deposits its clients' cash account funds in a network of partner banks including Citibank, HSBC, and Wells Fargo.{{Cite web|title=Enjoy high-interest checking with no account fees {{!}} Wealthfront|url=https://www.wealthfront.com/cash|access-date=2021-02-16|website=www.wealthfront.com|language=en}}{{Cite web|url=https://www.moneyunder30.com/wealthfronts-cash-account|access-date=2021-02-16|website=www.moneyunder30.com|title=Wealthfront's Cash Account: What It is & How to Use It}}
In June 2020, Wealthfront added checking features to this account including direct deposit, bill pay, and ATM access.{{Cite web|date=2020-06-29|title=The Wealthfront Cash Account Now Comes With Checking Features|url=https://blog.wealthfront.com/the-wealthfront-cash-account-now-comes-with-checking-features/|access-date=2021-02-16|website=Wealthfront Blog|language=en}}
The cash account was originally available only to clients with an existing investment account. In August 2020, Wealthfront made the cash account generally available.{{Cite web|date=2019-03-19|title=Start Earning 2.24% APY on Your Cash Today|url=https://blog.wealthfront.com/start-earning-2-24-apy-on-your-cash-today/|access-date=2021-02-16|website=Wealthfront Blog|language=en}}
Wealthfront uses Green Dot Bank for its individual cash accounts' routing and account numbers, and for debit cards linked to individual cash accounts.{{Cite web |last=Wealthfront |date=2024-04-30 |title=What's Green Dot Bank? |url=https://support.wealthfront.com/hc/en-us/articles/360044160871-What-s-Green-Dot-Bank |access-date=2024-06-12}}
Fee structure
Wealthfront charges an advisory fee of 0.25% on funds it invests for its clients. Only investment accounts are charged this fee (cash accounts are not). Wealthfront periodically offers a fee waiver of $5,000 if clients sign-up from affiliate links. Additionally, clients can earn a $5,000 fee waiver for new client referrals; the new client must start using the service, and the fee waiver will be eliminated if the new client leaves the service. Both the referrer and the referee receive the $5,000 fee waiver.
Wealthfront's investment account minimum is $500.{{Cite web|title=Referrals: What's the Wealthfront Invite Program?|url=https://support.wealthfront.com/hc/en-us/articles/209353126-Referrals-What-s-the-Wealthfront-Invite-Program-|access-date=2021-02-15|website=Wealthfront Support|language=en-US}}
Finances
The company has received funding from Benchmark Capital, DAG Ventures, Index Ventures, Social Capital and individuals, including Marc Andreessen and Jeff Jordan.{{cite web|url=http://investorplace.com/ipo-playbook/interview-wealthfront-ceo-and-founder-andy-rachleff/|title=Interview: Wealthfront CEO and Founder Andy Rachleff|date=2012-02-07|author=Tom Taulli|accessdate=2014-08-22}} In April 2014, Wealthfront raised $35 million in a funding round led by Index Ventures, Ribbit Capital and Benchmark Capital.{{cite news|url=http://www.dailynewsen.com/business/funding-roundup-wealthfront-raises-35-million-reports-450-growth-h2465405.html|title=Funding Roundup: Wealthfront Raises $35 Million, Reports 450% Growth|newspaper=Daily News|date=2014-04-04|accessdate=2014-08-22}} The funding round brought the firm's total funding to $65.5 million.{{cite web|url=http://www.entrepreneur.com/article/234657|title=High-Tech Investing Startup for Millennials Hits $1 Billion in Assets|date=2014-06-13|author=Gabrielle Karol|accessdate=2014-08-22}}
See also
References
{{reflist|30em}}