Competition is heating up in the robo-advice market as account openings surge and new players enter the space.
In turn, some robo-advisers are going beyond friendly competitor banter and heading into full-fledged allegations of corporate espionage. In fact, Wealthfront Senior Director of Product Daniel Slate called out fellow robo-adviser M1 Finance publicly, via Twitter, alleging that one of its employees snooped in on a customer research session where future products were being discussed with clients.
Wealthfront is claiming that M1 employees have twice lied about their employer in order to get information on Wealthfront products and listen in on direct feedback from clients, according to Wealthfront spokeswoman Kate Wauck.
“The most recent episode involved an M1 employee lying about their employer to get into a customer research session where we discussed our future product roadmap to get feedback from clients,” Wauck wrote in an email. “Our senior director of product was understandably frustrated.”
In response, Slate aired out his frustration to his 962 followers through his personal Twitter account writing on Jan. 13: "I'm blown away that M1 Finance would be so unethical as to have an employee lie to access customer research sessions for a competitor."
In turn, some Twitter users and Wealthfront customers used the tweet to express their own frustrations with the Wealthfront platform.
In response to Slate’s tweets, M1’s Chief Marketing Officer Bob Armour stated: “Wealthfront's assertion is a gross misrepresentation and lie,” he wrote in an email.
“An M1 employee has an account with Wealthfront,” he wrote. “Wealthfront proactively invited her to attend a product discussion. She accepted and attended. Due to SEC KYC regulations, Wealthfront knew she worked at M1 because she listed it as such on her Wealthfront brokerage account. During the call, they asked her what other platforms she uses. She said M1, and the conversation from that point on was primarily about M1 features. At no point did she lie. In fact, the only lie is Wealthfront's tweet.”
Additionally, M1 said it does not look to Wealthfront for product information and does not consider the independent robo-adviser a competitor.
"Our focus is on fixing what's broken at market dominant legacy brokers, not robo-advisers," he wrote. "Regardless, we've built an investing experience that is far superior to Wealthfront's offering — in much less time with about one tenth of the amount of venture capital."
The Twitter feud comes as Wealthfront, founded in 2011, continues to expand its product offerings as a financial hub that can serve all of its clients’ cash management needs on a single platform. In June, the robo-adviser announced new cash accounts that come with routing numbers and debit cards.
Founded in 2015, M1 Finance has since grown its administered assets to $3 billion, according to company announcements.
Go deeper on technology at fintechforadvisers.com.
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