- Wealthfront has automated the movement of user funds between additional in-app accounts.
- Yet with competitors offering similar tools, it should further expand its services by adding insurance.
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The US-based digital wealth manager has expanded the functionality of its Autopilot automation tool, per PR Newswire.
At its launch last September, Autopilot monitored a user’s Wealthfront cash account or third-party checking account for excess cash and automatically transferred the balance to their investment account. Now, users can set the feature to transfer the excess cash to a wider range of accounts, including a Wealthfront Roth IRA, Traditional IRA, or a 529 College Savings Plan. Founded in 2011, Wealthfront offers a cash account with checking account features, a robo-advisory investment account, and a portfolio line of credit.
The automation tool’s broadened functionality advances Wealthfront’s quest to become a one-stop shop for users’ financial needs. Autopilot’s expansion makes it easier for users to put their idle cash to work. The added convenience should boost customers’ satisfaction and encourage them to deposit more funds into Wealthfront’s other services, such as its robo-advisory platform.
The expanded feature also helps Wealthfront better meet user financial needs under one roof. For example, the digital wealth manager’s cash account already comes with a 0.35% annual percentage yield (APY), early paycheck access, and a debit card. Now with the bolstered Autopilot feature, Wealthfront further lightens the burden of managing money.
But digital wealth managers across the board are diversifying their product suites to meet customer demand, making it difficult for any one app to stand out.
- US robo-advisors are offering an increasingly similar set of tools. Betterment, for example, also offers checking and savings accounts. And with the pandemic accelerating demand for fintech solutions—59% of US consumers are using more fintech apps to manage money than before the crisis—Wealthfront is not alone in expanding its automating tool: Last December, M1 Finance launched Smart Transfers, which lets users set thresholds to automatically move money between their M1 accounts, including its checking account. Wealthfront therefore faces a challenge in attracting customers amid a sea of similar options.
- To better compete, Wealthfront should add access to insurance coverage options. As a result of their similarities, competition between digital wealth managers is becoming fierce: Wealthfront recently accused M1 Finance of allegedly using unethical means to obtain information on its product and marketing. To better compete, the digital wealth manager should add an online marketplace to its app where users can compare and access different insurance products. Picking an insurance product is a big financial commitment for most consumers, and Wealthfont could help ensure they make the right one—helping cement its position at the center of users’ financial needs.
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