Wealthfront Fuels Customer Acquisition Efforts with Custom Wallets and Cryptos
The US-based digital wealth manager allows users to customize their portfolios from a selection of exchange-traded funds (ETFs) and a wider range of socially responsible investment options, through Initiated. Wealthfront will also allow users to invest in cryptos from 2021. It is not yet clear whether this will take the form of direct investment options or ETFs. expected to be regulated this year, but there will likely be an investment cap to protect users from volatility.
In an American market increasingly crowded with robo-advisory, these new offers should allow Wealthfront to stand out and develop its assets under management.
- New portfolio customization capabilities will broaden the appeal of Wealthfront’s platform. This takes advantage of the growing interest in self-directed investing and the rapid growth of do-it-yourself investment platforms like Robin Hood, which added 3 million new users in 2020 to reach over 13 million in total. It also marks a slight departure from the limited portfolio customization that characterizes robo-advisers and will allow Wealthfront to gain an edge over its competitors, such as Improvement, which is also exploring more suitable offers.
- Supporting crypto options ahead of its competition will also differentiate Wealthfront’s offering and fuel customer growth. FinTechs that add crypto products can mine growing interest into investing in crypto and take advantage of vast customer acquisition opportunities: Robinhood Crypto added 6 million customers in the first two months of 2021, for example. Wealthfront follows the example of American society Silver Lion, but its main competitors Betterment and M1 Finance have yet to jump on the bandwagon. This could give Wealthfront a front-runner advantage and attract customers for the time being.