Every industry has its own culture. And the culture of Silicon Valley is one of aversion to fees, lofty promises and suits. Enter Wealthfront, a money manager aimed at the newly or soon-to-be newly rich of the start-up heave on the world. A Businessweek article profiles this company and its founder, Andy Rachleff, a former venture capitalist.
“The common refrain we get from people at companies that are going public is ‘How do we get those suits out of our lobby?'” Rachleff asks. When Rachleff was a VC, he was struck by how few of the entrepreneurs he was backing had access to any decent financial advice. “I could never advise young people at our companies to do what I did because they couldn’t afford the minimums,” he says.
Wealthfront’s minimum is $5,000 with a 0.25 percent annual fee, compared to typical minimums of $1 million and 1 percent of other wealth managers. Customers share their goals and hand over their money, and Wealthfront uses its software to apply its diversification strategy of equities, bonds, natural resources and index funds.
Competitors to this market include Personal Capital, Betterment and Motif Investing. However, the magazine writes: “None of them quite matches Wealthfront’s absence of human touch and do-no-harm message.”
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