This Week in Startups E1002: Wealthfront CEO & Co-founder Andy Rachleff on hitting escape velocity at Wealthfront, pioneering “self-driving money” for consumers, shares insights on product-building in 1980’s vs. today, best investor attributes, & the future of NextGen banking
Nov 19, 2019
Andy Rachleff, Co-founder of Wealthfront and a seasoned investor, explores the evolution of next-gen banking services. He discusses 'self-driving money', enhancing transparency and efficiency in personal finance. Rachleff critiques traditional money management methods and highlights the shift in venture capital from technical risks to understanding market viability. He reflects on how Silicon Valley has changed and shares valuable insights on investor attributes, emphasizing the importance of learning from failures in the startup culture.
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Fiduciary vs. Broker
- Registered investment advisors must prioritize client interests, unlike brokers who only need suitability.
- Brokers can suggest okay funds, even with high fees and kickbacks, while fiduciaries must propose ideal funds.
Vanguard's Low Fees
- Vanguard charges minimal fees because it operates as a co-op, prioritizing client interests over profits.
- Profits are returned to investors as lower fees, similar to REI or mutual savings banks.
The Elder Statesman
- Andy Rachleff, in his 60s, feels the generational gap at Wealthfront, where the average employee age is around 28-30.
- Despite this, he finds working with younger colleagues and teaching at Stanford keeps him energized and current.