Company: WLTH
Filing Date: 2025-08-22
Form Type: DRS/A
Source: 0001628279-25-000564
Chunk: 10

Company: WEALTHFRONT CORP
Filing Date: 2025-08-22
Form: DRS/A
Chunk 10
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 for those firms. However, the need to serve these clients with high-touch business models makes it very difficult for them to create low-cost self-service financial products for digital natives because that could cannibalize their existing successful businesses. This is classically known as an “innovator’s dilemma.” For example, banks are heavily reliant on fees (e.g., overdraft fees, ATM fees, advisory fees) to economically justify their branch networks. Just as Blockbuster’s reliance on late fees and physical stores made it resistant to the simpler, more convenient, and lower-cost streaming model, traditional banks’ reliance on unpopular fees and branches makes them vulnerable to branchless, low-fee digital challengers.

#### Digital Natives Wealth Opportunity
We define digital natives as the generations born after 1980. This definition encompasses a wide range of the consumer population—approximately 190 million people in the United States, according to 2023 data from the U.S. Census Bureau. Digital natives are in the prime wealth accumulation phase of their lives, and are projected to be the wealthiest generation in history. Their wealth is projected to grow from $12 trillion in 2022 to $140 trillion by 2045. Similar to earlier generations, a majority of the wealth will be held by less than half of these generations—those who are likely to be higher earning knowledge workers and who are net savers focused on wealth accumulation.

We expect digital natives will primarily accumulate wealth through earnings growth as they advance in their careers. While the median household net worth in 2022 was approximately $39,000 for those under the age of 35, median household net worth was approximately $135,600 for those between the ages of 35 and 44, according to the Federal Reserve. Further, the median household net worth of 55 to 64 year olds—the age Millennials will be in 2045—was approximately $365,000 in 2022, demonstrating the wealth potential of digital natives. Tech-enabled platforms are best positioned to take advantage of this unprecedented growth trajectory.

#### Our Opportunity
Digital Natives Are in the Wealth Accumulation Phase of Their Lives

By targeting digital-native generations, we have the opportunity to serve a large market that represented $16 trillion in 2024, or approximately 10% of the U.S. household wealth according to the Federal Reserve. According to the Federal Reserve, the share of household wealth held by the top 20% of earners in a generation has steadily increased from approximately 60% in 1989 to consistently