Wealthfront deal with 49ers is a big marketing score

Deal with the NFL franchise enhances the cachet of the fast-growing online advice upstart.
SEP 17, 2014
Wealthfront has built a niche catering to young technology workers often perceived as beyond the reach of financial advisers. Now the online investment management platform is branching out to another group of young workers — professional football players. Wealthfront chief executive Adam Nash announced a new deal with the San Francisco 49ers on Tuesday. He said the National Football League team will cover management fees for the first $100,000 invested by current employees and alumni as a human resources benefit. The firm's services are free for all accounts under $10,000, but above that amount they normally charge an annual rate of 0.25%. The deal is a coup for a firm that's gathered $1.3 billion mining relationships with young technology entrepreneurs in the San Francisco Bay Area. “Good for them [the 49ers] and good for Wealthfront,” said Steve Bono, a principal at Constellation Wealth Advisors, an advisory firm in Menlo Park, Calif., who also works as volunteer for the 49ers. “It's good marketing for them, it's Silicon Valley and it's the young entrepreneurs who Wealthfront's been chasing.” The 49ers recently relocated to Levi's Stadium in Silicon Valley and this week is playing a preseason game. A narrow loss in the NFC championship game last season took it out of contention for the Super Bowl. The team did not respond to a request for comment. Mr. Nash, a former LinkedIn and eBay executive, and his colleagues have offered seminars and online advice for employees of companies like Facebook and Twitter. Their advice includes tips on how to manage newfound wealth, like windfalls from the initial public offering of a startup company. That's a message the firm says is also appealing to athletes, whose rough-and-tumble careers can end in financial devastation. In a 2009 article, Sports Illustrated reported 78% of pro football players are either bankrupt or in financial distress because of joblessness or divorce. Athletes have also, in some notable cases, been the target of alleged fraud by financial advisers and brokers. “Last year, when Wealthfront spread to all 50 states, we saw an interesting pattern develop: professional athletes signing up for the service,” Mr. Nash wrote. “As a result, we started looking into the specific financial challenges that face athletes and former athletes and how they navigate issues associated with windfalls.” But some believe athletes need more than online services to confront the range of temptations they face to spend freely or foolishly invest their money. “It's like giving someone a Lamborghini and then a gift certificate to an auto parts store,” said Pat Allen, a marketing consultant to the investment-management industry. “You could … but wouldn't it be a better idea to arrange for regular maintenance by a trained mechanic?” The relationship is also a great way to market Wealthfront's offering, according to Scott Hanson, founding principal of Hanson McClain, an investment advisory firm based in Sacramento, Calif. “It's got a lot of splash — it's kind of sexy, isn't it — it will help get the name out there,” said Mr. Hanson. “If it's good enough for the sports team, maybe it's good enough for the average person.” It wouldn't be the first use of celebrity spokesman for a brokerage looking to promote the value of financial advice. During the 2002 Super Bowl, a Charles Schwab & Co. advertisement included Hank Aaron, the Hall of Fame baseball player, encouraging San Francisco Giants slugger Barry Bonds to retire five years before he surpassed Mr. Aaron's career home-run recosd. “Want retirement advice from someone you can trust?” the narrator asked. “At Charles Schwab you'll get expert advice that's objective, uncomplicated and not driven by commission.”

Latest News

No succession plan? No worries. Just practice in place
No succession plan? No worries. Just practice in place

While industry statistics pointing to a succession crisis can cause alarm, advisor-owners should be free to consider a middle path between staying solo and catching the surging wave of M&A.

Research highlights growing need for personalized retirement solutions as investors age
Research highlights growing need for personalized retirement solutions as investors age

New joint research by T. Rowe Price, MIT, and Stanford University finds more diverse asset allocations among older participants.

Advisor moves: RIA Farther hails Q2 recruiting record, Raymond James nabs $300M team from Edward Jones
Advisor moves: RIA Farther hails Q2 recruiting record, Raymond James nabs $300M team from Edward Jones

With its asset pipeline bursting past $13 billion, Farther is looking to build more momentum with three new managing directors.

Insured Retirement Institute urges Labor Department to retain annuity safe harbor
Insured Retirement Institute urges Labor Department to retain annuity safe harbor

A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.

LPL Financial sticking to its guns with retaining 90% of Commonwealth's financial advisors
LPL Financial sticking to its guns with retaining 90% of Commonwealth's financial advisors

"We continue to feel confident about our ability to capture 90%," LPL CEO Rich Steinmeier told analysts during the firm's 2nd quarter earnings call.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.