Robo-advisor Wealthfront originally came to market with a product to automate retirement savings, but over time has expanded to provide other financial tools. Today, the company is announcing a new product aimed at helping parents save for their children’s college education.
With Path, users are able to connect all of their bank, credit card, mortgage and other accounts and get a holistic view of their financial health. It was created to help users see where they’re money is going and find ways for them to save more toward retirement.
But, of course, Wealthfront recognizes that building a retirement nest egg is just one goal for its users. There are other major life events they have to prepare for, and college tuition is just one of them.
For users who have children — or want them — Path provides a way to easily set up and contribute to a cost-effective 529 investment account. Designed to provide tax advantages for college savings, 529 accounts provide tax-free withdrawals for tuition, books and other education-related expenses.
Path walks users through the process of setting up an account and projecting the future cost of college. Users can select schools they would like their progeny to attend, and the app provides an estimated breakdown of costs however many years in advance. It also calculates expected financial aid, based on a user’s income and finances. Once all that’s calculated, Path gets users to set up an automated savings plan to reach their goals.
While other robo-advisors are trying to provide a more high-touch experience by bringing on personal financial advisors, Wealthfront is doubling down on its plans to use software to automate its users finances. With retirement and college savings as part of its suite of products, we will likely see other tools and use cases arise from Wealthfront and its Path app.