ZURICH, Jan 26 (Reuters) - Swiss bank UBS has agreed to buy U.S.-focused automated wealth management provider Wealthfront, which has more than $27 billion in assets under management, in an all-cash deal the two companies said was worth $1.4 billion.
Wealthfront was founded by Benchmark co-founder Andy Rachleff and Dan Carroll in 2008 as kaChing, a mutual fund analysis company, before pivoting into wealth management.
- Assets under management: 25 billion USD
- CEO: Andy Rachleff (Oct 31, 2016–)
- Founder: Andy Rachleff
- Founded: 2008, Palo Alto, CA
- https://www.wealthfront.com/
With over $27 billion in assets under management and more than 470,000 clients in the US, Wealthfront's award-winning, state-of-the-art platform helps clients easily manage their wealth by providing access to financial planning capabilities, banking services and investment management solutions. Following the transaction, Wealthfront and its clients will benefit from access to UBS's leading wealth management capabilities, including the UBS Chief Investment Office's best-in-class thought leadership, an unrivaled global footprint, and deep products and services shelf.
"Adding Wealthfront's capabilities and client base to our global investment ecosystem will significantly boost our ability to grow our business in the US," said Ralph Hamers, Group Chief Executive Officer of UBS. "Wealthfront complements our core business in the US providing wealth management to high net worth and ultra high net worth investors through trusted relationships with financial advisors, and will enhance our long-term ambition to deliver a scalable, digital-led wealth management solution to affluent investors."
Wealthfront's primary focus is on millennial and Gen Z investors, a client segment with significant domestic growth potential. With more than 130 million investors in the US alone, millennials and the Gen Z population together comprise a high growth segment that will own an increasing share of the world's wealth. As UBS looks to establish and grow relationships with additional affluent clients, Wealthfront's capabilities will become the foundation of its new digital offering which will also include access to remote human advice. In addition, Wealthfront will expand UBS's existing offering through the firm's Wealth Advice Center, which focuses on serving core affluent clients, and its Workplace Wealth Solutions business, which works with employees of corporate clients on equity plan participation, financial education and retirement programs.
"Partnering with UBS will allow Wealthfront to offer our clients additional value-added services and best in class research that will help accelerate our vision to make growing wealth delightfully easy," said David Fortunato, Chief Executive Officer of Wealthfront. "We couldn't be more excited to have found a strategic partner who has the same view on the power of technology as we do. We look forward to providing our service to even more millennial and Gen Z investors."
Wealthfront's existing clients will see no immediate change to their experience and can look forward to benefiting from UBS's breadth of products, services, and intellectual capital. Clients will continue to have access to automated investing and personalized financial planning, which provides the ability to link and view outside accounts to better tailor services to each individual client. In addition to investing services, clients will also continue to have access to Wealthfront's banking services, including securities backed loans, instant transfers to investment accounts, direct deposit, bill pay, and transfer services.
Wealthfront will become a wholly owned subsidiary of UBS and will operate as a business within UBS Global Wealth Management Americas. The transaction is currently expected to close in the second half of 2022, subject to closing conditions including regulatory approvals.
UBS Investment Bank is serving as financial advisor to UBS and Sullivan & Cromwell is acting as legal counsel. Qatalyst Partners is serving as Wealthfront's exclusive financial advisor and Fenwick & West is acting as legal counsel.
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