TRENDING. 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. However, for large account customers with … Betterment: 0.25% – 0.40% annual fee; Wealthfront: 0.25% annual fee; Betterment offers two tiers of service. The comparison between the two biggest robo-advisors is like the clash of heavyweights inside a boxing ring with investors sitting in the front row. These two have a track record in the industry and pioneered many of the features that have become standard for robo-advisories. If you're looking to save for college, a Wealthfront account might be where … Wealthfront’s goal planning is the best of all the services we reviewed this year, with very specific ways to forecast your financial needs. "What SIPC Protects." Larger accounts at Wealthfront qualify for additional services. All of this can be done without talking to a human. Thanks to its stock-level tax harvesting strategy, investors can get an edge over Betterment in the long-term. 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. Betterment vs. Wealthfront Investment performance conclusion Based on the numbers above, Betterment has an average annual investment return of just under 8.8%. 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 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. 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. Betterment vs. Wealthfront Both founded in 2008, Betterment and Wealthfront are two of the first robo-advisors, or investment platforms to offer automated investment advice. Wealthfront is at 7.62% on its taxable portfolios, and 8.52% on its tax-advantaged portfolios. Otherwise, Wealthfront offers a more or less identical investing service to Betterment. Betterment vs. Wealthfront – Similarities. 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. Robo advising is a relatively new service that many people thought would fail in the initial stages. One of the features many investors get most excited about with Betterment is tax-loss harvesting. 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. 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. The post Betterment vs. Wealthfront: Which Is Best for You? The methodologies are likely very similar, swapping in comparable assets for a loss to offset gains elsewhere. That said, Wealthfront provides a full whitepaper that shows how robust their methodology is in dealing with taxable events. These include white papers, government data, original reporting, and interviews with industry experts. Both platforms help investors to craft diversified portfolios and use automated investment strategies to meet their goals. Betterment vs. Wealthfront. 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 requires writers to use primary sources to support their work. Both Betterment and Wealthfront have an asset management fee of 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. What is a Robo-advisor? 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 – two of the oldest and most reputable Robo-advisors, but which one should you choose? You can even figure out how long you can take a sabbatical from work and travel, while still making your other goals work. Once you reach $500,000, you can join the more powerful Smart Beta product. Ed is … In addition, Wealthfront requires a $500 minimum deposit to open a new account. Betterment guarantees strong browser encryption, stores their data on servers in a secure facility, and safeguards … 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). … Accessed Sept. 5, 2020. Wealthfront vs. Betterment: At a Glance Wealthfront is an online financial advisor based in California’s Silicon Valley. Betterment states on their website that the digital plan is suitable for most investors. 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. Betterment, the online investing adviser, debuted a high-yield savings account in July. Betterment has no minimum deposit, whereas Wealthfront's minimum deposit is a $500 minimum. Wealthfront’s methodologies are laid out extensively, so a relatively experienced investor can have a high degree of comfort giving up the human option. Betterment doesn’t directly carry SIPC insurance, but trades are cleared through Apex Clearing, which has risk management tools in place. Wealthfront Another difference is in the fees. You’re shown the exact portfolio prior to funding your account, but you cannot customize the pre-set portfolio at all. Betterment and Wealthfront both charge an annual fee of 0.25% for digital portfolio management. Betterment and Wealthfront both take pride in their security and offer two-factor verification. Both Betterment and Wealthfront offer high yield savings accounts. Their offerings in terms of features are almost similar and standard to all Robo-advisor designs. While Betterment and Wealthfront invest in similar index funds, a few minor differences are worth pointing out. Management Fees: Wealthfront charges management fees between 0% – 0.25%. We also reference original research from other reputable publishers where appropriate. Betterment has very easy-to-follow steps for setting a goal, and each one can be monitored separately. Wealthfront’s retirement planning takes Social Security projections into account. You can also put some companies on a restricted list if you’d rather not invest in them. Robo-advisors—online investing platforms that seek to emulate the services of a financial advisor—are growing in popularity. "What Is SPIC Insurance?" Here is what you need to know about how Betterment and Wealthfront manage your money. 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