The obvious answer is that most of that money is "new money" from people who have not purchased investment advice in the past. This, of course, makes sense; people who might not be inclined to pay 1% of their assets, or who can't meet a $500,000 minimum, or who aren't comfortable in a delegator role, are going to see Wealthfront as a less expensive alternative where they have more control over their portfolio management. This suggests that many thousands of people are getting their first taste of professionally-managed portfolios. They're in the early stages of becoming potential advisory clients.
One can safely speculate about the outcome. As non-wealthy customers accumulate more assets, they will inevitably start asking questions that an online service provider can't answer, related to planned giving and estate planning, IRA rollovers, Roth conversions and, most basically, whether they can afford to retire or switch careers to something less demanding and stressful. At that point, they may be inclined to ask a professional (human) advisor for guidance, leading to a larger pool of prospective clients in the future.
The online investment services are not unaware of this potential for clients to migrate from a non-sticky low-advice model to comprehensive planning firms. Personal Capital and LearnVest already incorporate financial advisory services. At different ends of the cost spectrum, Edelman Financial and Vanguard's online platform were both built with on-call advisors in the loop. Others will follow suit. "We intend to add financial planning tools in Version 2 or 3, so we can link financial plans to the portfolios and create an end-to-end solution," says Steve Lockshin, founder of B+ Institutional Services, which is the distributor of Betterment Institutional to the advisor community.