Wealthfront, a startup intent on replacing financial advisors with its wealth management software, just raised $20 million from some more Silicon Valley biggies, including Reid Hoffman, the co-founder and executive chairman of LinkedIn. That’s on top of the $10.5 million raised to start the company from venture capital investors including Netscape founder Marc Andreessen and Jeff Jordan, former president of PayPal.
I wrote about Wealthfront in December 2011, and said it could be a serious contender because of the smart people involved, and this new round of funding tells us that the company is not going away. In fact, since I wrote about the company, it’s added a tax loss harvesting app and broadened its available asset classes for creating diversified portfolios.
TechCrunch, which reported on the new round of funding earlier today, says Wealthfront is growing its user based 20% a month. Its chief investment officer is Prof. Burton Malkiel of Princeton University and its CEO is Andy Rachleff, who teaches entrepreneurship at Standard University’s Graduate School of Business.
Wealthfront’s software based financial advisor service charges an annualized fee of 0.25% on a client’s assets under management, and there is no fee charged for the first $25,000 of AUM, according to its Form ADV Part 2