UBS, Wealthfront Cancel $1.4B Deal

When the deal was announced on Jan. 26, Wealthfront had some $27 billion in assets under management and over 470,000 clients in the U.S. 

In his analysis earlier this year, Nexus Strategist President and CEO Tim Welsh concluded that the average level of assets per client account was about $57,000. “Wealthfront’s pricing schedule of 25 basis points (the first $10,000 being ‘free’) means that UBS is paying $3,000 for just $117 of annual recurring revenue (ARR), which is problematic when looked at on an ROI basis,” he explained in a column for ThinkAdvisor.

Late Friday, Wealthfront CEO David Fortunato said in a statement: “Today we announced that together with UBS we decided to terminate our pending acquisition and will instead remain an independent company.”

“I am incredibly excited about Wealthfront’s path forward as an independent company and am proud to share that thanks to the hard work of our team and the trust you put in us, we will be cash flow positive and EBITDA profitable in the next few months,” Fortunato explained.

The news about the cancelled Wealthfront deal comes four years after UBS shut down SmartWealth, a digital wealth management platform. In August 2018, UBS sold the technology to robo-advisor SigFig, which the Swiss-based bank had invested in two years earlier.

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