REDWOOD CITY, Calif., Oct. 3, 2018 /PRNewswire/ -- Today, Wealthfront released the 2018 Savings Report detailing the impact their automated advice engine, Path, has on their clients' savings patterns. In the last year, the company has observed that consistent engagement with Path correlates with a 28% increase in a client's savings rate. For a 32-year-old client with a $130,000 income and $100,000 in savings, this could mean an additional $1.25 million dollars at retirement.
"Automating financial advice leads people to better outcomes and we're thrilled to have such incredible data to back this assertion," said Andy Rachleff, CEO and co-founder of Wealthfront. "Our observations show technology is the solution needed to help people save more. We look forward to empowering more people to increase their savings."
The current financial system does not adequately encourage people to save enough. As of June 2018, the average savings rate in the United States was only 6.8%, which is well under half of what is required to comfortably meet short term financial goals and retire comfortably. Wealthfront believes making small improvements to the current system is like applying a band aid and the only way to impact change is to create something new, like its automated advice engine, Path.
"We're constantly amazed to see the industry try to improve a system that is inherently broken," said Dan Carroll, Wealthfront co-founder. "We're keeping our sights set on building a better system delivered solely through technology. We believe it's our best chance to see a positive impact and encourage people to save more."
Wealthfront's goal is to fully automate financial decisions to what some people have called, "self-driving money." Clients will be able to automatically deposit their paycheck into their Wealthfront account and the company will route their money appropriately based on the lifestyle and goals they've set. Bills will be automatically paid, emergency funds and 401(k)s will be topped off and Wealthfront will invest the rest in the most tax efficient way. To date the company offers a suite of automated financial planning, investment management and banking related services. To read the full report visit https://blog.wealthfront.com/2018-wealthfront-savings-report/ or to start saving and investing today download the app on iOS or Android.
Wealthfront Software LLC ("Wealthfront") has prepared this article solely for informational purposes only. Nothing in this material should be construed as tax advice, a solicitation or offer, or recommendation, to buy or sell any financial product. The information set forth herein has been obtained or derived from sources believed by Wealthfront to be reliable but it is not necessarily all-inclusive and is not guaranteed as to its accuracy and is not to be regarded as a representation or warranty, express or implied, as to the information's accuracy or completeness. Wealthfront offers a software-based financial advice engine, Path, which delivers automated financial planning tools to help users achieve better outcomes. Investment management services are provided by Wealthfront's affiliate, Wealthfront Advisers LLC, an SEC registered investment adviser, and brokerage related products are provided by Wealthfront Brokerage LLC, a member of FINRA/SIPC. Wealthfront, Wealthfront Advisers LLC and Wealthfront Brokerage LLC are wholly owned subsidiaries of Wealthfront Corporation.