Technology

Wealthfront has launched a lending product

Automated financial investment and advisory service provider Wealthfront is now getting into the lending business.

It seems like a good way for the company to juice revenues through interest payments rather than a fee-based model which would require going head-to-head with the growing number of asset managers that are now offering mixed automated investment and human advisory services.

Right now Wealthfront manages your first $10,000 for free and customers pay 0.25% on amounts above $10,000.

To be clear, Wealthfront isn’t offering an unsecured lending product. Basically folks are borrowing against the balance in their Wealthfront accounts.

As founder president and chief executive Andy Rachleff notes in a blog post about the new product:

Portfolio Line of Credit establishes a line of credit of up to 30% of your account value for Wealthfront clients with at least $100,000 invested in an individual or joint investment account. The best part? We do this instantly and without the hassle of paperwork — you’re already approved when you open your account! It takes 30 seconds to sign up, and in many cases you get your money in 24 hours.

The idea, according to a Wealthfront, is to get customers cash for buying a home, a car down payment, or paying for a wedding.

It’s the fourth feature that Wealthfront has launched since Rachleff returned to the company in November 2016… and those features have accompanied a groundswell of new customers coming on board.

The company has seen assets rise by $1.2 billion since January, according to a spokesperson.To put that in perspective, the company took two-and-a-half years to reach its first $1 billion.

Wealthfront now counts nearly $6 billion in assets under management from 120,000 customers.