Wealthfront is continuing its intentional evolution into something different from its intial mission of investing. In another step along that journey the robo advisor has positioned itself as a “nextgen banking service,” according to a press release Wednesday, where it announced a feature to automate clients’ savings. The new feature, called “Autopilot,” monitors users’ checking or Wealthfront Cash Account and schedules transfers of “excess cash” into a Cash Account or Investment Account at Wealthfront, effectively increasing the assets on the firm’s platforms.
Autopilot is a “free financial assistant,” said Chris Hutchins, head of autonomous financial planning at Wealthfront. “Our clients are diligent savers and follow best practices to grow their savings, but they struggle to prioritize managing their finances among a long list of competing priorities,” he added, in a statement. “This can lead to missed days in the market or missed days of compounding interest, which has a huge negative impact on [clients’] long term net worth.”
Wealthfront’s Autopilot won’t replace recurring transfers, however. “Autopilot is more intelligent than recurring transfers because it adjusts the size and timing of your transfers to reflect changes in your account balance over time,” according to a Wealthfront blog post. “But you can also use Autopilot in tandem with recurring transfers to make sure any excess cash gets put to work, too.”
Currently, Autopilot can only monitor one account at a time, but the firm is working on expanding its capabilities to monitor “multiple accounts and transfer funds to multiple destination accounts,” according to its blog. The company is trying to improve the speed of its money movement between Wealthfront accounts, too.
While the new feature is an improvement, Wealthfront has ground to cover if it wants to be considered a first-class banking option, said David Goldstone, head of research at Backend Benchmarking.
“Wealthfront’s cash accounts are growing into a very attractive suite of products, but I do not think they are significantly ahead of other top-tier digital banking products, yet,” said Goldstone. Wealthfront’s banking suite includes bill pay, “a very common feature across banking;” a feature that allows users to get their paychecks up to two days before they would “normally” be available, also “not unique to Wealthfront” but more unusual among banks; and the Autopilot feature, he said.
“Autopilot, is really the only feature that I would consider significant and different than most other banks,” he explained, while noting that rival Betterment “has had a similar feature available for some time called ‘Two-Way Sweep.'” Betterment launched that feature in December 2018. Ultimately, Autopilot is “a small step” in the automation of daily spending and saving.
Wealthfront does not have its own banking charter, instead opting to partner with Green Dot Bank for checking features.