Wealth Management and Market Sentiment (with Carol Massar, Tim Stenovec)

David Fortunato discusses Wealthfront's performance, noting assets have grown to $99 billion. He explains that clients are focused on global diversification amid market complexity, and that investor sentiment fell steeply in March but recovered by the end of May. He discusses the company's direct indexing products and the use of AI. He notes that the average client age is 35, with new clients averaging 25, and that the company does not participate in IPOs, advising clients against them due to volatility.

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Wealthfront Corporation 6.0
Wealth Manager
David Fortunato 5.0

Wealth Management and Market Sentiment (with Carol Massar, Tim Stenovec)

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Fortunato notes that investor sentiment fell steeply in March but recovered by the end of May, and that clients are focusing on global diversification rather than running away from US markets, suggesting a lack of strong directional conviction in the near term.

Carol Massar

Asks why Wealthfront's stock is down 34% year-to-date despite a strong market, given that first quarter revenue missed estimates.
David Fortunato

We've stayed focused on building for the long term. We've grown assets to more than $99 billion and clients to just under 1.5 million. As rates fell last year, we saw clients transition from cash management to investing management. The combination of these things is helping us weather a complicated investment environment.
Tim Stenovec

Asks about the evolution of Wealthfront from a robo-advisor to offering individual stock trading and how clients are investing.
David Fortunato

The huge majority of our assets are still in low-cost index funds. Even in our single stock trading product, folks are buying ETFs more than individual equities. We've seen a lot of focus in global diversification as there is complexity in the US markets. Investor sentiment fell steeply in March but recovered fully by the end of May.
Carol Massar

Asks about competition from Robinhood and Schwab, and who Wealthfront sees as its biggest competitor.
David Fortunato

The number one practical competitor is under-consumption of financial services. Our clients are professionals who don't have time to day trade. They are looking for someone to manage their assets for them. Most new clients are in their mid-20s.
Tim Stenovec

Asks about access to SpaceX in the platform and how users can exclude it from their portfolio.
David Fortunato

We don't do IPOs. We advise clients it's probably not in their long-term interest to participate due to volatility. Most clients can participate in direct indexing, which allows them to exclude specific stocks like SpaceX if they choose.
Carol Massar

Asks how Wealthfront is using AI.
David Fortunato

We've always been a digital-first financial advisor. The opportunity is to use our financial planning and investment tools to do intake, understand clients, and invest for their futures. We're the lowest cost producer in the space, which creates an opportunity for additional automation and advice.

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