Wealthfront Inc. said Thursday it had acquired hybrid robo-adviser Grove Advisors as it tries to bolster the development of technology that would automate clients' paychecks.
Terms of the deal were not disclosed.
Wealthfront's acquisition appears primarily focused on Grove's personnel, primarily members of its product and technology teams, which encompass roughly two dozen people. In addition, Chris Hutchins, co-founder and CEO of Grove, will be joining Wealthfront.
While Wealthfront, a robo-adviser, currently leverages technology to make recommendations to clients on saving and investing, it is working to develop technology that can manage a client's paycheck, automatically routing the money to everything from emergency funds, mortgage payments and other bills to retirement accounts and investments. Wealthfront expects to launch the service next year.
[Recommended video: Next gen advisers must be more diverse]
Meanwhile, Grove's financial planning team, which has around 10 people, and its financial planning clients will transition to Facet Wealth, a subscription-based financial planning service that launched three years ago.
Facet will absorb around 500 households as part of the arrangement — the entirety of Grove's book — since Wealthfront doesn't have a hybrid robo model like Grove. That swells Facet's current client base of 1,000 households by 50%.
"It made sense to bring their book on," said Anders Jones, CEO of Facet Wealth. "I think we share a very common mission, which is full planning for the mass-affluent market at a flat subscription-based price.
The two firms entered into a solicitation agreement as part of the deal, but Mr. Jones declined to give specifics.