Company:Wealthfront

From HandWiki
Short description: Automated investment service firm
Wealthfront Inc.
FormerlykaChing (2008–2010)
IndustryPersonal finance, Stock exchanges, Finance
Founded2008; 16 years ago (2008)
Redwood City, California
Founders
  • Andy Rachleff
  • Dan Carroll
Key people
  • Andy Rachleff
  • (CEO & Chairman)
  • Burton Malkiel (CIO)
AUM$50 billion (2023)[1]
Number of employees
238 [2]
Website{{{1}}}

Wealthfront Inc. is an automated investment service firm based in Palo Alto, California ,[3][4][5][6] founded by Andy Rachleff and Dan Carroll in 2008.[7][8] (As of November 2023), Wealthfront had $50 billion AUM across 700,000 accounts.[1]

History

Wealthfront was founded by Benchmark co-founders Andy Rachleff and Dan Carroll in 2008 as kaChing, a mutual fund analysis company, before pivoting into wealth management.[9][7][5][10] Rachleff was the firm's founding CEO.[10] In December 2012, the firm started tax-loss harvesting for accounts of more than $100,000.[11][12]

The company started 2013 with $97 million in assets under management and grew by 450% in one year.[8] In 2013, Wealthfront introduced "direct indexing", a tax-loss harvesting platform that purchases the individual securities of an investment portfolio.[13] Between January 2014 and October 2016, Adam Nash was Wealthfront's CEO.[4] Founder Andy Rachleff retook the role in 2016.[14]

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.[15] Andy Rachleff is currently the executive chairman and chief executive officer. In January 2018, Wealthfront launched homeownership planning tool for Path.[16][17] In January 2020, Wealthfront was listed in Business Insider's Top 10 Best Robo Advisors in 2020.[18]

In January 2022, UBS agreed to acquire Wealthfront for $1.4 billion.[19] The acquisition was mutually terminated in September 2022 with both companies not providing a reason.[20][21] UBS announced that it would instead invest in a $69.7 million note convertible into Wealthfront shares, valuing the latter at its acquisition price.[21]

Cash account

In February 2019, Wealthfront introduced a cash account, a high interest savings account.[22] 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.[23][24]

In June 2020, Wealthfront added checking features to this account including direct deposit, bill pay, and ATM access.[25]

The cash account was originally available only to clients with an existing investment account. In August 2020, Wealthfront made the cash account generally available.[26]

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.[27][28]

Finances

The company has received funding from Benchmark Capital, DAG Ventures, Index Ventures, Social Capital and individuals, including Marc Andreessen and Jeff Jordan.[10] In April 2014, Wealthfront raised $35 million in a funding round led by Index Ventures, Ribbit Capital and Benchmark Capital.[29] The funding round brought the firm's total funding to $65.5 million.[30]

See also

References

  1. ↑ 1.0 1.1 "Roboadvisor Wealthfront reaches $50 billion in client assets" (in en-US). 2023-11-16. https://www.reuters.com/business/finance/roboadvisor-wealthfront-reaches-50-billion-client-assets-2023-11-16/. 
  2. ↑ Wealthfront
  3. ↑ Leena Rao (2014-01-13). "Automated Investment Services Company Wealthfront Now Manages Over $538M In Assets, Up 450 Percent Over The Past Year". https://techcrunch.com/2014/01/13/automated-investment-services-company-wealthfront-now-manages-over-538m-in-assets-up-450-percent-over-past-year/. Retrieved 2014-08-22. 
  4. ↑ 4.0 4.1 Brooke Southall (2014-01-30). "Andy Rachleff is out as CEO of Wealthfront as former LinkedIn star takes his place". http://www.riabiz.com/a/5022384834740224/andy-rachleff-is-out-as-ceo-of-wealthfront-as-former-linkedin-star-takes-his-plac. Retrieved 2014-08-22. 
  5. ↑ 5.0 5.1 Saitto, Serena (25 March 2014). "Wealthfront Said to Be Raising $30 Million Led by Index". Bloomberg L.P.. Bloomberg News. https://www.bloomberg.com/news/2014-03-24/wealthfront-said-to-be-raising-30-million-led-by-index.html. Retrieved 22 August 2014. 
  6. ↑ "The 2014 CNBC Disruptor 50 List". 17 June 2014. https://www.cnbc.com/id/101714841. Retrieved 2014-08-22. 
  7. ↑ 7.0 7.1 Eric Savitz (2012-03-01). "WealthFront: Asset Manager Targets Valley's Nouveau Riche". https://www.forbes.com/sites/ericsavitz/2012/03/01/wealthfront-asset-manager-targets-valleys-nouveau-riche/. Retrieved 2014-08-22. 
  8. ↑ 8.0 8.1 Leena Rao (2014-04-02). "Automated Investment Service Wealthfront Raises $35M From Index, Ribbit Capital". https://techcrunch.com/2014/04/02/automated-investment-service-wealthfront-raises-35m-from-index-ribbit-capital/. Retrieved 2014-08-22. 
  9. ↑ Jason Kincaid (2009-12-15). "kaChing Raises $7.5 Million To Turn Mutual Funds On Their Heads". https://techcrunch.com/2009/12/15/kaching-funding/. Retrieved 2015-03-19. 
  10. ↑ 10.0 10.1 10.2 Tom Taulli (2012-02-07). "Interview: Wealthfront CEO and Founder Andy Rachleff". http://investorplace.com/ipo-playbook/interview-wealthfront-ceo-and-founder-andy-rachleff/. Retrieved 2014-08-22. 
  11. ↑ Marcus Wohlsen (2012-10-09). "Now Tech Plebes Can Dodge Taxes Like a Former Governor". Wired. https://www.wired.com/2012/10/mitt-romney-wealthfront-taxes/. Retrieved 2014-08-22. 
  12. ↑ Kim-Mai Cutler (2012-10-09). "Financial Planning Startup Wealthfront Woos Silicon Valley Workers With A Once-Secret Investment Trick". https://techcrunch.com/2012/10/09/wealthfront-tax-loss-harvesting/. Retrieved 2014-08-22. 
  13. ↑ Wommack, Sanders (19 December 2014). "Wealthfront's high-net-worth cat leaps out of the bag -- keeping it one robo 'pivot' ahead of Schwab". RIA Biz. 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. Retrieved 27 January 2015. 
  14. ↑ "Exclusive: Wealthfront's Founder Reclaims CEO Role as Current Chief Steps Down" (in en). https://fortune.com/2016/10/31/wealthfront-andy-rachleff/. 
  15. ↑ Andrea Davis (2016-06-03). "Wealthfront leads robo expansion into college savings plans". http://www.financial-planning.com/news/wealthfront-leads-robo-expansion-into-college-savings. Retrieved 2016-07-14. 
  16. ↑ Neal, Ryan W. (29 January 2018). "Wealthfront app to help millennials with this lofty goal". http://www.investmentnews.com/article/20180129/FREE/180129923/wealthfront-app-to-help-millennials-with-this-lofty-goal. 
  17. ↑ "Wealthfront Launches Homeownership Planning Tool - Finovate" (in en-US). Finovate. 2018-01-30. http://finovate.com/wealthfront-launches-homeownership-planning-tool/. 
  18. ↑ Meola, Andrew. "Top robo advisors in 2020: Performance reviews, returns, and comparisons". https://www.businessinsider.com/best-robo-advisors. 
  19. ↑ "UBS buys Wealthfront in $1.4 bln deal to widen U.S. reach" (in en). Financial Post. 2022-01-26. https://financialpost.com/pmn/business-pmn/ubs-buys-wealthfront-in-1-4-bln-deal-to-widen-u-s-reach. 
  20. ↑ Balezou, Myriam (2022-09-05). "UBS Growth Plans in US Dented After Wealthfront Deal Fails". Bloomberg News. https://www.bloomberg.com/news/articles/2022-09-05/ubs-growth-strategy-in-us-dented-after-wealthfront-deal-spiked. 
  21. ↑ 21.0 21.1 Snel, Ross (2022-09-02). "UBS Planned to Buy Robo-Advisor Wealthfront. Now the Deal's off". Barron's. https://www.barrons.com/advisor/articles/ubs-wealthfront-cancel-merger-robo-advisor-51662157295. 
  22. ↑ "Introducing the Wealthfront Cash Account" (in en). 2019-02-14. https://blog.wealthfront.com/introducing-wealthfront-cash-account/. 
  23. ↑ "Enjoy high-interest checking with no account fees | Wealthfront" (in en). https://www.wealthfront.com/cash. 
  24. ↑ "Wealthfront's Cash Account: What It is & How to Use It". https://www.moneyunder30.com/wealthfronts-cash-account. 
  25. ↑ "The Wealthfront Cash Account Now Comes With Checking Features" (in en). 2020-06-29. https://blog.wealthfront.com/the-wealthfront-cash-account-now-comes-with-checking-features/. 
  26. ↑ "Start Earning 2.24% APY on Your Cash Today" (in en). 2019-03-19. https://blog.wealthfront.com/start-earning-2-24-apy-on-your-cash-today/. 
  27. ↑ Carey, Theresa W.. "Wealthfront Review" (in en). https://www.investopedia.com/wealthfront-review-4587933. 
  28. ↑ "Referrals: What's the Wealthfront Invite Program?" (in en-US). https://support.wealthfront.com/hc/en-us/articles/209353126-Referrals-What-s-the-Wealthfront-Invite-Program-. 
  29. ↑ "Funding Roundup: Wealthfront Raises $35 Million, Reports 450% Growth". Daily News. 2014-04-04. http://www.dailynewsen.com/business/funding-roundup-wealthfront-raises-35-million-reports-450-growth-h2465405.html. Retrieved 2014-08-22. 
  30. ↑ Gabrielle Karol (2014-06-13). "High-Tech Investing Startup for Millennials Hits $1 Billion in Assets". http://www.entrepreneur.com/article/234657. Retrieved 2014-08-22. 

External links



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