Wealthfront Launches ‘Spotify For Stocks’ Platform: What Investors Need To Know – Lucid Gr (NASDAQ:LCID), Apple (NASDAQ:AAPL)

this month, wealth front Start trading fractional shares with zero commission.

Wealthfront Equity Investment Accounts, which can be opened for as little as $1, offer clients a curated selection of equities to complete a branded savings, investment and lending suite.

For more information, Benzinga spoke with the VP of Product. Dave Myshevskystarted a career in Apple (NASDAQ:AAPL) as an engineer on the first iPhone.

Frustrated with the financial advisory space, Myszewski joined Wealthfront in 2016. Read his thoughts on why this launch is important for young investors keen to build wealth in today’s market.

BZ: What exactly were your frustrations with the financial advisory industry?

DM: A lot of things have led me to manage my money myself. Understanding why and how to manage your money is the hardest part, but actually doing it is a little easier. I was wondering why no company out there could provide a solution to my problem, and I stumbled across Wealthfront, which is investing heavily in technology.

What have you learned from your experience at Apple?

My first demo as an executive was a proud moment for me. This executive was complaining about a problem he had had for a very long time. Halfway through that demo, he still pointed out what was wrong. It was formative for me in that it pointed out the bad instead of the good. It held me to super high standards. Maintaining high standards is key to creating a great product experience.

What makes Wealthfront so special?

Wealthfront integrates investment and savings products to help young professionals build long-term wealth in all market conditions. The company was a pioneer in the robo industry and now has a high-yield cash account offering diversified investments and low-cost loans, as well as an APY of 4.05% and his FDIC insurance of $2 million.

Why did Wealthfront add stock investment accounts?

Most clients buy stock in companies they are interested in. Another observation we made prior to creating Wealthfront’s equity investment account is that we have a large amount of data showing that our clients hold approximately $40 billion in external brokerage accounts. Through Wealthfront, clients can put their money to better use. I thought it would add value. Therefore, this is not a trading platform. Rather, it’s about buy and hold, long-term investments.

What’s the experience like with this new feature?

At the top of the app you’ll see a stock ticker that you can swipe. You can search for specific stocks such as Tesla Inc. Also search (NASDAQ:TSLA) for price and performance, company description, and other data points. That said, we really want to help investors discover stocks they might not know about, or discover new ideas and strategies. I have a collection of inventory that presents for categories. If you’re very bullish who thinks electricity is the future, it offers options you might expect like Tesla and some startups that no one has heard of. Lucid Group Inc. (NASDAQ:LCID) and Rivian Automotive (NASDAQ:RIVN). That’s a really big selling point. We help you discover new ideas and participate in collections created by our investment research team.

What are some common problems for beginning investors?

Lack of guidance on how to make more informed strategic investment decisions. One of the problems we’ve seen is that many people want to buy one of his shares, but don’t know how to find a worthwhile additional investment. deal with this.In many respects, Wealthfront Stock Investing Spotify Technology SA(NYSE:SPOT) Discover feature for discovering new music. Since you like Tesla, we will also introduce you to other companies you may not be familiar with. For example, if you buy 1 share, your chance of losing money is about 10%. If you buy 5 shares, the probability of losing is less than 1%.

Are there many collections to choose from?

yes. If you want lower volatility and risk, which is what people are thinking more and more of now, we will do the research for you and help you make smarter choices. It also gives you the option to access markets such as crypto without having to. Dividend blue chip stocks are also popular right now. People want a company that pays solid, reliable dividends. They don’t want the hot growth stock they loved a year ago. But he doesn’t have to put all his money in one collection or stock. We hold fractional shares, so you can invest with only $1. You can also choose how those dollars are distributed. So if you want even weights or custom weights, it’s all up to you.

How do you create these packages or portfolios that people can invest in?

We assess what our clients are thinking and should be thinking, and create collections based on that. Our investment research team determines which stocks make sense as part of it based on a variety of factors.

Are the transactions immediate?

We limit trading activity. This is not for day traders. It’s really made for long-term investors. Our clients tend to invest in about 3 securities per month. They don’t really shop much. they buy and keep. As part of this, we are also not accepting payments for Order Flow or his PFOF. We make money based on money not invested in your cash account.

How does that execution work?

Aim to complete within 30 minutes. We are interested in speeding it up over time. Combine client orders into different batches and speed up as you scale.

Can you talk about protecting customer accounts in the event of volatility or failure?

Launched Wealthfront Cash with $1 million FDIC insurance by sweeping funds to partner banks. We’ve increased that to $2 million in the last six months or so and are looking to increase that to $3 million. Now it’s per account owner. $2 million in a personal account. $4 million in a joint account.

What are the different types of accounts that can be opened with Wealthfront?

The most popular accounts we have are taxable. There are also individual accounts, joint accounts and trust accounts. That is, an IRA that includes a SEP IRA. Using a taxable account gives you tax loss harvesting. We lost over $1.5 billion last year when the market dropped significantly. Looking at the pretty reasonable tax rate projections, our client is probably getting over $500 million in value from the work we did. What surprises people is that they can also reap losses along the way. It is estimated that over 96% of his clients get more value from tax harvesting than they paid in commission.

What is the approximate timeline for different types of product introductions?

Our advisory product was introduced in 2011. Wealthfront Cash was released in February 2019. Then, at the beginning of the month, stock investment accounts were introduced.

Where else can I add value?

We are pleased to offer Wealthfront Cash customers added value with interest rates in the range of 4-5%. we haven’t seen it in a while. We are trying to lay the groundwork for the major product categories our clients need. Sit where more risk is perceived.