Wall Street and the problem of "way too many publicly traded fintechs"
Summary
At the time, Wealthfront had $1.3 billion in assets under management "from clients in almost every imaginable profession living in all fifty states," Nash wrote, and planned to "extend the benefits of automated investing to an even broader millennial audience." But their evolution also demonstrates how tough it is to build economies of scale and marketing might in a wealth management business with low margins and high costs of customer acquisition already dominated by investment giants like Vanguard and Schwab, and Wall Street banks. For UBS, there were multiple reasons to buy Wealthfront, including allowing it to better compete in the U.S. against domestic rivals in a battle for those covered wealth management clients of the current and future generations. Wealthfront still has a future as its own brand — the UBS CEO said it will operate as a standalone, which he described as growing and successful, and ultimately as the bridge to a service which incorporates both digital-first advice and remote access to human advisors. While the final chapter on whose spend wins hasnt been written, right now, Wealthfronts decision to sell doesnt seem as much capitulation as acceptance of something more fundamental about where the road ends for many disruptors: there are times when it is better to join them rather than keep trying to beat them.