As the Dow plunged 1,600 points during intraday trading Monday, millions of investors rushed to check on their portfolios to survey the damage from one of the worst selloffs since the financial crisis.
But customers of roboadviser firms Betterment and WealthFront were furious to find that both companies’ servers crashed during today’s stock-market route, locking thousands of customers out of their portfolios.
As Bankinnovation pointed out, Betterment and other roboadvisers automate most of their functions, which is why they’re so much cheaper than hiring a traditional, human financial advisers. But the downside to this is that these services, which have soared in popularity over the past five years, don’t have much experience with market routes like what happened today.
The glitches could set the industry’s progress back – a welcome relief for their human rivals, per Bloomberg.
One Betterment customer complained that the company was costing him money…
— Joel Craig (@joel_craig) February 5, 2018
…while WealthFront promised to fix the problem ASAP…
— Joseph Nelson (@josephofiowa) February 5, 2018
…Other customers threatened to take their business elsewhere…
@Betterment Still can’t login. This is the second time I’ve wanted to buy at a discount and you’ve prevented that. I’m taking my business elsewhere.
— Stillman Brown (@stillman_brown) February 5, 2018
Wealthfront acknowledged in a statement that its clients lost access to their accounts for “a short period of time today” and said it’s working to make sure “clients don’t experience this again.” Betterment has yet to issue a statement. According to Bloomberg, back during the Brexit fallout in 2016, Betterment told users that it had implemented a “short delay in trading” to protect its users from a “potentially erratic market.” No such statement was issued by the company in this case.