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

David Fortunato discusses Wealthfront's performance, noting assets grew to $99B. He observes that investor sentiment fell steeply in March but recovered by May. Clients are focused on global diversification and tax-loss harvesting via direct indexing. He sees the main competitor as 'under-consumption of financial services' and notes the average new client is 25 years old, actively earning and saving.

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Wealthfront Corporation 6.0
Wealth Manager
David Fortunato 6.0

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 May, and clients are focusing on global diversification rather than fleeing the US market. This suggests a lack of strong directional conviction, pointing to a sideways or rangebound view for tech-heavy indices.

Asks David Fortunato to explain why Wealthfront's stock is down 34% year-to-date despite a strong market, following a Q1 revenue miss.

Carol Massar
David Fortunato

We've stayed focused on building for the long term, growing assets to $99B and clients to 1.5M. We navigated a complex environment where clients transitioned from cash to investing as rates fell.

We drove cross-product adoption and maintained healthy growth in our cash management product.
Asks about the evolution of Wealthfront's product from a simple robo-advisor to one offering individual stocks and direct indexing.

Tim Stenovec
David Fortunato

The huge majority of our assets are still in low-cost, diversified index funds. Even in our single stock product, people buy more ETFs than individual equities. We are building the best place for responsible, long-term investing for people in their 20s-40s.

We added S&P 500 and Nasdaq 100 direct indexing for better tax-loss harvesting.
Asks about investor behavior on the platform, specifically if they are buying energy names due to the war.

Carol Massar
David Fortunato

We've seen a focus on global diversification. Investor sentiment fell steeply in March but recovered fully by the end of May. The most popular product remains our global diversification account.

Most clients do not change their behavior based on sentiment, but you see some flows on the margin.
Asks about the typical client portfolio size and if Wealthfront is seeing inflows from SpaceX employees ahead of the IPO.

Tim Stenovec
David Fortunato

The average client has $70,000, but accounts range from $1 to $100M. We see liquidity events from private markets (IPOs, secondaries) leading to assets flowing onto the platform. We have many clients who are knowledge workers at various companies.
Asks about Wealthfront's biggest competitors, given the size of Robinhood and Schwab.

Carol Massar
David Fortunato

Our number one competitor is under-consumption of financial services. Clients come to us from more speculative or short-term investments and graduate to a diversified, managed portfolio. Our average new client is 25, they work a job and don't have time to day trade.

They are looking for someone to manage their assets for them.

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