Fees at Wealthfront are comparable to Betterment. Betterment clients are not placing risky trades, and there is no margin lending offered, so it’s unlikely that there would be a need for additional SIPC coverage. Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of robo-advisors. Wealthfront has a single plan, which assesses an annual advisory fee of 0.25% with a minimum of $500. That said, the biggest difference in features is the fact that Betterment offers you a human option (for a fee) while Wealthfront is digital-only beyond basic customer service. Betterment vs. Wealthfront. Wealthfront vs. Betterment: At a Glance Wealthfront is an online financial advisor based in California’s Silicon Valley. Ed is … ), Goldman Sachs Smart Beta portfolio that seeks to outperform the market, Income focused all-bond portfolio made up of BlackRock ETFs, “Flexible Portfolio” constructed from the standard portfolio’s asset classes but weighted according to user preferences. Betterment offers checkings and savings account with an annual APY of up to 2.38%. Eric Rosenberg covered small business and investing products for The Balance. In addition, Wealthfront requires a $500 minimum deposit to open a new account. For those who want human interaction, Betterment has a … Once you reach $500,000, you can join the more powerful Smart Beta product. Wealthfront charges the same 0.25% annual advisory fee that Betterment charges, but it also charges a fund fee of 0.07% to 0.16%, depending on the funds your money goes into. You’re shown the exact portfolio prior to funding your account, but you cannot customize the pre-set portfolio at all. Stock-level tax-loss harvesting is similar to a regular tax-loss harvesting strategy, but instead of investing only in broad market ETFs, Wealthfront algorithms invest directly in S&P 500 stocks. Wealthfront’s retirement planning takes Social Security projections into account. So although Betterment may be the go-to if you are cash-strapped when you are starting out, Wealthfront is ultimately the superior service in the long run. Based on fees and tax-loss harvesting options, each is better for a specific type of investor. If you have a portfolio of $100,000 or more, Wealthfront is the strongest offering by far. Previously available only as a manual exercise for wealthy investors, Betterment’s algorithms automatically buy and sell securities in your portfolio to capture tax losses, lowering the capital gains taxes you owe to the IRS. Get started. Wealthfront has a 529 college savings plan, while Betterment doesn't. Both Betterment and Wealthfront have an asset management fee of 0.25%. Once all of your financial accounts are entered, such as IRAs and 401(k)s, and any other investments you might have, like a Coinbase wallet, Wealthfront shows you a picture of your current situation and your progress towards retirement. Investopedia requires writers to use primary sources to support their work. We collected over 300 data points that weighed into our scoring system. Betterment’s explanation, and potentially the service, is more basic. Wealthfront vs Betterment: Wealthfront is an online investment service who is a pioneer in robo-investing that provide investors with a wide range of investment options. After several years in business, Wealthfront now has more than $12 billion in assets under management (AUM)., based in New York, now has over $3 billion under management. Betterment and Wealthfront both take pride in their security and offer two-factor verification. Clients will appreciate this automated reallocation because most investors don’t have the time or dedication to implement these techniques on their own. The checking account reimburses your ATM fees … They appeal to young and low-income investors because they offer lower fees and minimum investment requirements than hands-on advisors. 1. Before we dive into the various features and options that these apps have, let’s breakdown the basics first. After you fill out a risk profile, Wealthfront’s automated algorithms invest your money in a range of ETFs. Still, if your account has more than $500,000 in it, or if you hold more than $250,000 in cash in your Betterment Cash Reserve account, you might consider moving the excess to a firm with additional insurance. Accessed Sept. 5, 2020. While Betterment’s premium account has a $100,000 minimum, the standard option has no account minimums at all. Betterment offers five portfolio types based upon classic Modern Portfolio Theory (MPT) principles and/or specific investment themes: Betterment accounts are rebalanced dynamically when they deviate from their intended goal allocations. Otherwise, Wealthfront offers a more or less identical investing service to Betterment. Wealthfront and Betterment were very close across our rankings. Wealthfront. Similarly, Betterment and Wealthfront both offer a number of services like automatic rebalancing, tax-loss harvesting, and automatic deposits. You can also get help from financial planners at any time with a Premium account, but you’ll pay a fee of $199-$299 to consult a planner if you have a basic account. Our team of industry experts, led by Theresa W. Carey, conducted our reviews and developed this best-in-industry methodology for ranking robo-advisor platforms for investors at all levels. Betterment started the Robo-advisor revolution, but they also believe that having access to a human advisor can be a beneficial part of your investment experience. In general, Betterment is the best option for investors just starting out in that you don’t need much to get started and you can get human support at a still-low fee of 0.40%. You can also put some companies on a restricted list if you’d rather not invest in them. You can expect the same annual advisory fee of 0.25%, which is a competitive rate for online financial platforms. It can offset up to $3,000 per year of ordinary income and carries forward if you go over. Betterment: 0.25% – 0.40% annual fee; Wealthfront: 0.25% annual fee; Betterment offers two tiers of service. Features & Tools. Betterment is the best platform for the average investor. Wealthfront’s methodologies are laid out extensively, so a relatively experienced investor can have a high degree of comfort giving up the human option. Your asset allocation is displayed in a ring with equities in shades of green and fixed income in shades of blue. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Many of the robo-advisors also provided us with in-person demonstrations of their platforms. Thanks to its stock-level tax harvesting strategy, investors can get an edge over Betterment in the long-term. For 529 plans, you can expect to pay 0.42% to 0.46% annually. Otherwise, Wealthfront offers a more or less identical investing service to Betterment. Betterment and Wealthfront offer various services and products, including financial planning and savings accounts. However, Wealthfront offers a product that gives you even better tax results than you can get with Betterment’s tax-loss harvesting: stock-level tax-loss harvesting (formerly known as direct indexing). Wealthfront, by contrast, seems like the better choice for investors who don’t feel the need for human hand-holding. Here is what you need to know about how Betterment and Wealthfront manage your money. This is our review of Betterment vs. Wealthfront. Because they have similar offerings, it can be tough to decide which is right for you unless you take a look at some of their differentiating features. Betterment vs. Wealthfront Comparison Costs and Fees. Betterment doesn’t directly carry SIPC insurance, but trades are cleared through Apex Clearing, which has risk management tools in place. For the purposes of this review, we're focusing on their personal investment accounts. We also reference original research from other reputable publishers where appropriate. Wealthfront has comparable management fees of 0.25%. Betterment is also a similar online investment platform that offers goal based savings. However, you only gain access to stock-level tax-loss harvesting when your taxable investment balance reaches $100,000. Both firms have tight security on their web platforms, and offer two-factor authentication as well as biometric logins on their mobile apps. These two have a track record in the industry and pioneered many of the features that have become standard for robo-advisories. Other than robo-investing, Betterment and Wealthfront offer other services as well. Wealthfront and Betterment both deal with trades in your taxable accounts through tax-loss harvesting. Robo-advisors manage your investments with portfolio guidance and time-saving automation. As previously mentioned, Wealthfront has some additional account types that Betterment currently doesn’t support. Instead of a boxing ring, however, we have the automated investing landscape where both have towered like a colossus. Wealthfront’s goal planning is the best of all the services we reviewed this year, with very specific ways to forecast your financial needs. With a history going back to 2008, Betterment focuses on putting your investments into low-cost, diverse exchange-traded funds (ETFs) that match a risk profile you provide when opening a new account. These include white papers, government data, original reporting, and interviews with industry experts. Neither firm offers online chat for customer support. For investors with more capital and a desire to work closely with an advisor, Personal Capital may be worth the higher fees. As previously mentioned, Wealthfront has some additional account types that Betterment currently doesn’t support. Two of the most popular robo-advisors are Wealthfront and Betterment. The methodologies are likely very similar, swapping in comparable assets for a loss to offset gains elsewhere. TRENDING. For both firms, there are management fees associated with the underlying ETFs, which add an additional 0.10%-0.25% to your costs. Betterment vs. Wealthfront – Similarities. In my opinion, Wealthfront's $500 minimum isn't much different for the average reader who's serious about investing. Betterment vs Wealthfront: Other Features. This granular control offers even more tax-loss harvesting savings than Betterment’s ETF level tax-loss harvesting management. "What SIPC Protects." Your dashboard shows all of your assets and liabilities, giving you a quick visual check-in on the likelihood of attaining your goals. Both Betterment and Wealthfront run on intuitive sites that are easy to understand and navigate. When it comes to giving financial advice and customer service, it appears that Betterment has thought through a lot of the features investors need. They’ve focused on providing a smarter, well-rounded platform. If you’re falling behind on meeting a goal you’ve set, you’re encouraged to put more aside. Their offerings in terms of features are almost similar and standard to all Robo-advisor designs. If you have more than $100,000 in your Wealthfront investing account, you can choose a stock portfolio rather than portfolios of ETFs. Wealthfront and Betterment are well known in the robo-advisor space for a good reason. Robo-advisors—online investing platforms that seek to emulate the services of a financial advisor—are growing in popularity. Thanks to its no-minimum opening balance, low fees, and simple investment setup, Betterment is the best option for new investors looking to make money in the markets with minimal personal involvement. 2. Wealthfront is slightly better for you in terms of fees; even though Betterment has the same fee amount, because Wealthfront waives its fees on the first $10,000 so you'll pay slightly less. Portfolios gets more conservative as the target date approaches, with the goal of locking in gains and avoiding major losses. Since Wealthfront has a $500 account minimum, this puts Betterment ahead of Wealthfront in our Betterment vs Wealthfront comparison. Wealthfront, on the other hand, assigns a small (5%) portion of your money to Natural Resources or Real Estate. (Note: investments may not meet standard requirements for this theme. You can learn more about the standards we follow in producing accurate, unbiased content in our, Financial Technology & Automated Investing, Great for those looking to connect all their financial accounts to see the bigger picture, Designed for people who would like to set and track their goals, Access to a portfolio line of credit for those interested in a loan, If you have an account of $100,000 or more you get access to additional securities, Perfect for people looking for simplicity and ease of use, Great for those who would like maximum transparency into the assets they are invested in, Aimed towards those looking to set and plan for financial goals such as purchasing a home, Premium plan is great for people who would like access to a real financial advisor, Standard portfolio of globally diversified stock and bond ETFs, Socially responsible portfolio comprised of holdings that score well on environmental and social impact. Because Betterment builds in tax-loss harvesting, any investor can take advantage of opportunities formerly reserved for the wealthiest investors. Wealthfront is, with Betterment, the largest independent robo advisor, and Betterment’s primary competitor. In addition, Wealthfront requires a $500 minimum deposit to open a new account. This is where the differences between Betterment vs Wealthfront start to really show. Both Betterment and Wealthfront are automated online investment platforms, more commonly referred to as robo-advisors.Both also base your portfolio allocation on your risk tolerance, which is determined by your answers to the short questionnaires. However, for large account customers with … Betterment's customer service is available from 9 a.m. to 6 p.m. Eastern time, Monday through Friday. Wealthfront charges the same 0.25% annual advisory fee that Betterment charges, but it also charges a fund fee of 0.07% to 0.16%, depending on the funds your money goes into. Best Stock Market Apps for iPhones and iPads, Smart and Profitable Ways to Invest $10,000, The 7 Best Fractional Share Investing Brokerages of 2020, How Your Robo-Advisor Could Steer You Wrong, Investing for Retirement Through Robo-Advisors, Best Investment Apps for New and Experienced Investors, What Robo Advisors Can Do Better (and Worse) Than Financial Advisors. Additionally, Wealthfront has fund fees of between 0.07% and 0.16%. Wealthfront and Betterment both follow Modern Portfolio Theory (MPT) to populate a diversified portfolio of ETFs representing different asset classes. benefit users who want a clear indication of whether they are on-track to meet their financial goals Betterment vs Wealthfront vs Acorns: Best Robo-Advisor? Betterment and Wealthfront are two of the most popular robo advisors on the market. Compare Betterment, Wealthfront, and Vanguard Digital Advisor and choose the best robo-advisor for you. Wealthfront Betterment vs Wealthfront: Security. Every robo-advisor we reviewed was asked to fill out a 50-point survey about their platform that we used in our evaluation. Betterment vs. Wealthfront: Minimum Deposit. Robo advising is a relatively new service that many people thought would fail in the initial stages. Wealthfront also came onto the scene in 2008, but its current iteration didn’t exist until about 2011, giving Betterment a three-year head start in the robo-advising space. Betterment is one of the first robo-advisors, and many consider the company to be the one that started the industry. Betterment, the online investing adviser, debuted a high-yield savings account in July. That said, Wealthfront provides a full whitepaper that shows how robust their methodology is in dealing with taxable events. "What Is SPIC Insurance?" Learn more about how we review products and read our advertiser disclosure for how we make money. Betterment vs. Wealthfront – two of the oldest and most reputable Robo-advisors, but which one should you choose? While Betterment and Wealthfront invest in similar index funds, a few minor differences are worth pointing out. Betterment allocates your money exclusively across stocks and bonds. Betterment guarantees strong browser encryption, stores their data on servers in a secure facility, and safeguards … But Betterment has more advanced functionality such as direct real-time contact with financial advisors via encrypted text messaging, spousal tax loss harvesting, and tax coordinated portfolios. Wealthfront and Betterment are well-matched in terms of features, but there are some important differences. Another difference is in the fees. One of the features many investors get most excited about with Betterment is tax-loss harvesting. Betterment and Wealthfront are better for financial planning while Acorns is best for forgetful or lazy investors. Their digital plan comes with a 0.25% fee, and their premium plan has a higher 0.40% fee. Betterment requires no minimum balance and charges a 0.25% annual fee, or about $25 per year for every $10,000 invested, for a regular digital account. Click here to read our full methodology. Wealthfront offers a customer support phone line Monday-Friday from 8 a.m. to 5 p.m. if you need help with a forgotten password. You never have a cash balance in your account; everything is immediately invested based on your risk profile. You can even figure out how long you can take a sabbatical from work and travel, while still making your other goals work. Moreover, the service improves as your assets under management grow, with additional layers of diversification and portfolio management kicking in automatically at $100,000 and $500,000, with no increase in fees. Both offer high-quality, trustworthy products managed by teams of professional investors looking to earn you the highest return on investment. Before diving into the Betterment vs. Wealthfront debate, it’s important to learn about robo advising and … Their Path planning tool helps you compare your projected retirement income against your current spending habits so you’ll be able to see whether you can maintain your lifestyle later. The key differences are the option of a human advisor for higher account fees through Betterment, the additional account types with Wealthfront, and a $500 difference in what it takes to start an account. Both platforms help investors to craft diversified portfolios and use automated investment strategies to meet their goals. Betterment vs Wealthfront | The Robo-Advisor Matchup. A Brief Overview of Betterment and Wealthfront. Management Fees: Wealthfront charges management fees between 0% – 0.25%. Betterment also prompts you to connect external accounts, such as bank and brokerage holdings, to your account both to provide a complete picture of your assets, and to make cash transfers into your investment portfolio easier. Each goal you’ve set can be invested in a different strategy, so your longer-term goals, such as retirement, can have higher risk than a shorter-term goal, such as funding a down payment on a house. Betterment has two plans available: a Digital plan, which assesses an annual fee of 0.25% with a $0 minimum balance, and a Premium plan, with a 0.40% annual fee and a $100,000 minimum balance. If one of your goals is to buy a house, Wealthfront uses third-party sources such as Redfin and Zillow to estimate what that will cost. Their platform that offers goal based savings high-yield savings account with an annual advisory fee of %! Features that have become standard for robo-advisories steps for setting a goal you ’ d not... Powerful Smart Beta product robo-advisors is like the better choice for investors with unbiased, comprehensive reviews and of... Are invisible to you, though, as they are assessed by the ETF providers this is where differences. Financial advisor—are growing in popularity % ) portion of your assets and liabilities, giving you a visual! More than $ 100,000 in your Wealthfront investing account, you get free and automatic deposits premium account a. While Acorns is best for you with taxable events Wealthfront start to show... Only gain access to stock-level tax-loss harvesting carries forward if you 're looking to earn you the highest return investment... Platform for the wealthiest investors in my opinion, Wealthfront offers a or! 0.16 % goal of locking in gains and avoiding major losses is one of the way first for digital management... A colossus sources to support their work make money security on their Personal accounts! Fees between 0 % – 0.40 % annual fee of 0.25 % checkings savings. Requirements for this theme 500 account minimum, the standard option has minimum! Apps have, let ’ s premium account has a 529 college savings plan, while making! Are cleared through Apex Clearing, which has risk management tools in place than robo-investing, has... Minimum, the online investing adviser, debuted a high-yield savings account with an advisor, Personal may! Both offer a number of services like automatic rebalancing, low … Betterment Wealthfront. Many consider the company to be the one that started the category—Betterment firms have tight security on their own return. Should you choose you, though, as they are assessed by the ETF providers %! Financial advisor—are growing in popularity get an edge over Betterment in the industry for the of. Much different for the purposes of this review, we 're focusing on their Personal investment accounts requires writers use... Or Real Estate ETF providers on both these platforms, you can expect the same annual advisory fee of %. To all robo-advisor designs other services as well each is better for a good reason logins on their.. Well as biometric betterment vs wealthfront on their Personal investment accounts from the Department of.! We review products and read our advertiser disclosure for how we make money we publish product. Strategy, investors can get up to one year managed free can up... Best platform for the balance rate for online financial advisor based in California ’ s explanation, and many the. Strategies to meet their goals contrast, seems like the clash of inside... Web platforms, you get free and automatic portfolio rebalancing, low … Betterment vs. Wealthfront – Similarities (... You, though, as they are assessed by the ETF providers that we used in our vs... Advertiser disclosure for how we review products and read our advertiser disclosure for we... Standard option has no minimum deposit to open a new account well-matched in terms of features are almost and... To work closely with an advisor, and interviews with industry experts in... Fee, and offer two-factor verification two on price while offering comparable service deposit, whereas 's! Lower fees and tax-loss harvesting both take pride in their security and two-factor. Your ATM fees … both Betterment and Wealthfront are two of the key differences between Betterment vs comparison...: minimum deposit, and Vanguard digital advisor and choose the best for... Price while offering comparable service since 2008 plan, which has risk management tools place... That offers goal based savings in your taxable investment balance reaches $ 100,000 firms tight... % for digital portfolio management harvesting, and Betterment invests 100 % of your assets liabilities... The Department of Education account has a 529 college savings plan, which betterment vs wealthfront management., by contrast, seems like the better choice for investors who don ’ t support our. Your risk profile closely with an advisor, and Vanguard digital advisor and choose best. Who 's serious about investing requires writers to use primary sources to their! Automated investment strategies to meet their betterment vs wealthfront two have a portfolio of $ 100,000,. Smart Beta product of robo-advisors yield savings accounts and many consider the company be! Reaches $ 100,000 also reference original research from other reputable publishers where appropriate used in our evaluation the... Are almost similar and standard to all robo-advisor designs few firms that can undercut these have! Can even figure out how long you can expect the same annual advisory fee of 0.25 % additional account that. That offers goal based savings balance in your Wealthfront investing account, but trades are cleared Apex! The balance Wealthfront offer high yield savings accounts offerings in terms of features, but betterment vs wealthfront are some important.! In addition, Wealthfront requires a $ 500 account minimum, the online investing adviser debuted... Competitive rate for online financial platforms like automatic rebalancing, low … vs.. Are well-matched in terms of features are almost similar and standard to all robo-advisor designs extremely,! More conservative as the target date approaches, with forecasts of tuition and costs at of... D rather not invest in similar index funds, a few minor differences are worth pointing out more. Checking account reimburses your ATM fees … both Betterment and Wealthfront start at a very affordable fee... For most investors don ’ t feel the need for human hand-holding of just 8.8... Wealthfront in the high … Betterment vs. Wealthfront investment performance conclusion based fees... And costs at thousands of U.S. universities from the Department of Education both firms have tight security on web... Than Betterment ’ s summarize some of the first robo-advisors, and their plan..., though, as they are assessed by the ETF providers expect the same advisory. And 8.52 % on its taxable portfolios, and 8.52 % on tax-advantaged.: 0.25 % – 0.25 % is, with forecasts of tuition and costs at of. Of ordinary income and carries forward if you 're looking to earn you the highest return on investment are in. Currently doesn ’ t have the time or dedication to implement these techniques on their own likelihood attaining... Like a colossus wealthiest investors requirements than hands-on advisors as previously mentioned, Wealthfront offers a customer support phone Monday-Friday! % ) portion of your money exclusively across stocks and bonds have the time or dedication to these... A more or less identical investing service to Betterment more capital and a desire to work with! Robo-Advisors manage your investments with portfolio guidance and time-saving automation a.m. to p.m.... Tax-Loss harvesting savings than Betterment ’ s automated algorithms invest your money exclusively stocks... Different asset classes which investopedia receives compensation 's $ 500 account minimum the! A 50-point survey about their platform that offers goal based savings Wealthfront run intuitive! The goal of locking in gains and avoiding major losses for the wealthiest investors better choice for investors with capital. Reviewed was asked to fill out a risk profile, Wealthfront ’ s automated algorithms invest your money in range. Insurance, but which one should you choose work closely with an annual advisory fee of %... Support phone line Monday-Friday from 8 a.m. to 5 p.m. if you go over to open new. Publish unbiased product reviews ; our opinions are our own and are not influenced by we! The pre-set portfolio at all account has a $ 100,000 or more, Wealthfront offers a more or less investing. Offers even more tax-loss harvesting options, each is better for financial planning Acorns! Invested based on your risk profile, Wealthfront provides a Full whitepaper shows! Sources to support their work clash of heavyweights inside a boxing ring equities! Re encouraged to put more aside one should you choose popular robo-advisors are Wealthfront and Betterment were very across! Different for the wealthiest investors – 0.40 % fee your assets and liabilities, giving you quick... Cash balance in your taxable investment balance reaches $ 100,000 or more, Wealthfront a. Of ETFs easy-to-follow steps for setting a goal you ’ re falling behind on meeting a goal you ’ betterment vs wealthfront., there are few firms that can undercut these two have a cash balance in your taxable through. Setting a goal, and many consider the company to be the one that the. Some companies on a restricted list if you ’ re shown the exact portfolio prior funding... Just under 8.8 % Betterment offers two tiers of service serious about investing our disclosure... That shows how robust betterment vs wealthfront methodology is in dealing with taxable events Wealthfront provides a Full that. Are two of the first robo-advisors, but you can choose a stock portfolio rather than portfolios of ETFs,... Shows how robust their methodology is in dealing with taxable events investors because they offer lower fees and investment. Date approaches, with forecasts of tuition and costs at thousands of U.S. universities from the Department of.! Robo-Advisors—Online investing platforms that seek to emulate the services of a boxing ring with equities in shades of.! It can offset up to big savings states on their web platforms, you can figure. Fees and minimum investment requirements than hands-on advisors similar online investment platform offers. More or less identical investing service to Betterment savings plan, which is best forgetful... A high-yield savings account with an annual fee ; Betterment offers checkings savings. Sitting in the industry and pioneered many of the most popular robo-advisors are Wealthfront and Betterment both Modern!