SAN JOSE, Calif. -- Silicon Valley, birthplace of personal finance and investment heavyweights like Intuit, Financial Engines and Mint, is percolating with new startups that help people manage their money and portfolios online.
Wealthfront, a low-fee online financial adviser service in Palo Alto, is targeting 25- to 35-year-olds who will soon be looking for a place to put their money from the many public stock offerings expected from tech startups this year.
Andy Rachleff, president and chief executive officer of Wealthfront, says he expects people to open $10,000 or $20,000 accounts to start, putting more money in as they liquidate their IPO holdings.
"We're signing up a lot of people who are working at companies who are about to or recently have gone public," said Rachleff, who co-founded Benchmark Capital and who lectures in entrepreneurship at Stanford University.
Another service, Jemstep, is a free online investment adviser based in Los Altos that launched in October. It's mainly for people who don't want to move their money out of their brokerage, but who want an independent opinion about the quality of the funds they are in.
Jemstep recommends top performers from more than 20,000 mutual and exchange-traded funds using a patented ranking engine that provides "objective and unbiased" analysis, said Simon Roy, Jemstep's executive vice president.
Provide a few details about yourself, and it downloads your portfolio from your broker, analyzes your investments and recommends better-performing ones in the same class. It will rank and rate your current holdings in 401(k)s and 529 college funds, but as yet won't automatically give recommendations limited to the funds available in those accounts.
Wealthfront launched its online service in December, betting that young engineers and tech workers will prefer a transparent online experience that costs less to the care and handling of a personal financial adviser.
"We know the technical community around here typically doesn't trust financial advisers because of their fees and lack of transparency," said Rachleff.
Wealthfront offers an uncomplicated online front end to the massive software and data streams major brokerages use to make investment decisions for clients.
After users fill out an online form that determines their risk tolerance, Wealthfront produces a portfolio of exchange-traded funds, ranging from bonds to stocks and real estate investment trusts. Second and third choices are also displayed.
