Why has the average assets under management per user on Wealthfront decreased by 8% this quarter?

Introduction

The 8% decrease in average assets under management (AUM) per user on Wealthfront this quarter is a concerning trend that requires thorough investigation. As we delve into this issue, we'll systematically analyze potential causes, gather relevant data, and develop actionable solutions to address the root cause and prevent future occurrences.

Step 1

Clarifying Questions (3 minutes)

• Considering the timing, I'm wondering if there have been any significant market fluctuations recently. Have we seen any major market events or economic shifts that could have impacted our users' portfolios?

Why it matters: Market conditions can significantly affect AUM and user behavior. Expected answer: Information about recent market trends or economic events. Impact on approach: If market-wide issues are identified, we'll need to differentiate between external factors and internal issues.

• Looking at user segments, I'm curious about the distribution of this decrease. Is the 8% decrease uniform across all user segments, or are certain groups more affected?

Why it matters: Identifying specific affected segments can help pinpoint the root cause. Expected answer: Breakdown of AUM changes across different user segments. Impact on approach: If certain segments are disproportionately affected, we'll focus our investigation on those groups.

• Considering recent product changes, have we implemented any new features or made any significant updates to the platform in the past quarter?

Why it matters: Recent changes could have unintended consequences on user behavior or AUM. Expected answer: Information about recent product updates or feature releases. Impact on approach: If there have been recent changes, we'll investigate their potential impact on AUM.

• Regarding our measurement systems, has there been any change in how we calculate or track AUM per user? Are we confident in the accuracy of our data collection and reporting systems?

Why it matters: Ensures we're working with accurate data and not chasing a non-existent problem. Expected answer: Confirmation of data accuracy and any recent changes in measurement. Impact on approach: If there are data discrepancies, we'll need to address those before proceeding with further analysis.