Since the time people started getting involved in investing, professional investment managers and financial advisors are there to help organize and manage investment portfolios. As years go by and technology has become a huge part of our lives, robo advisors have begun to crop up. In fact, they have reduced the need for human financial advisors since they offer great convenience with just a few clicks of the mouse button, but what is the best way to invest money?
With several choices of robo advisors these days, it can be a great challenge to choose the right one for you. However, before we get to the comparison between three of the top robo advisors today, it is necessary that you understand what they are exactly. What is a robo advisor and should you really place your trust in them?
What are Robo Advisors?
Robo software has been around even before the first few ones were introduced to the public. However, before people got to know that these pieces of software existed, only financial advisors had access to them. The programs were created with the intention of providing assistance to financial advisors so they can easily trace, rearrange, and manage the assets of their clients based on certain aspects.
Robo advisors were indeed such a huge help for human advisors who could serve more clients. They had enough time in their hands that they could even provide face-to-face consultations without problems in micromanaging the portfolios of their clients.
Over a decade ago, the role of the Internet began to grow in many industries. Investments were managed quickly, thanks to these robo advisors. However, consumers were not too happy with sharing their personal information online. The reluctance caused robo software to remain in the dark for a few more years.
Recently though, many people have started to be more open to the Internet, which gave way to a handful of automated services and software. It included wealth management tools that can perform tasks professional humans typically do. Robo advisors were among these tools, which were introduced in 2008.
It made its first appearance on personal investments, particularly direct-to-consumer transactions. About two years passed when several companies started trying robo advisors. It led to many of them creating their own versions of the software. They aimed to help clients manage and rebalance their portfolios in the most automated way possible.
Technology improved greatly, which is evident in how these robo advisors grew and improved. Before they become popular, they were initially programmed to compute investment allocations. The goals of the client and the time frames were among the considerations for the calculation. Today, however, robo software can assist investors in maintaining their assets and investments despite the varying market conditions.
Benefits of Using a Robo Advisor
Robo advisors are online software applications that offer a ton of benefits for its users, particularly the investors. They provide lower minimum balances and fees, which allow beginners to enjoy an affordable entry to investing.
Robo advisors, including Betterment, Wealthfront, and Vanguard, are useful for those who do not want to – or cannot – hire a human financial advisor. They can automatically choose investments that are appropriate for an investor’s specific goals.
Aside from the ones above, the benefits of getting a robo advisor include:
It is simple and straightforward. You can use it right after you set up your account, which will let you access various tasks, including making regular contributions and generating a portfolio that suits your goals.
If you have limited funds, a robo investor can be beneficial for you. Typically, you can save more with this software since their fees are up to .50% of your account size. Human financial advisors, on the other hand, can charge you at least 1.35% of your present portfolio.
Robo advisors also let you invest anonymously, which gives you a sense of freedom.
Robo software applications can be the perfect solution for you as you grow your investment portfolio without the need to hire a financial advisor for guidance.
Reviewing Three Robo Advisors
When choosing between Wealthfront, Vanguard, and Betterment, you will have to go over each of their pros and cons and then assess them individually. You can consider how they will impact various parts of investing, including long-term and short-term capital gains, as well as their management fees, retirement accounts, and tax-advantaged accounts among others.
Bottom line up front, your final choice will depend on your requirements. This review will help you decide which among these three robo advisors is best for you.
Betterment is one of the fastest growing robo advisors that exist today with over 300,000 clients and managing almost $12 billion assets. The company promises to provide portfolio management services that even beginners will find affordable and accessible.
Who is Betterment For?
Betterment is a robo advisor that lets you invest your savings and guarantees that you will not have to worry about anything else. It does not require you to research about investments that you should purchase. It also automates rebalancing your portfolio. Betterment performs a lot of other tasks for you without needing you to be an owner of stocks or bonds. It is because investments are in the form of exchange-traded funds or ETFs, which help reduce investment risk overall because the account does not focus too heavily on a specific asset class.
Betterment is considered an excellent option for retirement investors, as well as hands-off investors. The software is also useful for those with low balances and people who opt for automatic rebalancing. If you like tools that focus on user goals, Betterment is a must-try.
Pros of Betterment
This robo advisor has plenty of advantages over its competitors, including:
No required minimum deposit
One of the reasons why investors choose Betterment is that it is one of the few applications around that do not need a minimum deposit. Note though that if you choose Betterment Premium, you will need at least $100,000 balance, which awards you unlimited phone access to real financial advisors.
Low management fees
Betterment has two available plans, Betterment Digital and Premium, which have varying fees: 0.25% and 0.40% respectively. Although there are companies that charge lower, 0.25% is still expensive for a management fee. The subscription also lets you consult with financial advisors through in-app messaging.
Financial planning packages
The company now offers packages targeted to certain life events. For instance, $199 will provide you with a college planning package, which includes one hour on the phone with a financial planner who will talk to you about strategies on how to save for college. There are about five packages from Betterment and they cover topics for beginners and for those planning for retirement.
Saving based on goals
During the sign-up process, you will go through an exercise where you will be asked to set your goals. Some of the questions include your age, your current annual income, and more. Your answers will allow the software to provide you with suggestions for your next goals while providing an estimate for a safety net of your expenses. Each goal you supply will have a recommended time frame and asset allocation.
One feature that should be mentioned is SmartDeposit, which is optional but allows you to harvest cash you don't need out of your account automatically. You will set the maximum amount that your checking account should and SmartDeposit will pull out the excess cash after monitoring your account each week.
Cons of Betterment
There are some areas where Betterment falls short, including:
The absence of direct indexing
Many robo advisors, such as Betterment, have the tax-loss harvesting feature for taxable accounts. Although the platform will automatically review your daily investments so you can avoid tax exposure, it does not offer direct indexing. This service purchases the single securities of an index instead of having ETF track the index.
Goals for safety net
As mentioned above, Betterment suggests safety net goals in which the advice is to invest about 40% in stocks and the rest in bonds. Common knowledge is about not investing in short-term savings, which include emergency funds, especially if the goal is underfunded. The simple reason for this advice is that you may require access to the account immediately. Plus, it is not the money you can lose.
Is Betterment for You?
Betterment is one of the biggest robo advisor companies around. It has an impressive speed of attractive assets and clients. The goal-oriented tools, as well as the richness in features of the application, may appeal to you, especially if you are a retirement investor. Additionally, it provides human advice inexpensively compared with other self-regulating hybrid advisors out there. If you have taxable accounts, you may want to look at other options, such as the next robo advisor in this review.
Wealthfront has a wealth of features that include holistic financial advice as well as automated management of investments. With such features, Wealthfront has become one of the top options for both new and experienced investors. It comes with helpful tools for financial planning, portfolios (both hands-off and diversified), and advanced strategies for tax optimization. Right now, Wealthfront has almost $11 billion managed assets.
Who is Wealthfront For?
If you plan to use Wealthfront as your robo advisor, you will truly benefit from it if you are a hands-off investor and you have taxable accounts. It comes with 529 college savings plans and rebalances portfolios automatically. If you are a passive investor looking for a software application with low fees, you may want to try Wealthfront.
Pros of Wealthfront
This robo advisor shines in various areas, including:
The company has a methodology that includes providing investors with a questionnaire that will allow the identification of risk tolerance. Then, exchange-traded funds will be employed in up to 11 classes of assets. The process will be automated after the setup and the software may rebalance whenever the user reinvests dividends or deposits money. Wealthfront also utilizes rebalancing methods based on thresholds, which means that rebalancing is performed when an asset class moves away from the objective allocation instead of focusing on a yearly or quarterly schedule.
Efficiency on taxed accounts
Wealthfront has tax-loss harvesting every day on all taxable accounts. If you are a new client who needs to transfer assets, you will benefit from the service, which is formally called Tax-Minimized Brokerage Account Transfer. It incorporates your existing investments into your portfolio and accommodates transferred securities.
The software comes with a Path tool, which is usable on both desktop and mobile. It helps the users plan strategically for different purposes, including retirement, college, buying a house, and general savings. For instance, if you want to create a retirement savings plan, the Path tool will pull your spending activities from your accounts and analyze various spending patterns to come up with an estimate for your actual expenses as you retire.
Customers who have $100,000 or more in their account may be approved of a loan that is worth up to 30% of their portfolio value. It is hassle-free since you do not have to fill out an application or even undergo a credit check. You also do not have to pay any fees, although the interest rates are from 3.5% to 4.75% annually.
Cons of Wealthfront
Wealthfront is not a perfect robo advisor and has some limitations, including:
Cash balance maintenance
The software application will not purchase fractional shares of ETFs so the company does not invest in your whole deposit. Wealthfront also keeps a cash balance equivalent to the estimate amounts you will owe over the next 12 months.
No access to a human advisor
Unlike Betterment, Wealthfront will not provide you with a human financial advisor. It can be frustrating for many beginners in investing but you may still be able to manage if you already know some of the basics.
Is Wealthfront for You?
Wealthfront offers a ton of benefits for its users. For instance, if your main goal is to save for college, it can be a great robo advisor with its 529 savings plans. The software appears to be superior investment service and shines with users who have taxable accounts. It can even help lower your annual tax expenses, thanks to its tax-loss harvesting service. The robo advisor is useful for you even if you are a beginning investor, especially if you are leery of going into individual securities. You will benefit from Wealthfront if you are a passive investor because maintenance and selection of securities are not necessary.
Additionally, the Path planning model is quickly becoming a useful service. You can “set and forget” because Wealthfront will do all the other heavy tasks for you. However, if you like to interact with humans and if you have more than $50,000 to invest, you can check out Vanguard instead.
For most investors, Vanguard is best known as a broker that charges minimal fees. However, it is more than your low-cost broker since it is what many long-term investors who prefer mutual funds and ETFs choose to use for the most returns. Vanguard has low expense ratios on both ETFs and mutual funds while providing full brokerage services. They include bonds, options, stocks, and Forex trading, along with tiered commissions for large investors.
Who is Vanguard For?
Depending on your investment strategy and financial goals, Vanguard may be the robo advisor you have been searching for to help you manage your finances. It does not appeal to every broker though, which makes this company unique. Some investors who will benefit from Vanguard include those who are retirement or long-term investors, as well as those who opt for low-cost investments.
As mentioned, you will find this software useful if you are an ETF and index fund investor. If you have high account balances, you may also want to consider using Vanguard. Meanwhile, if you only have shorter-term goals and you are happier with actively trading bonds and stocks, you will certainly find better options out there.
Pros of Vanguard
Here are some of the top reasons why you should set up an account with Vanguard:
Low fees on ETFs and mutual funds
For such investors, Vanguard is the best option because it allows them to save as much as 81% if they invest here. You can save a ton of money on commission fees if you do not trade 25 times or more in a month on Vanguard.
No minimum required for new accounts
You do not have to worry about minimum requirements when opening an account here. Of course, you will need some money so you can start investing. Vanguard does require you to have enough money to buy one ETF share, which can be as low as $50.
No fees when trading ETFs
In most cases, you do not have to pay fees either in buying or selling Vanguard ETFs. The requirement is that you do not trade the same ETF more than 25 times in a single year. If you meet this one condition, you will not have to pay any commission.
You can seek the help of a professional broker without paying any extra fees when trading ETF funds. You can hire an advisor, as well but there is an annual charge. The fee though is quite minimal since it is only 0.3% of your assets that Vanguard manages. It is a requirement that you have at least $50,000 in investments.
The company has more than 100 funds that you can freely choose from, which can truly benefit both experienced investors and beginners. Therefore, whether you are more interested in index funds or managed funds, you will find numerous selections from this company. It increases your chances of discovering investment opportunities that do not require a commission.
Cons of Vanguard
The robo advisor may need some improvements on the following:
Mediocre online trading platform
Several users are unhappy with the run-of-the-mill trading platform from Vanguard because it does not offer a great deal of charts and reports. It is also not recommended for day traders who frequently perform trades. You will like the software though if you are an ETF or mutual fund investor with less frequent activities since it does not allow customization and lacks some automated features.
Steep commissions for assets from other brokers
If you will trade non-Vanguard assets, you will have to pay for expensive commission fees. Also, you would end up spending a lot on commission if you make frequent trades.
Is Vanguard for You?
As mentioned, if you are a day trader, you are more likely better off with another broker that provides lower commissions or flat fees since you will frequently trade. Nevertheless, if you invest mostly in mutual funds and ETFs, this robo advisor is worth your while. You will find a long list of investment choices that will not charge you any commission. You can get a higher return on your investment if you choose Vanguard.
Which Should You Choose: Betterment, Wealthfront, or Vanguard?
As mentioned near the beginning, selecting the right robo advisor for you will depend on your goals and requirements. There is no correct and uniform way of comparing these three robo advisors since they have unique features and target users.
Wealthfront and Betterment do have similar services though, such as tax loss harvesting and portfolio rebalancing. Plus, they have similar account types, such as taxable accounts and IRAs. However, Wealthfront comes with lower fees for accounts with $100,000+ whereas Betterment imposes higher fees. If you want access to a human advisor, Betterment is a much better option because it provides you with unlimited access to experts regardless of your balance.
Betterment also has Certified Financial Planners that can give you advice on non-Betterment investments, as well as guidance on special events in your life. Betterment can also buy fractional shares, which is useful as it lets you make money on your portfolio.
Meanwhile, Vanguard is a good choice for you if you do not mind the high annual fee and you have more than $50,000 to invest. The company lets you interact with humans for financial advice and you can talk to them during weekdays. These advisors can help you choose the right investments for you by looking at your financial goals. They will also rebalance and monitor your portfolio.
Regardless of which you opt for, these robo advisors are designed to make things easier for you. Couple that with their investing apps and you have a winning combination. They are indeed convenient for newbies and experienced investors. When you have set your financial goals, these pieces of software can manage your investments for you and can even provide you with human financial advisors who can add tremendous value to your portfolio.
Robo-advisors seem to be just the type of investment tools one would imagine in an era of automation. Better yet, a lot of robo-advisors are great because they bring financial planning and investment down to the regular folks armed with a smartphone and an internet connection. In fact check out our Acorns vs Stash review for a couple more mobile app options.
Betterment, Vanguard, and Wealthfront are three of the robo-advisors that are considered the leaders in the field. While using either of them is a safe way to invest money, each has a thing or two that make it special. These questions should help you find out which would be the best for you.
Betterment General Questions
With its low-fee structure and low barrier to enter, Betterment is a popular choice for people who don’t want to get too involved in their investments. The following answers give you the general image of Betterment and its services.
What is Betterment investing?
Betterment investing is a New York City-based investment company, investment advisor, and a broker-dealer.
When did Betterment start?
Betterment was founded in 2008.
Where is Betterment located?
Betterment’s headquarters are located in New York City, at 61 W. 23rd Street.
How does Betterment work?
Betterment works by considering various parameters such as goals, risk tolerance, and time horizon, and using them to create a custom investment portfolio for you.
Is Betterment worth it?
Betterment might be worth it, especially for the people who don’t want to invest too much or are new to investing. The low-fee structure makes it appealing.
Is Betterment profitable?
Betterment can be profitable — as with any other type of investing, its profitability largely depends on the performance of the market.
Does Betterment invest for you?
Betterments automates the investment and account rebalancing process, but you still have some choice regarding the portfolio strategy you want to use.
Is Betterment better than Vanguard?
Whether Betterment is better than Vanguard largely depends on your own circumstances and goals.
How many customers does Betterment have?
The number of customers Betterment serves is always changing. In early 2018, however, the company had roughly 300,000 customers.
How to make money with Betterment?
You make money with Betterment by investing your money according to Betterment’s advice.
Betterment Safety and Security Questions
You should always make sure that you check the safety and security of the business you’re entrusting to invest in your name. Read on to learn about Betterment’s safety and security features.
Is Betterment safe?
Betterment is a safe choice for people who want to try a robo-advisor.
Is Betterment a good investment company?
Betterment is one of the leading robo-advisors, or automatic investment advisors, on the market. For people who are looking for robo-advisors, it’s among the top choices.
Can I trust Betterment?
Betterment is a company with a fiduciary responsibility to act in your best interest.
Is Betterment a regulated investment company?
Betterment is actually two companies: the SEC-registered investment advisor called Betterment, and Betterment Securities, a broker-dealer regulated by the SEC and FINRA. So yes, it is regulated.
Is Betterment a good way to invest?
Betterment could be a good way to invest for you if you’re looking for the type of service the company offers. If you’re more interested in managing your investments without any help, you should save yourself the fees.
Is Betterment a scam?
Betterment is not a scam — it consists of two real, registered companies, with over $14 billion of assets under management as of 2018.
How to Use Betterment
Choosing a robo-advisor in one thing but learning how to set it up is very different. These answers should help you make things clear when it comes to using Betterment.
Why use Betterment?
The main draws for using Betterment include low fees and the lack of a minimum deposit requirement. Betterment also offers goal-oriented savings, financial planning packages, as well as other services that make it attractive.
How to invest in Betterment?
To be able to invest using Betterment, you first need to make an account with the company using their website. During the procedure, you’ll get to choose your account goals, review your portfolio, link your bank account to your Betterment account, and set up your deposit.
How much should I invest in Betterment?
You can invest as little as you want with Betterment — the company doesn’t require its users to make a minimum deposit investment. You should keep in mind, however, that each of your accounts is SIPC-protected up to $500,000.
Can I withdraw money from Betterment?
You can withdraw money from Betterment at any time you want using the company’s electronic transfer process.
What is a Betterment account?
A Betterment account is the type of account you can open with Betterment. The company supports Roth IRAs, traditional IRAs, trust accounts, single-participant SER IPA, individual taxable accounts, and joint taxable accounts with rights of survivorship.
How much are Betterment fees?
Betterment fees are based on the account balance and the type of plan you choose. The digital plan fees are 0.25% annually, while the premium plan fees are 0.40% of the account balance annually. Fees might change depending on the account balance.
How to use Betterment app?
The Betterment app is available for both Android and iOS. You can use it if you have a Betterment account by downloading the app from the Apple Store or Google Play and logging in.
How to delete Betterment profile?
You can delete your accounts with Betterment by accessing the website from a web browser and finding the Accounts option under Settings.
Vanguard General Questions
When checking out a financial institution, you should make sure that you learn its basic information. The following answers will help you do that for Vanguard.
What is Vanguard funds?
Vanguard funds are mutual funds or exchange-traded funds provided by Vanguard. These funds also count as the owners of Vanguard as a company and investing in them makes you a co-owner of Vanguard.
Who owns Vanguard?
Vanguard is a privately held company. The owners of the company are the company’s funds, which are in turn owned by the people who invest in them. That means that, when you invest in Vanguard’s funds, you become one of the owners of the company.
Where is Vanguard located?
Vanguard is headquartered in Malvern, Pennsylvania.
What does Vanguard do?
Vanguard is an investment company, and as such it offers investment advice as well as other financial services and products.
How does Vanguard work?
Vanguard is an investment company that works by allowing people who invest in its fund to become part-owners. That allows Vanguard to pass on any fees it would spread out among third-party owners to people who have accounts with the company and invest into its funds.
What is a Vanguard account?
A Vanguard account is any of the types of accounts offered by Vanguard. As a member, you can open accounts ranging from Roth IRAs to brokerage accounts.
What is the Vanguard 500 Index fund?
Vanguard 500 Index fund is the first ever index fund to become available to the public. Launching the Vanguard 500 Index was one of the major events that put Vanguard on the map.
What is a Vanguard Brokerage Account?
A Vanguard Brokerage Account is an account you can have with Vanguard that will allow you to buy and sell stocks, ETFs, and other financial products.
Is Vanguard publicly traded?
Vanguard is not a publicly traded company. As of December 2018, it remains privately held.
How does Vanguard make money?
Vanguard makes money by charging fees and through expense ratios. Note that, because Vanguard is owned by fund-investors, the company makes money for itself only to cover the costs.
Vanguard Safety and Security Questions
You should never give your money to someone without checking their safety record first. Even if they are a company that’s been around as long as Vanguard. You’ll read the company’s safety and security basics below.
Is Vanguard safe?
Vanguard is a regulated financial company with plenty of assets under management, a solid reputation, and a tradition of innovation. Keep in mind, however, that investment is never without risk, and that you’re able to make choices that increase or reduce the safety of your investment.
Are Vanguard accounts insured?
Vanguard accounts are protected by the SIPC up to $500,000. Vanguard also provides additional insurance for eligible customers. No insurance policy can cover the losses due to lowering market values of securities, though.
How to Use Vanguard
Using robo-advisers can be really easy if you know what you can and cannot do. These answers might make using Vanguard easier for you.
Vanguard can be attractive to investors for several reasons. Its reputation as the legendary institution that brought no-fuss investing to the masses is one. The low fee structure is another. The variety of funds on offer is also attractive.
How to buy Vanguard index funds?
The best way to buy or invest into Vanguard index fund would be to do it through Vanguard Brokerage Services. Other brokers might be able to help you, but they might do it for a commission.
How to open a Vanguard account?
Vanguard offers an easy way to open accounts online. After answering a couple of questions and choosing a source of funding, you’ll get to choose the type of account you want, complete the application, and wait a couple of days for confirmation.
How to withdraw money from Vanguard account?
Vanguard allows you the option to withdraw your money to a connected account. Keep in mind, however, that some types of accounts will require you to sell assets in order to withdraw money, which might result in a taxable event.
How to open a Vanguard Roth IRA?
Opening a Vanguard Roth IRA is easy — the Vanguard website will take you through the steps that will help you choose the right IRA for you and then create it. You can also transfer an existing Roth IRA into Vanguard or change a traditional IRA into a Vanguard Roth IRA.
Are Vanguard admiral shares worth it?
Admiral shares offer significantly lower expense ratios on most of Vanguard’s index funds. However, they come with a required minimum investment that has to be maintained.
How to buy Vanguard ETFs?
You can approach buying Vanguard ETFs in two different ways. You can make an account with Vanguard and do it through the company. Third-party brokers can also help you, but you should ask them whether they charge commissions when trading Vanguard ETFs.
How to transfer money from Vanguard to bank?
If your money is in a Vanguard mutual fund or a settlement fund, you can easily sell the funds and mark your bank account as the destination of the money. If the funds are in stocks, bonds, or any other non-Vanguard security, you’ll have to wait until the assets sell and the payment settles before transferring money. In the meantime we also talk about the current best bank bonuses if you're looking to open a new account somehwere.
How to buy stocks on Vanguard?
If you want to buy stocks using Vanguard, you need to open a Vanguard Brokerage Account and to link it to one of your bank accounts.
Which Vanguard ETF to invest in?
As of December 2018, Vanguard has 59 ETFs you can invest in. Which one is best for you depends on your goals and your strategies — whether you want to invest in high-growing ETFs or the ones that offer better value, or the ones that allow you to diversify your portfolio.
Wealthfront General Questions
Before you open an account with Wealthfront, you can get acquainted with the company a bit more by going through the answer to the questions below.
What is Wealthfront?
Wealthfront is a robo-advisor that uses a mix of stocks, bonds, and ETFs to build an investment portfolio for you based on your goals, wishes, and the company’s analytics.
Is Wealthfront worth it?
There are several features that make Wealthfront worthy of looking into. The company is run by Burton Malkiel, a respected member of the finance community. Wealthfront has several unique offerings, including a loan program. And it doesn’t charge fees for the first $10,000 of your assets under its management. Also if you're new to investing this could be a great way to start. Learn more about how to invest in stock market for beginners.
How does Wealthfront work?
You need a minimum of $500 to start a Wealthfront account. If you choose to do it, Wealthfront will take you through a series of questions that will help them determine the type of service you want.
Is Wealthfront an IRA?
Wealthfront is not an IRA, but it allows you to open three types of IRA accounts: traditional, Roth, and SEP IRA accounts.
How good is Wealthfront?
Wealthfront is one of the top robo-advisers operating on the market today.
How much money does Wealthfront manage?
As of 2018, Wealthfront has around $9.5 billion of assets under management.
How does Wealthfront make money?
Wealthfront makes money by charging an annual advisory fee of 0.25% on assets under management.
Is Wealthfront a mutual fund?
Wealthfront has its own mutual fund called the Wealthfront Risk Parity Fund.
How much can I make with Wealthfront?
The amount of money you can make with Wealthfront depends on several factors, including your investment, risk tolerance, and the movements on the market.
Who owns Wealthfront?
Wealthfront is a privately-owned company, and it doesn’t have to report its ownership structure.
Wealthfront Safety and Security Questions
Safety and security are major concerns when it comes to money, especially if you’re saving it for something important. Learn more about Wealthfront’s safety and security features.
Is Wealthfront safe?
Wealthfront is safe in the sense that it’s a legitimate business. As for the money you invest with the company, you should understand that investing always carries some risks.
What happens if Wealthfront goes out of business?
If Wealthfront goes out of business, the Wealthfront Brokerage Corporation and the regulators that regulate financial and securities market would endeavor to give you back most, if not all, of your money.
Is Wealthfront insured?
The accounts you have with Wealthfront are covered by SIPC insurance, which is a standard practice for robo-advisers.
Is Wealthfront FDIC insured?
Wealthfront is not FDIC insured, but it is SIPC secured.
Is Wealthfront legit?
Wealthfront is a legit, regulated, professionally run company with billions of dollars of assets under management.
Is Wealthfront a regulated investment company?
Wealthfront is an SEC-registered investment company and is regulated by the relevant regulatory bodies.
How to Use Wealthfront
Your robo-advisor might do a lot on its own, but you still have to get involved at least occasionally. The following questions and answers will help.
What ETFs does Wealthfront use?
Wealthfront regularly surveys a large number of ETFs to rank them. Among the ones that end up on top are usually Vanguard ETFs such as the Vanguard Total Stock Market ETF, or the Vanguard FTSE Developed Markets ETF. iShares and Schwab ETFs also appear on the list.
How do I delete my Wealthfront account?
You should contact Wealthfront’s Client Services personnel to inquire about account deletion.
What is a Wealthfront personal account?
A Wealthfront personal account is the type of account you can open with Wealthfront if you want regular brokerage services.
How to close a Wealthfront account?
All procedures regarding closures of Wealthfront accounts are handled by the company’s Client Services team. You need to contact them directly if you want to close your account.
What is direct indexing Wealthfront?
Direct indexing was a tax-loss harvesting service offered by Wealthfront. The service available under the name Stock-level Tax-Loss Harvesting now.
How to change risk score in Wealthfront?
Wealthfront allows you to change your risk score one every thirty days from the options available in the website’s dashboard.
How to withdraw money from Wealthfront?
If you want to withdraw money from Wealthfront, you have to liquidate the account that holds the money or transfer the account to another financial institution.
How much does Wealthfront charge?
Wealthfront charges 0.25% yearly (taken out monthly) on accounts larger than $10,000.