UBS has agreed to acquire Wealthfront for $1.4 billion in an all cash transaction. Wealthfront has sent out an e-mail to existing users stating:
- Wealthfront will be able to offer you even more compelling products and services now that we have UBS as a partner.
- Our advisory fee and investment philosophy will remain the same.
- We will continue to offer all our services as usual, and we’re building more this year that we think you’ll love. Our desire to innovate has not changed.
Some readers might have an account from the 1.78% account or the brokerage bonus.
https://www.businesswire.com/news/home/20220902005337/en/UBS-and-Wealthfront-mutually-agree-to-terminate-merger-agreement
Blog https://www.wealthfront.com/blog/our-plans-to-remain-an-independent-company/
This reminds me, does anyone know how to completely close a wealthfront login account? It’s such a pain to figure out this information and gave up a while ago. I forgot my account is still active.
You have to email them, i did that a few weeks ago. The account cant be closwd for tax reasons, it can only be disabled.
Thank you!
This sucks. I choose wealthfront for my retirement because they specifically weren’t a big bank. Guess I gotta look for something else.
Only $1.4B? Seems like a steal, I am a wealthfront customer
Are you worth $1.4B?
Sure, sue me
WF’s growth has been middling. Robo has been lackluster of late and gotten commoditized. I’m a fan generally of the company despite assorted snafus along the way. Was an early adopter (with the WF brand not Kaching). Still like “Path” as a more enjoyable net worth and projected median NW tracker to supplement Personal Capital.
What is Path? Did a google search and couldn’t find it. Not that happy with Personal Capital anymore.
Path is a tool within WF that lets you model your net worth and burn rate once you retire.
https://blog.wealthfront.com/introducing-path/
Replies are missing the point. This is about customer acquisition. No doubt this was seen as a way to collect Millennial and Gen Z customers that traditional banks/brokerages are probably struggling to do. Younger customers are not carrying much assets today, but they will years/decades from now after they’ve locked in to their financial services of choice. Not to mention, Boomers aka the richest generation in US history will die off and their Millennial/Gen Z children will reap the windfalls. Fintech companies are trying to get acquired more than they are looking to compete on the size of the big firms. Expect more acquisitions to happen this year, especially if some fintech companies start running lower on cash due to market downturn and tougher borrowing environment.
Lol. Is this an alt for Every Sperm Is Sacred?
GenX often gets overlooked, but when the boomers pass on, the money goes to GenX! Wait your turn lol.
Does anyone see a place for old school wealth management firms like UBS or Morgan Stanley? I guess they have huge profits somehow. Just seems like asset management is unnecessary when I can do it all on an app with no fees. I know they provide other services but how often are those used…
They’re generally not useful when someone is young, yeah, but when approaching retirement, it can be nice to be with a single firm that will not only manage your investments but will also handle your taxes, set up a trust and deal with other estate planning, pass off/sell a business, and do all of the other really tedious stuff all under one roof.
My parents were both very hands-on and self-directed investors, but they were very happy to delegate to a full-service firm when they turned 65. For some people, abdicating all of the responsibility is worth a 100-basis point drag on their portfolio even if it sounds crazy to others.
What Morgan Stanley, UBS, etc. get out of these programs is a large client list of HENRYs who may eventually become full-service WM customers if nudged even if they are not currently ready to buy in. If they do happen to buy in earlier, that’s all the better from their perspective.
High
Earner
Not
Rich
Yet
Doctors, tech workers with stock options, other jobs that return approximately six figures on up, you get the idea.
Rob advisors (at least at their current state) cannot handle more complex wealth management situations. There will likely always be a segment of more affluent population that wants to delegate to an advisor.
It makes a lot of sense to have different platforms / fee levels for different customers, with a common backend. There are a lot of synergies on the cost/compliance end. Plus having different levels means customers can grow with the firm.
Plus the VCs gotta get an exit. These Roboadvisor companies were founded after the financial crisis so approaching 10 years.
Neither UBS nor Morgan Stanley really depend on “wealth management” for revenue. UBS is a huge bank about the size of Citibank. Morgan Stanley is mostly about investment banking. I think UBS overpaid here, probably as a result of some corporate power struggle, meh.
UBS struggles to consistently make money consistently outside of their WM divisions. As does CS
U BS-ing me, right?
1.4 billion?
You should do stand-up.
This looks like a well-timed sale for Wealthfront, after a historic run up in the markets.
I hope they are going to continue that promotion.