‘Robo-Adviser’ Gets Into Lending

Wealthfront, an automated online financial adviser, or “robo-adviser,” is reportedly breaking into the lending space.

The company has become a client with RBC Capital Markets’ Correspondents Services, providing them with provides them with clearing and custody service. This relationship is part of a move that will allow Wealthfront customers to borrow against their investment accounts. Wealthfront clients with at least $100,000 can reportedly take out loans worth up to 30 percent of their account value, said Bloomberg News.

“We live in a world of ‘instant delivery,’ from taxis to groceries to handymen. So why not add lines of credit to the mix?” Andy Rachleff, CEO of Wealthfront, was quoted as saying. “We want our clients to be able to borrow what they need, when they need it, directly from their smartphones. It takes 30 seconds to sign up, and in many cases, you get your money in 24 hours.”

Interest rates for the new service run between 3.25 percent and 4.5 percent.

Founded in 2011, Wealthfront is one of the fastest growing automated investment services. The company currently manages over $6 billion in assets.

The move into lending comes as the automated financial advising company seeks to diversify its offerings. Recently, Wealthfront has also reportedly debuted a 529 savings plan for college, a financial planning platform called Path as well as a stock option sale service.



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