Investment management service Wealthfront now has $570 million in assets under management, the company said today.
Sure, it’s a vanity metric, and Wealthfront CEO Andy Rachleff will readily admit as much. “Most people don’t know how to evaluate a financial adviser, so they use the proxy that’s very simple but isn’t very good and that’s asset management. Half a billion dollars makes them have confidence we will be around.”
The company seems to have taken hold especially with the new, young wealth in Silicon Valley. Google is the company with the most Wealthfront users, followed by Facebook, LinkedIn, Microsoft and Twitter.
Rachleff said that 50 percent to 60 percent of Wealthfront users are from Silicon Valley, but the company now handles money for people from every American state. Some 55 percent of clients are under age 35.
As Rachleff explains it, the advantage of Wealthfront over competitors is that it brings techniques like tax-loss harvesting from the domain of the Mitt Romneys of the world to people who are investing as little as $100,000. (The minimum Wealthfront account of $5,000 doesn’t get that feature.)
A year ago, Wealthfront appeared to be neck and neck with competitor Betterment, at about $100 million worth of assets under management each, but today Wealthfront has pulled ahead, while Betterment is at $360 million, according to a spokesperson.