One of the biggest robo-advisors just got bigger.
On Tuesday, Wealthfront announced that it has raised another $64 million, bringing its total funding to $130 million.The Silicon Valley-based start-up also reached $1.5 billion in assets under management this month, a milestone that helps it pull further ahead of other automated wealth management firms such as Betterment and FutureAdvisor. (It does not disclose revenues.)
With the latest round of funding, Wealthfront now has more than $100 million in cash reserves, a sum that CEO Adam Nash said will help it scale to serve its target audience of millennial investors and "retain independence from Wall Street."
That may become increasingly challenging as Wall Street firms begin to offer their own competitive automated services or partner with other robo-advisor firms.
On Monday, Charles Schwab, one of the world's largest full-service investment services firms, announced it would begin offering its own free robo-advising service, "Intelligent Portfolio," to consumers next quarter and plans to roll out similar services to registered investment advisors soon after. (Automated services use algorithms and model portfolios to allocate investments according to an individual investor's objectives and risk tolerance.)
Other full-service firms have chosen to join forces with robo-advisors. Earlier this month, Fidelity announced that it had formed a partnership with robo-advisor Betterment. That followed reports that TD Ameritrade would be making robo-technology available to the 4,000 independent registered investment advisors who use its custody and trade-clearing services, allowing several robo-advisors who hold assets in custody with the firm to integrate with its platform.