One of these providers even allows its clients to take out cash loans against the value of their stock portfolio! Since not everyone's investment plans are the same, you can talk to a certified financial planner to get specific advice just for you. While Betterment’s premium account has a $100,000 minimum, the standard option has no account minimums at all. This might sway you another way, but it depends on what you want to invest in. All investing involves risk, including the possible loss of money you invest, and past performance does not guarantee future performance. Learn more about how we review products and read our advertiser disclosure for how we make money. 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. These nudges can be particularly valuable for younger investors for whom retirement or buying a house is still far off and seemingly less of a financial priority. In addition, Wealthfront requires a $500 minimum deposit to open a new account. Wealthfront’s Advantage Still, one of the most intriguing features of Wealthfront is its invitation program, which is more generous than Betterment’s. It's like regular tax-loss harvesting, but instead of investing in only ETFs or index funds, it invests in individual stocks in the S&P 500. Both companies emerged in 2008 to provide technology-powered financial management with minimum human involvement at lower fees than those charged by traditional human advisors. Betterment, Wealthfront and Wealthsimple are among the best choices in the hands-off investing world of robo-advisors. Two major robo-advisors -- Wealthfront and Betterment -- are leading the pack in the crowded field of online investing. Wealthfront has comparable management fees of 0.25%. Wealthfront Software LLC (“Wealthfront”) offers a free software-based financial advice engine that delivers automated financial planning tools to help users achieve better outcomes. Securities Investor Protection Corporation. This is where the differences between Betterment vs Wealthfront start to really show. As previously mentioned, Wealthfront has some additional account types that Betterment currently doesn’t support. Discussion threads can be closed at any time at our discretion. Wealthfront is a member of the Securities Investor Protection Corporation (SIPC) and client accounts are protected up to a maximum of $500,000. The site actually has an article on why SIPC insurance doesn’t protect investors in the way they think it does, but the company still holds the coverage. Their trades are cleared at RBC Correspondent Services, a Canadian company that focuses on wealth management and financial advisors rather than clearing firms that serve broker/dealers with very active traders. We are reviewing Betterment vs Wealthfront so that you can make an informed decision when choosing the best robo advisor. Statistics don’t lie and the respective total assets under management literally tell the whole story. This might sway you another way, but it depends on what you want to invest in. Spoiler Alert – We hate to disappoint but if you’re asking yourself which platform is objectively better there really isn’t a one-size-fits all answer. Wealthfront and Betterment both deal with trades in your taxable accounts through tax-loss harvesting. You’re shown the exact portfolio prior to funding your account, but you cannot customize the pre-set portfolio at all. Betterment gives you a free month for one referral and a free year for three referrals with no limit; Wealthfront gives you an additional $5000 managed for free per referral. Where you decide to put your money depends on which account will work best for you, not just today, but in the long-term. Be respectful, keep it civil and stay on topic. Compare Betterment, Wealthfront, and Vanguard Digital Advisor and choose the best robo-advisor for you. Make sure to find an account that grows and changes with you. Wealthfront offers stock-level tax-loss harvesting. Betterment is one of the first robo-advisors and also one of the leaders in the space. As I mentioned earlier, the first $5,000 of each person’s account is managed for free with Wealthfront when they sign up through a referral or an easy-to-find affiliate link. These two have a track record in the industry and pioneered many of the features that have become standard for robo-advisories. Their methods for tax harvesting are similar, involving selling assets that have generated losses and then buying related ones … Investing can seem like a daunting task if you don't know where to begin. Robo-advisors manage your investments with portfolio guidance and time-saving automation. What is a robo-advisor? But you don't need loads of money or a background in finance to get started. Betterment vs Wealthfront: Fees Compared Betterment’s Pricing and Fees. Wealthfront also offers a cash account (with a 0.26% APY) -- you'll need just $1 to open one. If you are trying to get started with less than $500, Betterment is the better place to start. Your dashboard shows all of your assets and liabilities, giving you a quick visual check-in on the likelihood of attaining your goals. Wealthfront, by contrast, seems like the better choice for investors who don’t feel the need for human hand-holding. Our 2019 reviews are the result of six months of evaluating all aspects of 32 robo-advisor platforms, including the user experience, goal setting capabilities, portfolio contents, costs and fees, security, mobile experience, and customer service. Like you, your investments can grow and change. Betterment's customer service is available from 9 a.m. to 6 p.m. Eastern time, Monday through Friday. Wealthfront offers a college savings plan. No Cash Holdings: neither holds your assets in cash, instead investing whatever you deposit into securities. 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. Click here to read our full methodology. Because you'll be cashing out sooner as you get closer to retirement, robo-advisors will automatically start to make you more conservative with your cash as you get older. For both firms, there are management fees associated with the underlying ETFs, which add an additional 0.10%-0.25% to your costs. These are the only investment choices traders with the two firms have, and even worse, not all ETFs are available. 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. If you’re falling behind on meeting a goal you’ve set, you’re encouraged to put more aside. These are invisible to you, though, as they are assessed by the ETF providers. A Summary of Betterment vs. Wealthfront. 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. Your asset allocation is displayed in a ring with equities in shades of green and fixed income in shades of blue. Wealthfront and Betterment were very close across our rankings. Wealthfront’s retirement planning takes Social Security projections into account. It's hands-off investing. Clients will appreciate this automated reallocation because most investors don’t have the time or dedication to implement these techniques on their own. Let's get the easiest comparison out of the way first. Betterment vs. Wealthfront Betterment review 2020 — the final word Investing your money is one of the best ways to save for retirement and build future wealth, and a robo-advisor like Betterment makes it easy for investors to put their money in personalized portfolios. The key difference between Wealthfront and Betterment is the options offered by each platform; Wealthfront does not offer goal based savings whereas Betterment offers goal based savings. Betterment doesn't have an account minimum. 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. 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. Not all robo-advisors offer the same services and accounts. Portfolios gets more conservative as the target date approaches, with the goal of locking in gains and avoiding major losses. Only digital consultations are included with this plan. (Note: investments may not meet standard requirements for this theme. 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. Features & Tools. Instead, robo-advisors handle your investments for you with little human intervention. That said, Wealthfront provides a full whitepaper that shows how robust their methodology is in dealing with taxable events. In my opinion, Wealthfront's $500 minimum isn't much different for the average reader who's serious about investing. Betterment offers socially responsible investing, where your money gets put into accounts that meet certain social and environmental standards. Betterment vs Wealthfront | The Robo-Advisor Matchup. Premium account offers unlimited access to certified financial planners. Wealthfront has a 529 college savings plan, while Betterment doesn't. 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. Now let's take a more detailed look at how the two compare. If you have $100,000, you can use Wealthfront's PassivePlus program, which includes stock-level tax-loss harvesting. Many of the robo-advisors also provided us with in-person demonstrations of their platforms. When it comes to fees, both Betterment and Wealthfront start at a very affordable annual fee of 0.25%. Betterment vs Schwab Intelligent Portfolios — Overview Both Schwab Intelligent Portfolios and Betterment are goals-based robo-advisors, which makes them seem more similar than they are. Personal Capital: Investment performance conclusion The three wealth managers all came within 1% of each other over the five year period for average annualized returns. The premium plan charges a higher annual fee -- 0.4% instead of 0.25% for a regular account -- and you'll need at least $100,000 to get started. 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%. Since robo-advisors have computers managing your portfolio -- not humans -- they can charge you lower fees than a traditional adviser. There's no minimum to start, which means if you have a few extra dollars in your pocket, you have more than enough to open an account right now. However, for large account customers with … College planning gets extremely granular, with forecasts of tuition and costs at thousands of U.S. universities from the Department of Education. Betterment doesn’t directly carry SIPC insurance, but trades are cleared through Apex Clearing, which has risk management tools in place. But more money could bring you more options with Wealthfront. 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. 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. Betterment, Wealthfront, etc. Accounts over $100,000 are eligible for a stock-level tax-loss harvesting service, and those over $500,000 can opt into the Smart Beta program, which re-weights the holdings in your portfolio using Wealthfront’s proprietary system. We collected over 300 data points that weighed into our scoring system. That said, for the majority of investors we believe Betterment will be the better option. Get started. Traditional IRA, Roth IRA, SEP IRA, 401(k) Rollover, 529 College Savings, Individual, Joint, Trust, Traditional IRA, Roth IRA, SEP IRA, 401(k) and 403(b) Rollovers, Individual, Joint, Trust. If you are looking at investing in securities, but don’t want to pay the fees to hire a professional to manage your investments, consider a robo-advisor. Betterment vs Wealthfront Tax-loss Harvesting Both Betterment and Wealthfront enable tax-advantaged investing through tax-loss harvesting. betterment vs wealthfront: portfolio Whether you sign up for Betterment or Wealthfront, the Robo-advisor will surely ask you a series of questions to look into your investment need. If you have more than $100,000 in your Wealthfront investing account, you can choose a stock portfolio rather than portfolios of ETFs. Both firms have tight security on their web platforms, and offer two-factor authentication as well as biometric logins on their mobile apps. Before diving into the Betterment vs. Wealthfront debate, it’s important to learn about robo advising and … Final Verdict: Betterment vs Wealthfront vs Personal Capital All three robo-advisors discussed above offer similar services – steady returns on capital investment with minimal input required from the user. You can also put some companies on a restricted list if you’d rather not invest in them. Betterment and Wealthfront both have a small minimum deposit, with Betterment being nothing and Wealthfront being just $500. Wealthfront has a 529 college savings plan… Betterment vs Wealthfront is the proverbial clash of the robo-advisor titans. Set-it-and-forget-it is a fair description of what it feels like to invest using Betterment, Wealthfront, or Personal Capital. Since Wealthfront has a $500 account minimum, this puts Betterment ahead of Wealthfront in our Betterment vs Wealthfront comparison. ), 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 has very easy-to-follow steps for setting a goal, and each one can be monitored separately. Top robo advisors comparison – Betterment vs Wealthfront. Investopedia requires writers to use primary sources to support their work. Betterment, the online investing adviser, debuted a high-yield savings account in July. 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. For investors who want to take their portfolios up a notch, this might be enticing. If you're looking to get started today with a few dollars, Betterment might be a better option for you. Wealthfront and Betterment both follow Modern Portfolio Theory (MPT) to populate a diversified portfolio of ETFs representing different asset classes. All of this can be done without talking to a human. Most support questions posed on the Wealthfront Twitter account are answered relatively quickly, though we saw one that took more than a week before there was a response. Two of the leading companies in the robo-advisor industry are Betterment and Wealthfront. Betterment vs. Wealthfront: Minimum Deposit. Wealthfront. 500,000+ users manage their money with the company that started the category—Betterment. 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% … Cost—Winner: Depends. Both Betterment and Wealthfront offer their basic service at a 0.25% annual fee.. Betterment also offers an optional Premium service to those with $100,000 or more at a 0.40% annual fee. While these two online companies provide similar services, there are a few key differences worth … Betterment also offers a cash account for which you'll need a minimum deposit of $10 -- it currently has a competitive APY (annual percentage yield ) of up to 0.30%. How Wealthfront, Betterment and others manage your money. Or you can talk to a pro for at least $199 if you don't meet the premium account minimum. If you're looking to save for college, a Wealthfront account might be where you put your money. The offers that appear in this table are from partnerships from which Investopedia receives compensation. "What Is SPIC Insurance?" Wealthfront has a single plan, which assesses an annual advisory fee of 0.25% with a minimum of $500. For those who want human interaction, Betterment has a … Aside from not needing a minimum balance to get started, Betterment has experts on-hand for tailored advice. Both choices shine in different ways, as well as some similar ones: They both feature tax-loss harvesting and automatic rebalancing. Robo-advisors tend to have lower fees than online brokerages or accounts where you micro-manage your money. Wealthfront and Betterment are well-matched in terms of features, but there are some important differences. Betterment vs Wealthfront – Comparing Features. Read more: Diversity isn't a priority for investors, report finds. 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