Robo-adviser Wealthfront is taking the final step toward becoming a full-fledged digital bank and a financial hub that can serve all of its clients’ cash management needs on a single platform.
In an email to customers Wednesday, the independent robo-adviser announced new cash accounts that come with routing numbers and debit cards and have the ability to set up direct deposit for paychecks, pay bills automatically — like cable, mortgage or rent — and access a nationwide network of 19,000 ATMs.
It’s long been the dream of CEO Andy Rachleff to transform Wealthfront’s investment platform into a one-stop shop that offers clients checking, investing and savings accounts all under one roof, or what he refers to as “self-driving money.” The ability to accept direct deposits of client paychecks is a final step in that journey.
“There’s a lot going on in our country and the world today and we hope you are safe,” the company said in the email Wednesday evening. “While we know that enhancements to your cash account aren’t top of mind right now, we have an update to share about the features we promised to deliver this summer.”
The most significant new feature is the direct deposit function, which is the hallmark of any fully automated cash management system. Rachleff has said that his vision of the future of automated advice is that after a client’s paycheck is deposited, the Wealthfront platform automatically pays the client’s bills, tops off emergency funds and invests the rest to meet the client’s investing goals.
“These features are an important first step towards our ultimate goal — to optimize and automate your entire financial life,” Rachleff wrote in an email to clients first announcing the cash accounts in March.
A Wealthfront spokesperson confirmed the robo-adviser is gradually making features available to its existing clients and aims to open up the tools to the public at the end of June.
Wealthfront declined to comment further on the new launch.
Such tools have proved successful for the entire automated investing industry. Wealthfront said in September that the products helped the robo-adviser double assets in just eight months and pulled in more than $1 billion in the first month.
Not to be outdone, Wealthfront’s robo-adviser rival Betterment said in March that its assets topped $22 billion in part as a result of adding cash management tools last year. In April, hybrid robo Personal Capital said it had amassed over $360 million in deposits in approximately 20,000 accounts since launching last year.
Overall assets managed by robos surged in 2019, according to research from consulting firm Aite Group. The total market is expected to reach $1.26 trillion by the end of 2023, although robo assets totaled only about $283 billion in 2019.