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Wealthfront Review

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1 Minute Review

Wealthfront is an integrated wealth-building platform. It brings long-established investment strategy and state-of-the-art financial planning and investment management technology together to simplify the science of money-making.

You can bank, invest, borrow and plan from the convenience of your smartphone. Wealthfront optimizes every deposit to help you make more money from every account.

Best For

  • Long-term investors
  • Anyone who wants to manage their financial control panel from a smartphone
  • Investors with enough capital to get the full benefit of Wealthfront technology

Pros

  • All-in-1 digital financial management
  • Money intuitively diverted to your various checking, investment and savings accounts by priority and financial need
  • Low fee or fee-free accounts

Cons

  • No direct relationship with a human advisor
  • Not best for those who can’t keep much money in their banking and investing accounts
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Overview of Wealthfront

Wealthfront optimizes every cent of each deposit you make with its Self-Driving Money concept. When your paycheck or other deposit hits your account, Wealthfront’s technology splits your funds between spending, savings and investments according to your financial needs. 

You can fully automate paying your bills, saving for emergencies or a large purchase and building your wealth for now and later with long-term investments using Wealthfront.

Wealthfront directs the flow of your money intuitively, making sure all your bills are paid before funneling your money into your savings or retirement accounts.

Services Offered

Banking

Wealthfront partners with Green Dot Bank to bring you the Wealthfront Cash Account. This is a fee-free checking account that comes with hefty features and a focus on easy access. 

And your money won’t just sit in this account — you’ll earn a 0.35% annual percentage yield (APY) on your cash balance. 

This account acts as the cornerstone of your integrated Wealthfront financial hub. Open an account for as little as $1. After that, you won’t face any fees or account minimums. 

Transferring money in and out of your account is simple. You can automatically pay bills, make free withdrawals at 19,000 ATMs, digitally deposit and send checks from the app and make digital purchases and transfers with services like Apple Pay and Venmo. And your deposits with Wealthfront are insured up to $1 million with the FDIC.

Investing

Wealthfront’s automated investment technology is rooted in passive investing, a strategy developed by Wealthfront’s Chief Investment Officer, Burt Malkiel. PassivePlus is Wealthfront’s roster of heavy hitting strategies like tax-loss harvesting. 

Using the insights provided by Path, Wealthfront’s digital financial planner, Wealthfront will customize a globally-diversified portfolio using low cost funds. This helps keep your fees low on both your investment portfolio and portfolio line of credit.

Wealthfront uses long-term investments and dynamic investment automation to maximize your money’s potential. The strategy they implement to automate your portfolio management will always seek to minimize your expenses, lower your taxes and mitigate your risk. 

Open an individual, education or investment account. Joint and trust accounts are available as well.

  • Investment account types
    • Retirement
      • Traditional IRA
      • Roth IRA
      • SEP IRA
      • 401(k) rollover
    • Education
      • 529 College Savings
    • Individual Retirement accounts
    • Trust accounts
    • Joint retirement accounts 

Borrowing

  • Not only will your portfolio help build your wealth for your future, it provides a security net for the present when you need credit.
  • As a Wealthfront client with an investment account with a balance of at least $25,000, you have automatic access to a low rate portfolio line of credit.
  • Accessing this line of credit won’t affect your credit or even require a credit check.
  • You can access up to 30% of your account balance with a 30-minute application process and have the cash within 1 business day. 
  • Your portfolio acts as backing for this line of credit, so your rates always stay low.

Financial Planning

Wealthfront wants you to reconsider the notion that you need to pay a licensed expert to guide you through financial planning. Path is its proprietary financial advisor software that will guide you through identifying your financial goals and the best ways to accomplish them. 

Path is free to use for anybody, even if you don’t have an investment account with Wealthfront. Path is able to design strategy and model outcomes of various financial plans for homeownership, retirement, travel and education.

Account Minimums

For the most part, Wealthfront doesn’t require you to keep an account minimum to use their software. Both its banking and investment accounts have a minimum opening deposit.

  • Banking
    • You can open an account with just a dollar, and there’s no account minimum after that.
  • Investing
    • You’ll need $500 to open an investment account with Wealthfront.

Fee Structures and Pricing

Wealthfront’s fee structures and pricing differ between its offerings. Overall, you can expect very few fees and mostly free banking. 

You’ll pay an investment management fee, but it’s relatively low when compared with a traditional financial advisor and is on par with similar online financial management services.

Banking

  • No monthly service fees or account minimum fees
  • No overdraft fees
  • No excess transaction fees
  • No stop payment fees
  • Fee-less transactions at 19,000 ATMs

Investing

  • 0.25% of assets under management advisory fee
  • Wealthfront chooses only low fee funds, which typically charge between 0.06% to 0.13% in fund fees
  • You can calculate what using Wealthfront will cost you with this fee calculator here

Borrowing

A portfolio line of credit is available to investors with at least $25,000 in their individual, joint or trust investment accounts. Your rate will be determined by the size of your account and a few other factors

Planning

Path, Wealthfront’s digital advisor software, is totally free. You can utilize the financial planning service even if you don’t have assets under management with Wealthfront. 

How to Open a Wealthfront Account

Opening an account with Wealthfront takes less than 10 minutes. You’ll answer a few pointed questions to determine your financial needs and your best financial path. 

Once Wealthfront verifies your identity, you can link your external accounts. Here, you’ll fund your cash account and your investment account.

You can sign up here or download their app from the Apple App Store or the Google Play store. 

Wealthfront Investment Style

Wealthfront’s platform combines old school passive investing strategy with its cutting-edge technology to automate your portfolio management.

Wealthfront built its investment strategy around reducing fees, minimizing tax bills and risk management. While these may sound like tried-and-true investment strategy pillars, Wealthfront provides expertly designed financial plans and portfolio mixes — all automated and all from the convenience of your smartphone. 

Instead of wasting hours meeting with a financial advisor, Wealthfront’s technology strategically navigates your finances based on your personal information and intuitive automated investing.

Wealthfront’s has a few extra tricks up its sleeve too. The PassivePlus suite of investing strategies makes sure your financial blueprint does the most for your money as you build your portfolio.

Tax-Loss Harvesting

  • Scans your portfolio every day for ways to smoothly reduce your tax obligation while sticking to your financial plan
  • Available for investment accounts of every size

Stock-Level Tax-Loss Harvesting

  • Pushes tax-loss harvesting further by analyzing U.S. stocks to lower what you pay in taxes as much as possible
  • Available to clients who have at least $100,000 invested

Risk Parity

  • Diversify your portfolio allocation across a wider range of asset classes to aim for higher returns at a given risk level
  • Available for investment accounts with a minimum $100,000 balance

Smart Beta

  • Thoroughly scrutinizes your portfolio and looks at the weighting of your portfolio from every angle
  • Factors in market capitalization, value, momentum, dividend yield, market beta and volatility to intelligently design your weighting strategy

Wealthfront Overall Rating

Wealthfront integrates your banking, saving, investing and financial planning using its intuitive, intelligent software. Save time, money and stress by streamlining your financial life with a digital advisor you can trust. 

It only costs a dollar to open up a Wealthfront checking account. And if you have at least $500 to spare for investing, Wealthfront will start putting every cent of each deposit toward building financial security. 

Get started today by visiting Wealthfront here or by downloading the Wealthfront app.