By Anna Irrera
NEW YORK (Reuters) - Wealthfront, one of the earliest and largest online investment management startups known as "robo-advisors," is launching a free automated service that will let employees of listed firms sell stocks in their companies.
The online wealth manager began extending the "Selling Plan" service to all its clients this month after initially developing a prototype for Twitter and Facebook workers, the company said in a blog post on Wednesday.
In the latest example of "fintech" firms targeting lucrative markets by using automation to be more efficient, it said it was a cheap and convenient tool for employees who would otherwise sell their shares using more costly stock administrators.
The attempt to diversify Wealthfront's offerings comes as growing competition from established players raises questions about the ability of independent robo-advisors to grow at a sufficient scale to reach profitability.
While robo-advice was initially developed by newcomers including Wealthfront and Betterment, longstanding firms such as Charles Schwab Corp, UBS AG [UBSAG.UL] and Vanguard have recently launched or are planning similar services.
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The company wrote that it had received requests for the plan from workers at 300 public companies.
Wealthfront said the service would save employees time and money and that it would particularly appeal to workers at tech firms, which often offer employees stock as part of compensation packages.
The service sells the stocks automatically over an extended period of time and lets clients reinvest the proceeds into a diversified portfolio, or set the cash aside.
It will help grow Wealthfront's revenue stream, the company said, since proceeds from sales would be held in a client's Wealthfront account. Robo-advisors such as Wealthfront typically charge fees on assets under management.
(Reporting by Anna Irrera; Editing by Daniel Wallis)