SOURCE: Wealthfront

Wealthfront

October 20, 2010 08:00 ET

kaChing Becomes Wealthfront, Appeal of Performance Attracts More Than $100M to Investing Site in First Year

Wealthfront Introduces Manager Recommendations, Makes It Even Easier for 33 Million American Households to Invest Well

PALO ALTO, CA--(Marketwire - October 20, 2010) - One-year after launching its investing platform, the company known as kaChing formally announced today that it has changed its name to Wealthfront and unveiled a host of new product features as the company continues to deliver on its promise to make it easy to invest well. An SEC Registered Investment Advisor, Wealthfront also announced more than 25 registered money managers have qualified and joined Wealthfront, and that it has attracted more than $100 million in assets to its investing platform. 

Average American investors, made up of 33 million American households with a net worth of between $100,000 and $1.5 million, have collectively invested $7 trillion in the stock market. Yet the average American with a net worth of less than $1.5 million has long been conditioned to believe it is impossible to outperform the market. A recent study, commissioned by Wealthfront and conducted by telephone by Harris Interactive* confirmed this attitude, finding that only 6% of all U.S. adults, and only 3% of those with a financial advisor, "strongly agree" that financial advisors know how to consistently outperform the market. This finding is unsurprising since access to quality money managers has been traditionally limited to wealthy individuals with a net worth of at least $1.5 million who can afford the high minimum investment requirements. 

"People have been conditioned to believe outstanding performance is impossible, but we think it IS possible," said Andy Rachleff, CEO of Wealthfront. "Everyone deserves a better way to invest, and with our ability to vet, select and recommend outstanding money managers for investors, we believe Wealthfront can meet this need."

Wealthfront Managers Outperformed the Market in Last Twelve Months
Wealthfront has built its business on the fundamental belief that it is not only possible to consistently outperform the market, but that it is also possible, using the methodology of the Ivy League endowments, to identify which money managers will outperform.

Since launching as an SEC registered investment advisor one year ago, Wealthfront has applied its rigorous vetting process, for which an average of only one in ten managers qualify, to add 25 top professional money managers to its investing platform and make them accessible to anyone with a minimum of $10,000 to invest. Together over the past year, Wealthfront's managers have collectively outperformed the S&P 500 by more than 6% net of fees. 

Today's announcement, that Wealthfront has attracted more than $100 million in assets to its platform, further demonstrates the company's appeal to both average investors looking for a better way to invest and to top professional money managers looking to scale their business through cost-effective distribution. 

"With Wealthfront, we can easily and cost-effectively access a new segment of investors by taking on accounts well below our historic minimums," said Colin Higgins, president of The Golub Group, an investment management firm with more than $600 million under management. "There's no reason average investors with a net worth of less than $1 million shouldn't have more options to invest their money. Now with Wealthfront -- they do."

Recommendations Make Finding the Best Money Managers for You Easy
According to the Harris Interactive survey, about one in two U.S. adults believe they know how to evaluate financial advisors. Responding to the need to make it easier for the average investor to invest well, Wealthfront also unveiled today its new recommendation engine to match investors with the most appropriate money managers for them. Taking an algorithmic approach, Wealthfront first vets managers to qualify for its platform. Investors then answer a few short questions about their investing goals, and Wealthfront recommends the best money managers to suit their goals. 

About Wealthfront
Wealthfront's mission is to make it easy to invest well by recommending outstanding professionals to manage your money. An SEC registered investment advisor, Wealthfront makes it possible for average investors to access outstanding registered money managers who otherwise might require a minimum investment of $1,000,000 or more, and quality money managers with less than $1 billion under management to easily access new potential customers. The company's management team is staffed by experts from the eCommerce, investment and university endowment worlds. Wealthfront has raised more than $10 million in venture capital from DAG Ventures, as well as a number of individuals including Marc Andreessen, Jeff Jordan, CEO of Open Table and former president of PayPal, and partners from Benchmark Capital, Index Ventures and Kleiner Perkins Caufield & Byers. For more information, visit www.wealthfront.com.

*The survey was conducted by Harris Interactive by telephone within the United States on behalf of Wealthfront between August 4 - 8, 2010 among a nationwide cross section of 1,006 adults (aged 18 and over), of whom 442 have a financial advisor and 555 do not have a financial advisor, with an overall sampling error of plus or minus 3 percentage points.