| Wealthfront Inc. | |
| Former Names: | kaChing (2008–2010) |
| Industry: | Personal finance, Stock exchanges, Finance |
| Aum: | $75 billion (2024) |
| Num Employees: | 238 [1] |
| Foundation: | Redwood City, California |
Wealthfront Inc. is an automated investment service firm based in Palo Alto, California,[2] [3] [4] [5] founded by Andy Rachleff and Dan Carroll in 2008.[6] [7], Wealthfront had over $75 billion AUM across more than 1,000,000 accounts.[8]
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.[9] Rachleff was the firm's founding CEO. In December 2012, the firm started tax-loss harvesting for accounts of more than $100,000.[10] [11]
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.[12] Between January 2014 and October 2016, Adam Nash was Wealthfront's CEO. Founder Andy Rachleff retook the role in 2016.[13]
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.[14] Andy Rachleff is currently the executive chairman and chief executive officer. In January 2018, Wealthfront launched homeownership planning tool for Path.[15] [16] In January 2020, Wealthfront was listed in Business Insider's Top 10 Best Robo Advisors in 2020.[17]
In January 2022, UBS agreed to acquire Wealthfront for $1.4 billion.[18] The acquisition was mutually terminated in September 2022 with both companies not providing a reason.[19] [20] UBS announced that it would instead invest in a $69.7million 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.[21] 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.[22] [23]
In June 2020, Wealthfront added checking features to this account including direct deposit, bill pay, and ATM access.[24]
The cash account was originally available only to clients with an existing investment account. In August 2020, Wealthfront made the cash account generally available.[25]
Wealthfront uses Green Dot Bank for its individual cash accounts' routing and account numbers, and for debit cards linked to individual cash accounts.[26]
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]
The company has received funding from Benchmark Capital, DAG Ventures, Index Ventures, Social Capital and individuals, including Marc Andreessen and Jeff Jordan.[28] 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]