Wealthfront announced on Monday that Adam Nash, the CEO since 2013, has stepped down and been replaced by Andy Rachleff, one of the co-founders of the wealth management platform.
Nash will remain at Wealthfront on the board of directors, but will no longer fill an operational role, according to a blog post published by Rachleff. In addition to his role as CEO and co-founder, Rachleff is president of the company.
Rachleff founded Wealthfront with Dan Carroll in 2011. He wrote that since Nash took over as CEO, “our client base grew over 60x, our assets over 45x and we became the top brand in the nascent industry of automated investment services.”
Wealthfront serves 73,700 clients, according to its most recent Form ADV, with $4.3 billion in assets under management.
Rachleff wrote that in 2014, he decided to step out of a hands-on role. “I was an investor after all, not a CEO,” he wrote.
However, he added, “What I didn’t realize at the time is that I’m no longer just an investor, board member or advisor. I am a founder.”
Rachleff wrote that his decision to return to the CEO role is based on his desire to be more involved with the company.
“While watching the company achieve this level of success, I realized that instead of spending less time with the company, I actually want to spend more. I want to be the one to lead us to deliver on the promise we laid out in March: to be the only financial advisor our clients will ever need, [emphasis his]” he wrote, referring to the release of Wealthfront 3.0 earlier this year, which uses artificial intelligence to deliver more personalized advice for users.
As the financial services industry has accepted the robo-advice platform as a way to enhance traditional service offerings rather than a direct threat, large companies have put out their own robo-offerings that are in turn threatening the robos.
An August report from CGI Wealth360 found that growth has leveled off for older robos that use simple algorithms to set investors’ asset allocation based on their risk tolerance, Melanie Waddell reported in the September issue of Investment Advisor.
Robo-advisor services are “being replaced by a broader trend, with financial advisors using computer programs to assist them in offering investment advice and overseeing client accounts,” according to the report.
Vanguard’s Personal Advisor Services unit managed $45.8 billion as of Sept. 30, Bloomberg reported, and Schwab Intelligent Portfolios, just launched in 2015, manages about $10.2 billion, according to earnings reports released in mid-October.
At the Schwab IMPACT conference in San Diego in October, CEO Walt Bettinger told attendees, “the idea that startup robos will take over the asset management industry can finally be laid to rest.” The pure robos, he said, will either evolve into business-to-business platforms “or dissolve,” and said the standalone robos are “all available for the right check,” ThinkAdvisor’s Jamie Green reported.