Governance, Risk & Compliance

Governance, Risk & Compliance

December 01, 2011

Wealthfront Debuts Technology for Financial Risk Assessment...Far Off Wall Street

Have you ever sold a company or your shares in a company and netted seven, eight figures or more?

No, neither have most of us. But if you've sold a small business or your shares in a company and the amount of money you gained was more modest, you may have had need of a financial adviser whose services are tailored to you, because chances are, you just weren't worth the while of big investment banks like Goldman Sachs or Citibank.

But you may have a new choice: GigaOm is today profiling Wealthfront, a Palo Alto (News - Alert), California-based company (formerly called Kaching) that is providing tech employees with a set of easy tools to manage their finances.

Designed for more ordinary folks who might make a sizable pile of cash when their companies go public or are sold to larger companies, though who aren't up into the ranks of the big Wall Street firms, Wealthfront can help those looking for better ways to manage their money. Says GigaOm, “That includes engineers, product managers, designers — folks who are not senior management, founders or c-suite residents. They may not have millions, but they need financial adviser services.”

Wealthfront uses technology in the form of proprietary algorithms to help you assess your risk profile. It then asks you a series of questions to learn more about your investing preferences, and makes suggestions based on risk and the type of investor you are. The company says its services are based on something called “Modern Portfolio Theory.”

“Our advanced risk assessment algorithms mean you get a precisely allocated plan custom built for you, and our intuitive investment dashboard makes it simple to track your investments,” touts the company's Web site.

The company was founded when Wealthfront President and CEO, Andy Rachleff, a former general partner at Benchmark Capital, began hearing from employees at the likes of Google (News - Alert) and Facebook about the difficulties of dealing with large-scale financial advisers.

Tracey Schelmetic is a contributing editor for TMCnet. To read more of Tracey's articles, please visit her columnist page.

Edited by Jennifer Russell

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