Investment Startup Wealthfront Raises $35 Million In Funding.
A Palo Alto-based startup that has become one of the many firms to threaten Wall Street’s lucrative fees to manage money, named Wealthfront, has recently raised a total of $35 million this week in a round led by Ribbit Capital and Index Ventures.
The automated investment services existing investors have also participated this round, which includes Greylock partners, DAG ventures, Kevin Rose, Tim Ferris, Marissa Mayer and Paul Kedrosky, according to TechCrunch. On the other hand, Wealthfront on the path of something grand. Helping people manage their money by relying on technology to offer services often reserved for those who have at least an amount of $1 million to invest.
Sources have seen Wealthfront doing for the under 35 crowd what Charles Schwab did in a similar manner to Baby Boomers in the 1970s and 80s. The average Wealthfront client tend to invest between $80,000 to $100,000, with a minimum investment of $5,000 required. The firms serve are free for the first $10,000 invested in the firm, with a 0.25 percent fee assets above that amount. The firms website has also noted down that clients who pay an average of 0.17 percent fee that are embedded into the ETFs they hold at Wealthfront.
Wealthfront commented that the average fee charged by financial advisers is 1.31 percent. And many products and services aiming for Main Street are far higher than that.
unlike other advisers other advisers, Wealth front does not offer a break on fees for those holding on to more assets at the firm, Instead, it will offer even more services such as continuous tax-loss collecting for accounts with lesser then $100,000. Wealthfront’s average clients tend to invest between $80,000 to $100,000, 16 percent clients having $1 million liquid net worth.
Wealthfront wishes to managed over more than tens of billion of client assets one day. Currently the firm is already attracting more people among traditional money managing by acquire more than $800 million in client assets.
Wealthfront isn’t aimed to offer clients a one-on-one time with a financial adviser or relationship manager. But certain people do not view working with others and managing their investment is a good thing, This is especially true for clients coming from the tech sector. Wealthfront has had many clients who have come from top brand companies such as, Facebook, Apple, Twitter, Google, and other similar giant companies.