|Industry||Personal finance, Stock exchanges, Finance|
Redwood City, California
|AUM||$15.85 billion (2020) |
Number of employees
Wealthfront Inc. is an automated investment service firm based in Palo Alto, California, founded by Andy Rachleff and Dan Carroll in 2008. As of September 2019, Wealthfront had $21 billion AUM across 400,000 accounts.
Wealthfront was founded by Benchmark co-founder Andy Rachleff and Dan Carroll in 2008 as kaChing, a mutual fund analysis company, before pivoting into wealth management. Rachleff was the firm's founding CEO. In December 2012, the firm started tax-loss harvesting for accounts of more than $100,000.
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. Between January 2014 and October 2016, Adam Nash was Wealthfront's CEO. Founder Andy Rachleff retook the role in 2016.
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. Andy Rachleff is currently the executive chairman and chief executive officer. In January 2018, Wealthfront launched homeownership planning tool for Path. In January 2020, Wealthfront was listed in Business Insider's Top 10 Best Robo Advisors in 2020.
In January 2022, UBS agreed to acquire Wealthfront for $1.4 billion. The acquisition was mutually terminated in September 2022 with both companies not providing a reason. UBS announced that it would instead invest in a $69.7 million note convertible into Wealthfront shares, valuing the latter at its acquisition price.
In February 2019, Wealthfront introduced a cash account, a high interest savings account. The cash account has an interest rate that tracks the federal funds rate, is FDIC insured up to $1 million, and has an account minimum of $1. Wealthfront is able to offer the $1 million FDIC insurance because it deposits its clients' cash account funds in a network of partner banks including Citibank, HSBC, and Wells Fargo.
In June 2020, Wealthfront added checking features to this account including direct deposit, bill pay, and ATM access.
The cash account was originally available only to clients with an existing investment account. In August 2020, Wealthfront made the cash account generally available.
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.
The company has received funding from Benchmark Capital, DAG Ventures, Index Ventures, The Social+Capital Partnership and individuals, including Marc Andreessen, Ben Horowitz and Jeff Jordan. In April 2014, Wealthfront raised $35 million in a funding round led by Index Ventures, Ribbit Capital and Benchmark Capital. The funding round brought the firm's total funding to $65.5 million.
- "Top 5 largest robo-advisers by AUM". 22 March 2021.
- Leena Rao (2014-01-13). "Automated Investment Services Company Wealthfront Now Manages Over $538M In Assets, Up 450 Percent Over The Past Year". Retrieved 2014-08-22.
- Brooke Southall (2014-01-30). "Andy Rachleff is out as CEO of Wealthfront as former LinkedIn star takes his place". Retrieved 2014-08-22.
- Saitto, Serena (25 March 2014). "Wealthfront Said to Be Raising $30 Million Led by Index". Bloomberg News. Bloomberg L.P. Retrieved 22 August 2014.
- "The 2014 CNBC Disruptor 50 List". CNBC. 17 June 2014. Retrieved 2014-08-22.
- Eric Savitz (2012-03-01). "WealthFront: Asset Manager Targets Valley's Nouveau Riche". Forbes. Retrieved 2014-08-22.
- Leena Rao (2014-04-02). "Automated Investment Service Wealthfront Raises $35M From Index, Ribbit Capital". Retrieved 2014-08-22.
- "2020 Robo-Advisors With the Most AUM - And the Winner Is..." Robo-Advisor Pros. 2020-10-02. Retrieved 2021-02-14.
- Jason Kincaid (2009-12-15). "kaChing Raises $7.5 Million To Turn Mutual Funds On Their Heads". Retrieved 2015-03-19.
- Tom Taulli (2012-02-07). "Interview: Wealthfront CEO and Founder Andy Rachleff". Retrieved 2014-08-22.
- Marcus Wohlsen (2012-10-09). "Now Tech Plebes Can Dodge Taxes Like a Former Governor". Wired. Retrieved 2014-08-22.
- Kim-Mai Cutler (2012-10-09). "Financial Planning Startup Wealthfront Woos Silicon Valley Workers With A Once-Secret Investment Trick". Retrieved 2014-08-22.
- 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. Retrieved 27 January 2015.
- "Exclusive: Wealthfront's Founder Reclaims CEO Role as Current Chief Steps Down". Fortune. Retrieved 2020-05-10.
- Andrea Davis (2016-06-03). "Wealthfront leads robo expansion into college savings plans". Retrieved 2016-07-14.
- Neal, Ryan W. (29 January 2018). "Wealthfront app to help millennials with this lofty goal". www.investmentnews.com. Retrieved 2018-05-17.
- "Wealthfront Launches Homeownership Planning Tool - Finovate". Finovate. 2018-01-30. Retrieved 2018-05-17.
- Meola, Andrew. "Top robo advisors in 2020: Performance reviews, returns, and comparisons". Business Insider. Retrieved 2020-03-17.
- "UBS buys Wealthfront in $1.4 bln deal to widen U.S. reach". Financial Post. 2022-01-26. Retrieved 2022-01-26.
- Balezou, Myriam (2022-09-05). "UBS Growth Plans in US Dented After Wealthfront Deal Fails". Bloomberg News.
- Snel, Ross (2022-09-02). "UBS Planned to Buy Robo-Advisor Wealthfront. Now the Deal's off". Barron's.
- "Introducing the Wealthfront Cash Account". Wealthfront Blog. 2019-02-14. Retrieved 2021-02-16.
- "Enjoy high-interest checking with no account fees | Wealthfront". www.wealthfront.com. Retrieved 2021-02-16.
- "Wealthfront's Cash Account: What It is & How to Use It". www.moneyunder30.com. Retrieved 2021-02-16.
- "The Wealthfront Cash Account Now Comes With Checking Features". Wealthfront Blog. 2020-06-29. Retrieved 2021-02-16.
- "Start Earning 2.24% APY on Your Cash Today". Wealthfront Blog. 2019-03-19. Retrieved 2021-02-16.
- Carey, Theresa W. "Wealthfront Review". Investopedia. Retrieved 2021-02-15.
- "Referrals: What's the Wealthfront Invite Program?". Wealthfront Support. Retrieved 2021-02-15.
- "Funding Roundup: Wealthfront Raises $35 Million, Reports 450% Growth". Daily News. 2014-04-04. Retrieved 2014-08-22.
- Gabrielle Karol (2014-06-13). "High-Tech Investing Startup for Millennials Hits $1 Billion in Assets". Retrieved 2014-08-22.