Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company
The case describes how Wealthfront, a financial technology ("Fintech") start-up, aims to disrupt the financial advisory field with a novel approach-fully automated robot advisers. The core value introduced by Wealthfront is to drastically improve the delivery efficiency and effectiveness of financial advisory services. It is a classic example of process innovation, for which leading economists such as Joseph Schumpeter and many others have developed theoretical models and empirical studies. The instructor can extend the fundamental economic rationale to other phenomena such as driverless cars or robot reporters. From a practitioner's perspective, the instructor can stimulate discussion on how the recent wave of Fintech differs from previous financial innovations.1 The instructor can also ask students to examine how contextual factors such as early adopters and competitive dynamics separately or jointly influence company decision-making and outcomes. The instructor can connect this case to popular phrases such as "innovator's dilemma" and "crossing the chasm."