Wealthfront to offer automated financial planning tool for free

0
202


LAS VEGAS (Reuters) – Wealthfront, one of the largest digital wealth management startups known as “robo-advisors”, will offer its automated financial planning tool for free by the end of the year, as it seeks to grow its customer base, it said on Tuesday.

Individuals in the United States who do not have money managed by Wealthfront will be able to connect their various financial accounts to the company’s tool called Path which will calculate their saving and spending rates and help them create a plan for retirement.

Wealthfront launched Path for clients in early 2017 as competitors started to shift strategy by creating new services that included access to human advisors. Others launched similar automated financial planning tools but offered them only to clients with larger accounts.

Wealthfront, which now has over $11 billion in assets under management, said growth picked up following the tool’s launch. It hopes that offering it for free will fuel more growth, co-founder and chief strategy officer Dan Carroll said in an interview. For instance users of the free tool might be persuaded to start having their money managed by Wealthfront, for which the company charges a fee.

“We don’t believe that financial advice should be for the ultra wealthy and it should be behind the paywall,” Carroll said. “We were gratified when we looked at the data, that clients that engage with the engine do save more.”

Users can link various non-Wealthfront accounts to the platform including bank accounts, brokerage accounts and information on the value of their homes. They can play around with the numbers and charts on the mobile app and get real time projections on how much money they will need to save to retire at a certain age.

Robo-advisors automatically create and manage portfolios made up of exchange-traded-funds for customers with as little as a few hundred dollars to invest. This model has driven established players to launch similar services, but some large and smaller firms believe that combining human advice and digital tools could be more successful.

Independent robo-advisors have also been facing concerns about their ability to grow enough to become profitable. This has prompted them to diversify their offering with new kinds of tools.

Reporting by Anna Irrera; Editing by David Gregorio



Source : Reuters