Wealthfront Review 2020 with Pros and Cons
Wealthfront is included among the best Robo-advisor who offers an automated investment as well as manages your accounts too. And you can access your investments with the help of your smartphone app or through a computer browser.
So, now the question comes up to you that What is Wealthfront? To which we will find the answer below by analysing the Wealthfront review:
What is Wealthfront?
The second largest independent robo-advisor is the Wealthfront having an investment of at least $ 10 billion in assets. It is Redwood City, California based company. And it was established in October 2011.
Wealthfront also makes use of Modern Portfolio Theory (MTP) to diversify its investments and properly allocate its assets to different portfolios. The only difference among its portfolio is that it does not diversify the assets allocation, as it invests in a few numbers of funds only. Apart, ordinary resource stocks and actual land investment trusts are also included in their portfolio.
Wealthfront acts as a Robo advisor service, which invests as well as manages funds for you. Here you can even open up individual investment accounts and manage your funds, for the specific period you need to invest. Apart from this, there are different types of accounts offered by wealthfront which are as follows:
- Individual taxable
- Joint taxable
- Traditional IRA
- Roth IRA
- SEP IRA
- 401(k) Rollovers
- 529 College Savings Plan
So, Wealthfront is the second largest independent robo-advisor, as you know on the first place stands the Betterment. Therefore, you can rely on Wealthfront robo-advisor, while investing your funds. You can even manage your funds through your smartphone app or a computer browser.
A view of Betterment and Wealthfront:
|Assets under management (AUM)||$ 16.4 billion||$ 20 billion|
|Number of accounts||444,000||250,000|
|Headquarters||New York City||Redwood City, CA|
The signing up process of Wealthfront also starts with filling up of ephemeral questionnaire which overall analyse your investment plans as well as your level of taking risks. Here, you are required a minimum of $ 500 to start up the portfolio. Where Wealthfront performs the function of sporadic portfolio rebalancing, involuntary dividend reinvesting, as well as Tax damage reaping.
Moreover, you need to provide the following pieces of information for wealth front sign up:
- Your name
- Email address
- Social Security number
- Date of birth
- Citizenship or residency status of an individual
- Employment status
Wealthfront is Best option For:
- Passive investors
- Lower fees
- Beginning investors
- Investors who don’t want to manage money on their own
|Overview||Automated investment management robo-advisor with extra features|
|Wealthfront Minimum Investment||$ 500|
|Fees||0.25 Percent which is deducted from your account balance yearly|
|Top Features Offered||
|Tax Loss Harvesting||Provided|
|Free Services Offered||
|Wealthfront Portfolio Rebalancing||Provided|
|Wealthfront Customer Service||Phone for clients & Email 24 X 7.|
|Promotions||First $ 5,000 managed for free.|
|Wealthfront Smart Beta||Provided|
|Wealthfront Fractional Shares||Not Provided|
|Wealthfront Cash Account (New feature)||An interest rate of 1.82 Percent is paid, with FDIC insurance up to $ 1 million. Whereas, $ 1 is needed for account opening.|
|Wealthfront Assets Transfers||You can transfer your assets from different robo-advisor|
- Minimum Investment: The Wealthfront Minimum Investment is $ 500 only, which is quite low. And no fee is charged if the account balance drops off below $ 500.
- Wealthfront Fees: Here, 0.25 Percent which is deducted from your account balance yearly. But, there is no No transfer fees, account closure fees, or annual fees associated with Wealthfront fees.
|DEPOSIT AMOUNT||WEALTHFRONT FEES|
|$ 0 – $ 499||N / A|
|$ 500 – plus||0.25 per yr.|
Different Wealthfront Accounts: Some of the largest numbers of accounts are offered by Wealthfront. Moreover, they try to serve the people and their needs as recently the Wealthfront 529 account is added up for helping the parents and grandparents to fund their child’s education. Likely, some of the Wealthfront Accounts are as:
- Individual taxable
- Joint taxable
- Traditional IRA
- Roth IRA
- SEP IRA
- 401(k) Rollovers
- 529 College Savings Plan
Wealthfront Tax Loss Harvesting:
The Tax-Loss Harvesting option is available only for the taxable accounts. Thus, the motive of Wealthfront Tax Loss Harvesting is to save your taxes. Moreover, here following things are done:
- Wealthfront direct indexing is done on daily basis
- Wealthfront stock level tax loss management of all the accounts which are over $ 100,000
- Wealthfront Smart beta harvesting is done on the accounts having balance of more than $ 500,000
Here, you can manage Stock Level Tax Loss Harvesting at three levels which are:
- Wealthfront 100
- Wealthfront 500
- Wealthfront 1000
- Wealthfront 100: This selection is available to the taxable accounts having a minimum of $100,000 in their accounts.
- Wealthfront 500: This choice is available to the taxable accounts having a minimum of $500,000 in their accounts.
- Wealthfront 1000: This choice is available to the taxable accounts having a least of $ 1 million in their accounts.
The questionnaire filled up at the time of signing up determines the portfolio option to invest. So, the assets allocation, as well as the distribution of Wealthfront funds, can be analysed by Wealthfront Portfolio Which Includes:
|US||Vanguard US Total Stock Market|
|Dividend||Vanguard Dividend Appreciation|
|Foreign||Vanguard FTSE Developed Market|
|Emerging Market||Vanguard FTSE Emerging Markets|
|US Gov’t||Vanguard US Total Bond Market|
|US TIPS||Schwab US TIPS|
|Muni||iShares National AMT-Free Muni Bond|
|Corporate||iShares Corporate Bond|
|Emerging Market||iShares JPMorgan Emerging Markets Bond|
|Real Estate||Vanguard REIT|
|Natural Resources||Energy Select Sector SPDR|
While considering the Wealthfront Security provides two-factor authentication by which it is difficult or it becomes difficult to gain access to any account.
Wealthfront Financial Planning
The Wealthfront Financial Planning provides you to link all your accounts to which you can receive the needed financial reports and advice. Some, of the options on which you can get financial advice are as:
- Retirement spending
- Savings growth and rate
- Investment fees
- Home value, debt-to-income ratio, and home equity
- Investment and account values
- Net worth
Wealthfront expense ratio:
The wealthfront expense ratio keep your costs low and helps you out in making smarter trades by:
- Investing in the ETFs and seeing the wealthfront expense ratios at an average of 0.08 Percent
- By seeing the rise of Wealthfront “Risk Parity Funds” which have higher averages at 0.11 Percent
Unique Featuresof the Wealthfront:
Some of the unique features which are being offered by Wealth front are as follows:
- Wealthfront Free Monetary Planning — All your financial plan needs are answered here by providing free planning and help from the experts.
- Natural Resource as well as REIT ETFs — while allocating funds into assets it also diversifies the assets into Natural Resource as well as REIT.
- Wealthfront Smart Beta (New Plan) — You can earn more on your current investments with the help of Smart Beta option of the Wealthfront in which you just need $500,000 of a minimum amount.
- A new feature of Cash Account — A new feature of Cash Account is offered in which an interest of approx. 2.29 Percent is paid with FDIC insurance up to the amount of $1 million. So, in case of wealthfront Cash Account review You just need a minimum amount of $1 in order to open this Wealthfront cash account.
Advantages of the Wealthfront:
Some of the advantages of the Wealthfront option or some of the wealthfront negative review
are as follows:
- A low investment of $ 500 is required at the beginning.
- The annual advisory fee is low as 0.25 Percent which also considers all accounts in it.
- Natural resources stocks as well as the real estate’s stocks are included in the portfolio.
- Some of the Financial forecasting tools are made available.
- You can open up your Cash account
- The smart option of Beta is available
- You also have an option of Wealthfront Socially accountable investment
- 529 college investments accounts are made available
- Wealthfront larger portfolio makes use of Individual stocks
DisAdvantages of the Wealthfront:
Some of the disadvantages of the Wealthfront option are as follows:
- The large portfolios do not have an option of reduction in wealth front fees.
- A compulsory minimum investment of $ 500,000 is required in smart beta option.
- A compulsory amount of $ 500 is required to open up an account.
How much is the wealthfront cost?
The wealthfront cost involves Wealthfront Fees which is 0.25 Percent of your assets under management. But, it does not charge or involves the cost of the following:
- Account opening fees
- Account closing fees
- Trading fees
- Commission fees
- Account transfer fees
- Withdrawal fees
Wealthfront cash account review:
While analysing the wealthfront cash account review you should know that wealth front provides all in one financial service to its customers, where you can safely and securely store all your money and have access to it when in need. It also offers an interest of approx. 2.29 Percent which is paid with FDIC insurance up to the amount of $ 1 million.
Apart from this, there is no market risk involved and you can make as many transfers as you need to.
Wealthfront saving account review:
A wealthfront high-interest savings account is offered that pays interest amounting to 1.82 Percent. Moreover, an amount of $ 1 million in FDIC coverage is also provided to the individual opting for wealthfront saving account. And the best part while choosing the wealthfront saving account is that there is no investment management fee or any other fees associated.
Is wealthfront worth it?
After analysing the Wealth front reviews, by now you might be knowing that Wealthfront is a great option to consider for the beginner’s investors who want to expand their portfolio.
But, it does not provide human advices as the funds are managed digitally. So, in case you are looking for a human advisor with wealth front than it may not prove worth it for you.
Otherwise, wealthfront has proved out to be a worth it options to consider for the beginner’s investors providing them a good opportunity, with low cost and diversified investments.
Is wealthfront legit?
Yes, wealthfront is legit as it is a good robo-adviser scheme which even reduces the tax of an individual. Apart from providing some of the basic features such as, financial planning, safe investment strategy, having a modern portfolio theory, and others.
As you have known by now, that wealthfront robo-advisor is a common name like Betterment. Some of the inimitable features offered by the wealthfront are:
- Portfolio route of credit
- Having Rock-hard financial planning tools
- High-yield Cash savings type of account
- Not any annoying upsells on the pricier products
- Having more progressive investment strategies
We suggest you opt for a wealth front in case you have a high amount of capital. Apart from this, you can also consider it as it has low cost with great financial planning, safe investment strategy, having a modern portfolio theory, and other such options that impress you to choose this Robo-advisor over others. You can even compare betterment vs wealthfront as which one is best for you? In case you are confused between the two.
Yes, we do suggest you to choose betterment over the Wealthfront as it provides or has features such as human advice, no fees, security, etc.
The wealthfront money is invested in exchange traded funds (ETFs). So, yes you can make money with wealthfront but your allocation of funds in portfolio are dependent upon the risk you take, which furthers affects the interest or return you receive.
Yes, you can say that the wealthfront is good for IRA accounts in which you can choose your allocation of funds across different assets available.
Some of the best available Robo advisor are as follows:
- Betterment – It is categorized as the Best due to its service offered.
- Wealthfront – It is categorized as the Best as it offers low fees compared to the others.
- Ellevest – It is categorized as the Best for goal based investing offered.
- SoFi Invest – It is categorized as the Best for the educational resources.
- Charles Schwab Intelligent Portfolios – It is categorized as the Best for its usability.
Wealthfront Is an excellent investment service to choose which provides you with many different options as great financial planning, safe investment strategy, having a modern portfolio theory and others.
Yes, you can definitely lose money with wealthfront as it is a robo-advisor that invests in different portfolios. So, in case the stock market rises then you gain, and in case it falls then you can lose money.
Yes. wealthfront is safe to use as your funds are managed by using online accounts. Moreover, the new Cash Account service is also offered.
No, it does not beat the market. As Robo-advisors are designed specially to cater you with returns for a level of risk that you are taking. So, wealthfront being a robo-advisor, it does not beat the market.