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Wealthfront Investing
On Wealthfront's website
Insider’s Rating
4.34/5
Perks
Fund your first taxable investment account with at least $500 in the first 30 days of account opening and earn a $50 bonus.
Account Minimum
$1 ($500 for automated investing)
Fees
$0 for stock trades. 0.25% for automated investing (0.06% to 0.13% for fund fees)
Pros
- Low annual fee for investment accounts; crypto trust investments available
- Tax-loss harvesting, portfolio lines of credit, 529 college savings plans available
- Cash account
- Mobile app and investing and retirement tools
Cons
- You need at least $100,000 to utilize additional investment strategies
- No human advisor access
Insider’s Take
Wealthfront is one of the best robo-advisor options if you're in search of low-cost automated portfolio management, and one of the best socially responsible investing apps for features like tax-loss harvesting, US direct indexing, and crypto trusts.
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Product Details
- Consider it if: You're balancing several goals and want to streamline your finances.
- Promotion: Fund your first taxable investment account with at least $500 in the first 30 days of account opening and earn a $50 bonus.
About Wealthfront
Wealthfront is an automated investing platform offering multiple brokerage account options, including IRAs and 529 plans with curated portfolios designed by financial experts. Passive investors can trade ETFs, index funds, crypto trusts, portfolio lines of credit, and low-cost bond ETFs for low-risk investing.
Wealthfront's tax-loss harvesting effectiveness is one of its best features. Other notable features include auto-rebalancing, risk parity, US direct indexing, and smart beta tools. However, the online brokerage does require a $500 minimum, which is higher than some of the other top robo-advisors (such as SoFi Invest and Fidelity Go).
While it's great for socially responsible investing and hands-off investors who don't want to trade independently, Wealthfront is also a great platform for investors wanting more control over their portfolio's asset allocation. But it only has investment options for crypto trusts (not the coins or tokens themselves), and these trusts are not eligible for certain features like tax-loss harvesting.
Is Wealthfront Right For You?
Wealthfront is great for hands-off investors, retirement-focused individuals, and socially responsible investing. Although the robo-advisor is more expensive than similar automated platforms, it provides users with a strong selection of account tools and features, like tax-loss harvesting.
It's not a good choice for hands-on investors.
Wealthfront: Overall Rating
| Feature | Business Insider rating (out of 5) |
| Fees | 3.95 |
| Investment selection | 5.00 |
| Access | 4.90 |
| Ethics | 3.00 |
| Customer service | 4.00 |
| Overall rating | 4.17 |
Wealthfront Pros and Cons
| Pros | Cons |
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How trustworthy is Wealthfront?
The Better Business Bureau gives Wealthfront an F rating to reflect its opinion of how well the robo-advisor interacts with its customers. According to the BBB website, Wealthfront has an F because of multiple customer complaints against the company.
The BBB considers several factors when evaluating companies. These include licensing and government actions, bankruptcy, advertising issues, and more.
Wealthfront does not have any recent public controversies.
Ways to Invest With Wealthfront
Individual and Joint Brokerage Accounts
You can start investing with an individual brokerage account or another person for a joint brokerage account. And though its minimum deposit is higher than many other robo-advisors (such as Betterment, or Ellevest) you'll get access to automated financial planning with Wealthfront, in addition to other features:
- Tax-loss harvesting: Wealthfront replaces any securities that have suffered loss with this strategy and reinvests the funds into other assets that match your portfolio's target. You can then write off those losses on your tax return, lowering your tax bill. However, crypto trusts are not eligible for tax-loss harvesting.
- US direct indexing (formerly called stock-level tax-loss harvesting): Wealthfront says it works to harvest even more losses by searching for price changes within individual stocks in the US stock index. You'll need a minimum of $100,000 to use direct indexing.
- Risk parity: This approach uses an asset allocation strategy to boost your risk-adjusted returns. As with US direct indexing, you'll also need a minimum of $100,000 for this strategy.
- Smart beta: Wealthfront focuses on increasing your returns by strategically weighing your investment portfolio's assets. You'll need at least $500,000 in your account to use this feature.
Wealthfront allows for allocating crypto trusts of up to 10% of your portfolio to protect against risk and volatility. While its crypto offering is uncommon for robo-advisors, investors who want to focus solely on crypto should consider other platforms.
Retirement Savings Accounts
Wealthfront offers a suite of retirement savings account options like traditional IRAs, Roth IRAs, SEP IRAs, and Rollover IRAs. All Wealthfront retirement accounts are equipped with automated portfolio rebalancing to keep you on track to meet your goals while maximizing your returns.
Customized your IRA from hundreds of retirement fund options, including crypto trusts and tech stocks.
Socially Responsible Portfolios
Wealthfront's socially responsible option is best for investors with long-term goals and who want to make an impact with their money. These portfolios rely on Blackrock funds that track socially responsible indexes defined by MSCI. Depending on your risk tolerance, Wealthfront's robo-advisor will create a diverse portfolio of municipal bonds, US stocks, TIPS, foreign-developed stocks, emerging market stocks, and US bonds.
Stock Investing Account
You can design your own investment portfolio with the 100% self-managed Stock Investing Account, which is for advanced traders looking for DIY stock trading. With DIY stock trading, you can invest in fractional shares (not available for automated investing), dividend blue chip stock, and pre-built stock collections.
529 College Savings Plans
Like the best 529 plans, you can save toward higher education for dependents with Wealthfront's college savings account. The robo-advisor simplifies this process in three steps:
- Cost layout: This 529 plan account uses the Department of Education data to display how much your desired college will cost when your dependent is expected to start school. Wealthfront also says this projection accounts for inflation, including tuition, expenses, and how much financial aid may be available.
- Goal-setting: Wealthfront helps you set a monthly savings goal that aligns with your expected future education costs.
- Recommendations: If you have other goals beyond saving for education, Wealthfront will offer advice on how to work toward both while staying on track financially.
High-yield Bond Portfolio
Wealthfront's high-yield bond portfolio invests a personalized blend of low-cost bond ETFs. The account focuses on recommending valuable assets and maximizing after-tax earnings. The bond ETFs blend corporate bonds, floating-rate bonds, and tax-advantaged treasuries.
It pays a 5.50% yield, which is higher than Wealthfront's own cash account that pays 5.00% APY (Annual Percentage Yield). The 5.50% yield is the 30-day blended SEC yield after you pay any fees.
Investment Options
Wealthfront offers a large selection of investment options, including municipal bonds, US stock, TIPS, corporate bonds, dividend growth stocks, US bonds, foreign developed stocks, crypto trusts, bond ETFs, and emerging market stocks.
Wealthfront does offer crypto trading on a small selection of statuary crypto trusts, like Bitcoin and Ether. You can't invest in individual coins or tokens.
Wealthfront Fees
Wealthfront investment account minimums include a $500 minimum deposit requirement and an annual 0.25% account management fee. But if you want to dodge these fees, Wealthfront's stock investing account (which is not an automated account) only requires a $1 account minimum and doesn't charge a management fee or commissions.
With Wealthfront's 529 plan, you won't have to pay any federal taxes on withdrawals as long as they're for qualified education expenses. However, underlying fees (such as commissions and portfolio management) may increase to 0.46%.
Some account features require much higher account minimums. Both risk parity and US direct indexing require a minimum of $100,000, and smart beta requires at least $500,000 in your account.
How Wealthfront Compares
Wealthfront vs. Betterment
Wealthfront and Betterment have both been in business since 2008. Both primarily offer robo-advice and support for several account types, including individual and joint accounts, trusts, IRAs, and cash accounts.
One big difference to note is that Wealthfront offers more investment types. You can invest in ETFs, index funds, and crypto trusts (it currently offers the Grayscale Bitcoin Trust (GBTC) and the Grayscale Ethereum Trust (ETHE)). Betterment also offers ETFs, giving you direct exposure to cryptocurrencies by offering four crypto portfolios.
Wealthfront also offers DIY trading for stocks, but you'll need to open a separate stock investment account from the automated investing account.
Since you can invest in up to 23 different cryptocurrencies with some of its portfolios, Betterment is the stronger choice for crypto investors.
Betterment also has Wealthfront beat when it comes to financial advisor guidance. It offers ongoing Certified Financial Planner (CFP) access with its premium account, and digital plan users can even buy a one-time CFP consultation package if needed. Wealthfront doesn't offer advisor guidance.
Betterment review
Wealthfront vs. Vanguard
Wealthfront and Vanguard serve different purposes. Though it offers an ETF portfolio customization option, Wealthfront is mainly for hands-off investors who want a computer algorithm to manage their portfolios (unless you open a separate stock investment account). Vanguard, however, offers both a variety of self-directed brokerage accounts and automated accounts.
You'll need less money to set up an automated account with Wealthfront than you would with either of Vanguard's automated accounts; Vanguard Personal Advisor requires a $50,000 minimum, and Vanguard Personal Advisor Select requires a $500,000 minimum.
Vanguard could be the better choice for those who want to work one-on-one with financial advisors. Its Vanguard Personal Advisor Services account gives you access to automated investing and guidance from a Vanguard Fiduciary advisor.
Vanguard review
Wealthfront — Frequently Asked Questions (FAQs)
What investment services does Wealthfront offer?
Wealthfront mainly offers automated investment services for trading and managing, including personalized portfolio management, auto-rebalancing, and financial planning resources. Other investment services offered through Wealthfront are tax-loss harvesting, risk parity, US direct indexing, and smart beta portfolios. Users can also open a Stock Investment Account for DIY trading and increased control over their account.
How does Wealthfront's fee structure work?
Wealthfront is a transparent robo-advisor providing a cost-effective investment strategy for beginners and passive investors. It charges a 0.25% annual management fee with a $500 minimum investment requirement to get started. Wealthfront does not charge commissions, but it does charge an expense ratio on all ETFs.
Can Wealthfront's automated services replace a human financial advisor?
Wealthfront vs. traditional financial advisors provide ease-of-use and simplified trading on mobile and desktop. While Wealthfront's automated investment advice and portfolio management offers an accessible brokerage platform for beginners, it can't replace a human financial advisor for complex financial situations. Depending on your financial situation, you may need to seek a financial planner or expert for personalized advice.
Is Wealthfront suitable for beginners in investing?
Wealthfront is a suitable online brokerage for beginners in investing. Robo-advisors, such as Wealthfront, offer hands-off investment strategies ideal for beginners seeking low-cost ETF portfolios, simplified trading techniques, and education resources.
How secure is investing with Wealthfront?
Wealthfront is a secure investment platform equipped with features like active fraud monitoring, and two-factor authentication. Users also get up to $500,000 in SIPC insurance.
What are the cons of using Wealthfront?
The main con of Wealthfront is that its required $500 minimum deposit is higher than other free robo-advisors like SoFi Invest and Betterment Investing.
Methodology: How We Reviewed Wealthfront
We examined Wealthfront automated investing using Business Insider's rating methodology for investing platforms to compare and examine account types, pricing, investment options, and overall customer experience when reviewing investing platforms. Platforms are given a rating between 0 to 5.
Investment platforms usually offer multiple assets, trading tools, fees, and other resources. Some investing platforms are better for more advanced investors or active investors, while others may better suit beginner and passive investors. Wealthfront was evaluated with a focus on how it performs in each category.
Junior Investing Reporter
Tessa Campbell is a Junior Investing Reporter for Personal Finance Insider. She reports on investing-related topics like cryptocurrency, the stock market, and retirement savings accounts. She originally joined the PFI team as a Personal Finance Reviews Fellow in 2022.Her love of books, research, crochet, and coffee enriches her day-to-day life.
Rickie Houston was a senior wealth-building reporter for Business Insider, tasked with covering brokerage products, investment apps, online advisor services, cryptocurrency exchanges, and other wealth-building financial products.Before Insider, Rickie worked as a personal finance writer at SmartAsset, focusing on retirement, investing, taxes, and banking topics. He's contributed to stories published in the Boston Globe, and his work has also been featured in Yahoo News.He graduated from Boston University, where he contributed as a staff writer and sports editor for Boston University News Service.
Compliance Associate
Elias Shaya is a Compliance Associate on the Personal Finance Insider team based in New York City, whichensures content accuracy and editorial independence so readers are always getting up-to-date and objective financial advice.The team also works to minimize risk for partners by ensuring language is clear, precise, and fully compliant with regulatory and partner marketing guidelines that align with the editorial team. Elias is the point person for the loans sub-vertical and works with the editorial team to ensure that all rates and information for personal and student loans are up-to-date and accurate.He joined Insider in February 2022 as a fellow on the compliance team.
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