News, Vision & Voice for the Advisory Community


Wealthfront is again forced to disclose a bad mistake --testing how far the move-fast, break-things -then-apologize culture can go

The Redwood City robo issues erroneous 1099 data in 2017 that it just discovered. It happened around the time it dumped Apex.

Author Oisin Breen October 19, 2019 at 4:13 AM
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Andy Rachleff is staying the course on a minimum viable product philosophy that has benefits -- and embarrassments.

Jeff Spears

Jeff Spears

October 19, 2019 — 12:39 PM
Tech business practices don’t mesh with FINRA and the SEC. That can be an expensive lesson
Brian Murphy

Brian Murphy

October 19, 2019 — 7:50 PM
Another stain on the house of Wealthfront, but the bigger problem is that they don't have a service that is economically viable - regardless. Robo's spend a lot of time defending high customer acquisition costs in the name of future revenue expansion (higher share of wallet) through I guess proprietary products, high-yield money market funds, etc. But if you turn it around, high CAC is actually telling us that the service itself isn't differentiated enough from others to by adopted at a lower cost by clients - basically poor product/market fit. This whole industry has been thinking about the next generation personal finance service offerings in a very short-sighted way for too long and far too many $s spent. We need to go back to first principles and rethink what it is we're trying to provide our clients...after all, Wealthfront and Betterment investment services really are little more than "target date" funds with added complexity and an account wrapper. Silly, really.

Related Moves

Wealthfront's unlikely tapping of Sheila Bair and Tom Curry signals likely push to gain a bank charter, analysts say

The Redwood City robo-advisor's addition of two renowned former chief banking regulators brings legitimacy and guidance that could lead to a margin-fattening bank charter and help solve the robo-advisor's problem of high client acquisition costs.

December 31, 2020 at 4:37 AM

Wealthfront cedes to four years of investors clamoring for crypto by taking on expensive third-party vendor that Betterment rules out

The Redwood City, Calif., robo-advisor turned a hard 'no' into a soft 'yes' by dealing with Grayscale and its 200 basis-point-plus fees, which its robo rival in NYC -- also without a crypto path -- finds ludicrous.

August 14, 2021 at 2:20 AM

Oisín's Bits: Wealthfront drops old mission statement, declares war on institutions and emphasizes banking future • Seeking Utah charter, Edward Jones may become largest bank in US by branch count • After Advent chief leaves, Black Diamond head steps up

Andy Rachleff cans the old 'democratizing' mission statement at his robo; The 14,200 one-man Ed Jones branches may become branch banks; Steve Leivent consolidates power at SS&C.

July 3, 2020 at 1:12 AM

Mentioned in this article:

Consulting Firm
Top Executive: Bill Winterberg

Portfolio Management System
Top Executive: Andy Rachleff

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