Automated investment services company Wealthfront has made its name as an alternative to traditional financial advisory services for individuals, especially “Generation Y” techies just starting to pull their nest eggs together.
Today, the company is looking to expand its user base in a different direction with the launch of Wealthfront.org, a site that will provide investment advisory tools to non-profits. While Wealthfront’s core product gives free services to accounts with less than $10,000 in assets, the non-profit product bumps that up to the first $1 million in assets. Above that, Wealthfront.org will charge its standard 0.25 percent fee.
Wealthfront COO Adam Nash said in an interview this week that while Wealthfront.org is not itself a non-profit, the company is looking at this as a philanthropic endeavor. “This is not a revenue-motivated play. This is not build to be new business line for us,” he said. “We look at this as one way for us as a company to give back.”
While major non profit organizations such as the Bill and Melinda Gates Foundation often have their own asset managers on staff, there are hundreds of small- to medium-sized 501 (c)(3) organizations who have endowments that could benefit from being professionally managed. But because non-profits must be conservative with their capital, it’s a space that most traditional financial advisory firms don’t work to address.
The .org launch comes as Wealthfront is seeing solid growth in its core product. The company, which has raised $30.5 million in venture capital, now has $350 million in assets under management — a nice ratio for a startup with a full time staff of just 30.
There are, of course, a number of competitors in the space who are looking to become the next-generation financial advisory platform of choice, including Betterment, Personal Capital, and SigFig. But today, the launch of Wealthfront.org is a nice way for this company to show that it’s thinking of more than just its own profits as it looks to grow.
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