Robo-advisor dream of disrupting Wall Street wealth is not working out exactly as planned
Over the past decade a niche of fintech wealth management firms including Wealthfront, Personal Capital and Betterment tackled one of the biggest disruptive challenges: financial services.
Wealthfront’s $1.4 billion sale to UBS this week, which was preceded by Personal Capital’s $1 billion sale to Empower Financial in 2020, leaves Betterment among stand-alone robo-advisors.
The exits show that building economies of scale and marketing might in wealth management are difficult to do in a business with low margins and high costs of customer acquisition already dominated by investment giants like Vanguard and Schwab and Wall Street banks.