Building Wealth(Tech)
Lessons From Wealthfront, Betterment, and Robinhood On Creating Great Investment Solutions
Wealthtech, short for wealth management technology, is a subset of fintech solutions that help individuals and businesses to save, invest, and manage their money better. Traditionally, wealth management services were reserved for wealthy investors. However, wealthtech solutions have made these services drastically more accessible, allowing more people to invest and build long-term wealth. Startups such as Wealthfront, Betterment, and Robinhood have built successful solutions for modern investors. They have made sophisticated financial tools accessible to everyone, not just a privileged few. These companies have deeply understood people's frustrations with traditional finance. We can learn a lot from them about building valuable wealth management solutions.
What Are Wealthtech Products
These platforms give users the tools to reach and exceed their financial goals.
Wealthtech products give people greater control and clarity over their financial lives. They help users buy and sell different financial assets (stocks, bonds, ETFs, etc.). They use sophisticated algorithms to build and manage personalized investment portfolios tailored to user’s financial goals and risk tolerance. Wealthtech platforms offer a broad selection of services beyond investing, all designed to help users meet their unique wealth management needs.
Services Offered By Wealthtech Products:
Automated Investing (or Robo-Advisors): Helping users create and manage customized portfolios. These solutions automatically monitor, allocate, and optimize assets across the user’s portfolio.
Stock Investing: Helping users directly invest in individual company stocks. These solutions make stock investing accessible and straightforward by lowering investment minimums and simplifying stock research.
Portfolio Management: Helping users strategically construct, monitor, and manage their investment portfolios. These solutions ensure diversification across asset classes, optimizing portfolio returns even when markets are volatile.
Savings: Helping users store cash in high-yield savings accounts that provide competitive returns compared to traditional bank savings accounts. These solutions allow users to maximize cash growth and maintain easy access to funds.
Borrowing: Helping users access lines of credit, using their portfolio as collateral, to avoid liquidating investments. These solutions offer users a convenient way to access additional cash without compromising their investment positions.
Financial Planning: Helping users get a comprehensive overview of their finances, including budgeting, saving, investing, and debt management. These solutions help users make informed decisions to optimize their financial health.
Retirement Planning: Helping users estimate retirement expenses and make sustainable, long-term financial investments. These solutions ensure that users can meet their retirement goals, despite life changes and market fluctuations.
Tax Optimization: Helping users minimize their tax liability through personalized tax strategies. These solutions maximize tax savings and tax returns, helping users retain more of their investment earnings.
Successful Wealthtech Companies
Wealthfront
Founded in 2008 by Andy Rachleff and Dan Carroll, Wealthfront is a financial management platform. Wealthfront’s founders were frustrated by the lack of affordable, high-quality investment options. They knew that software automation could provide much-needed innovation to the wealth management industry. The Wealthfront team focuses on automating and optimizing their users’ entire financial lives so they don’t have to rely on human financial advisors.
Betterment
Founded in 2008 by Jon Stein and Eli Broverman, Betterment is a digital wealth management platform. Betterment’s founders were frustrated with an industry that often prioritized its own profits over customer interests. Motivated to build a better way, they designed an easy-to-use platform that combined a clean user interface with sophisticated back-end financial mechanics. The Betterment team focuses on creating a streamlined, user-centric solution for individual investors.
Robinhood
Founded in 2013 by Baiju Bhatt and Vladimir Tenev, Robinhood is a mobile-first, commission-free brokerage platform. Robinhood’s founders were frustrated with the inequities in the financial system. They wanted to democratize access to financial markets, so they envisioned a mobile app that would simplify investing for everyone. The Robinhood team focuses on making investing accessible to younger, tech-savvy users who have historically been underserved by traditional brokerage firms.
Tactics For Building Wealthtech Products
Focus On Core Financial Problems
Identify the financial challenges that matter the most to users.
Wealthtech companies must identify recurring moments of financial frustration, due to poor returns, lack of financial control, hidden fees, etc. Teams must address sources of financial stress in daily life. Only ideas that create strong emotional reactions are worth pursuing. So, teams must experiment to uncover strong buying or usage signals. This reduces uncertainty around what customers want and what needs to be built. For example, Wealthfront’s customer research process aims to uncover points of customer desperation —things that make customers say “I need this now”— so they build solutions customers really want.
Validate Customer Demand
Decide what to build based on strong evidence, not guesswork.
Wealthtech companies often fall into the trap of targeting a broad spectrum of users because financial products can seem universally appealing. However, treating every user the same dilutes the value proposition, leading to generic features that don't deeply resonate with anyone. It’s important to find evidence of strong customer demand before committing resources. A disciplined experimental approach ensures product decisions are based on evidence, not guesses. For example, Wealthfront uses a customer-centric experimentation process — observing, questioning, hypothesizing, testing, and iterating —to keep product teams aligned with customers’ evolving needs.
Choose The Right Market
Target a specific, underserved customer segment.
In wealthtech, trying to be everything to everyone leads to complex, bloated products that don't deeply satisfy anyone. It’s often more effective to choose a narrow, underserved audience and design solutions for their specific needs, behaviors, and aspirations. This creates strong early traction. Future expansion can come later, but initial success is built by winning a clear, specific market first. Robinhood did not compete with traditional brokerage firms for the same wealthy, older customers. Instead, they built an experience designed entirely for young, first-time investors who had been largely ignored by these firms.
Design Mobile First Experiences
Empower users to manage all their finances on mobile.
Mobile access isn’t just a convenience for younger generations—it’s their default mode of interacting with the world. They want the ability to manage their finances directly through their phones. Users now expect not just access, but full functionality directly on mobile. Building mobile-first helps product teams focus on creating cleaner, faster, and more accessible experiences. For example, Robinhood launched with only a mobile app because they understood consumer preferences. They designed an app that provided end-to-end investment capabilities, through an interface that was much simpler than those offered by other brokerage providers.
Find The Right Revenue Model
Align the revenue model with customer needs.
In wealthtech, rethinking pricing models is often essential to break into competitive spaces. The “freemium” model works particularly because subscription tiers help limit service offerings based on user needs. New users can get started at little to no cost easily without being overwhelmed, while more sophisticated users can access advanced capabilities at a price. A strategic revenue model that directly addresses friction (high fees, investment minimums, etc.) attracts users who might otherwise stay on the sidelines. For example, Robinhood famously removed trading commissions, offering $0 trading fees, which was a major break from traditional brokerage revenue models. This radical shift attracted cost-sensitive young investors.
Help Users Discover The Benefits
Teach users how to effectively use financial tools.
Wealthtech companies must help users engage with financial tools. User education and guidance are critical because people often lack investing and financial planning expertise. They need help understanding investment choices, fees, and risks. Educational content helps close the knowledge gap that prevents people from taking the first steps into investing. It makes users 131% more likely to purchase from a finance brand. Education builds competence, and competence builds commitment. For example, Robinhood makes extensive educational content to teach users how to invest, how the stock market works, and how to make better financial decisions.
Design Effective Customer Support Mechanisms
Use support automation to help users find the answers they need.
Financial services are complex. Users inevitably have questions. Most younger users actively use automated support tools (chat support, guided navigation, etc.) because they don't want to contact someone whenever they need help. Support interfaces must be designed to instantly answer simple questions while escalating more complex ones to human experts. This is especially helpful during periods of economic volatility when inquiries surge. For example, Betterment integrates self-support tools within their product to minimize reliance on human support.
Recognize The Need For Human Reassurance
Ensure users have access to human customer support when necessary.
Some financial problems cannot be resolved using support tools alone. Sometimes talking to a real person can greatly reduce concern, confusion, and anxiety. Therefore, wealthtech product teams should understand where to make human support available. They must strategically embed access to human experts at critical points. Purely self-service models can leave customers feeling abandoned at moments when reassurance is needed most. For example, Betterment’s interface incorporates features that provide easy access to customer support experts. This ensures users can get in touch with a real person, for issue resolution or guidance, where and when necessary.
Be Prepared For Scaling Challenges
Understand how technology infrastructure must evolve with scale.
Wealthtech products often struggle with scaling because they are not equipped to deal with the backend demands of adding new users. Financial processes are complex. Each user interaction can trigger multiple backend processes (transactions, reporting obligations, statement generation, etc.). If the systems are not designed to handle spikes in demand, performance issues, bugs, and even critical failures might happen. Therefore, product teams must ensure their systems can continue to deliver financial services even as users and usage increase. For example, Betterment invested in building scalable, memory-efficient systems to deal with performance bottlenecks. This helped them handle not just more users but more operations per user over time.
Conclusion
Great wealthtech solutions come from a deep understanding of people’s financial journeys.
People and businesses want better ways to manage and grow their money. Traditional financial processes cannot meet the modern demand for speed, simplicity, and ease of use. Despite the clear need for innovative financial products, customer loyalty is hard-won but easily lost. Money is highly personal. If users are unsatisfied, they won't hesitate to leave, or even discourage others from joining. Trust is earned by addressing user anxieties, solving real problems, and delivering consistent, reliable service. The startups that succeed in the wealthtech space will be those relentlessly focused on the human element behind financial decisions. Building great financial products requires more than innovation. It requires a commitment to serving users better than the incumbents ever could.