Robo-advisor Wealthfront is moving into lending, enabling customers to borrow against their investment accounts.
The Portfolio Line of Credit service lets Wealthfront clients with at least $100,000 invested through the firm borrow up to 30% of their account value.
"The best part? We do this instantly and without the hassle of paperwork — you’re already approved when you open your account! It takes 30 seconds to sign up, and in many cases you get your money in 24 hours," says CEO Andy Rachleff.
As well as being fast and hassle free, Wealthfront claims that its new service is cheap, with interest rates of between 3.25% and 4.5% - well below alternatives because the credit is secured against the borrower's own investments.
Lending is just the latest diversification move from Wealthfront, which has also recently rolled out a college saving plan and a service for selling stock options.
Says Rachleff: "We live in a world of “instant delivery,” from taxis to groceries to handymen. So why not add lines of credit to the mix? At Wealthfront we want our clients to be able to borrow what they need, when they need it, directly from their smartphones."