Robo Advisors Gain New, Younger Clients Amid Market Turmoil
(Bloomberg) — TD Ameritrade Holding Corp., Betterment LLC and Wealthfront Corp. are among robo advisers attracting new clients as younger investors see a buying opportunity amid market upheaval.
Automated accounts are generally cheaper because they use computer algorithms rather than human money managers. They’ve been especially attractive to younger investors, who have time to grow their savings before retirement. Wealthfront said its average customer age is 32. Betterment’s is 37.
“Because so many people are talking about the market, more people are thinking about it,” Betterment Chief Executive Officer Jon Stein said in an interview. “Our customers do have a longer time horizon than, say, the average investor — most are investing for retirement, which is a long time from now — 20 to 30 years.”
Charles Schwab Corp. also saw increases over the first quarter of 2019. March was one of the San Francisco-based firm’s strongest months for account growth, spokeswoman Marianne Ahlmann said.
The boost in accounts has helped compensate for withdrawals by clients who need cash as much of the economy is locked down by the coronavirus pandemic. At Social Finance Inc., liquidations about double the normal rate have been more than offset by increases in new accounts, according to Gene Kim, a product communications manager.