After teaming up with RBC Capital Markets, Robo-advisor Wealthfront has launched Portfolio Line of Credit to enable customers to borrow against their investment accounts
Market leading Robo-advisor Wealthfront has announced that it has begun offering customers loans, using their portfolios as collateral. Portfolio Line of Credit establishes a line of credit of up to 30% of an account value for Wealthfront users with at least $100,000 invested in an individual or joint investment account.
Customers can access the line of credit instantly without needing to fill out any forms or paperwork, and loan money is granted in as little as 24 hours. In a company blog post on Wednesday, President & CEO, Andy Rachleff stated,
“We live in a world of “instant delivery,” from taxis to groceries to handymen. So why not add lines of credit to the mix? At Wealthfront we want our clients to be able to borrow what they need, when they need it, directly from their smartphones.”
The expansion into lending comes shortly after the company introduced a 529 college saving plan and a financial planning platform called Path. The new services are designed to help the company stand out from strong competitors such as Betterment, Accorns, Vanguard and Fidelity Investments and Charles Schwab.
“This is consistent with our strategy, which is to take basically every major service that a private wealth manager offers to wealthy clients and use software to offer it to some people who can’t afford the minimums,” Rachleff stated to Bloomberg News.
Wealthfront was founded in 2008 and is based in Redwood City, California. The company has grown from managing roughly $100 million in its first year, to now managing over $5 billion today. The new service is a margin lending product offered exclusively to Wealthfront clients by Wealthfront Brokerage Corporation, Wealthfront’s brokerage subsidiary.