That said, for the majority of investors we believe Betterment will be the better option. Costs associated with trading could impact actual client performance. Wealthfront only uses 11 asset classes to create portfolios. Specifically, Betterment selects “low-cost, highly liquid, index-tracking ETFs to ensure clients gain the desired asset exposure at the lowest total cost of ownership.”. Your risk tolerance and goals influence your portfolio composition on Betterment and Wealthfront. Fees vary between Betterment’s Digital and Premium account types. We often partner with companies we believe are aligned with this priority. Wealthfront is perfect for: Higher net worth individuals who can make use of stock-level tax-loss harvesting or Smart Beta. But Betterment has more advanced functionality such as direct real-time contact with financial advisors via encrypted text messaging, spousal tax loss harvesting, and tax coordinated portfolios. The difference between Wealthfront and Betterment depends on a number of factors such as the fee structure, availability of goal based … However, as mentioned, each robo advisor takes a slightly different approach in their investment philosophy. So we have no clear winner here. Offers Portfolio Line of Credit which allows you to stay invested in the market while still meeting liquidity needs as they arise, similar to a HELOC. Verdict – Wealthfront. The entire point of investing is to put your wealth to work. Millions of Americans who don’t have the time or financial acumen to build and monitor an investment portfolio are turning to robo advisors for good reason. The results shown below are of a 8.0 risk score portfolio, which contains a similar mixture of U.S. stocks and international/developing market stocks. However, Wealthfront emphasizes creating a diversified portfolio, and offers a more diverse range of asset classes compared to Betterment. Specifically, Wealthfront uses asset classes such national resources and real estate trusts in their asset class mix, giving investors a wider range of asset classes to utilize. Betterment vs Wealthfront 2020 – Which Robo Advisor Is Best? Supports 529 college savings plans which is useful for parents preparing for their children's education. As with Betterment, Wealthfront utilizes index-based ETFs in their portfolio composition, selecting low-cost investment funds to help keep expenses low. Wealthfront charges the same 0.25% annual advisory fee that Betterment charges, but it also charges a fund fee of 0.07% to 0.16%, depending on the funds your money goes into. Their methods for tax harvesting are similar, … Like Betterment, Wealthfront focuses on minimizing fees, lowering taxes, and managing risk for their investors. Our articles, tools, and analysis contain information and data to help you conduct research but are not intended to serve as investment advice. Further their websites don’t make it easy to see historical performance at certain risk levels or asset allocations over time. Cooper is a former equity research professional/finance analyst who holds an MBA in Financial Instruments and Markets from New York University's Stern School of Business. How Much Should I Have Saved For Retirement At My Age? At WealthFam, our top priority is helping readers improve their financial lives. ... reading this blog and doing my own research I get wrapped up in the back and forth comparisons between accounts with Betterment vs Wealthfront vs … Premium is available for minimum account … Betterment: 0.25% – 0.40% annual fee Wealthfront: 0.25% annual fee Betterment offers two tiers of service. Allowing the first $5,000 to be … While the added fees are greater than DIY investing, the added benefits such as tax-loss harvesting may be worth the added cost. Tax-loss harvesting involves selling a security that has experienced a loss in order to offset taxes on gains and income. Betterment’s research claims that its tax loss harvesting on average improves your return by 0.77%. Wealthfront is slightly better for you in terms of fees; even though Betterment has the same fee amount, because Wealthfront waives its fees on the first $10,000 so you'll pay slightly less. Betterment has no minimum initial investment compared to $500 for Wealthfront. Today we’ll compare two robo advisor titans in our Betterment vs Wealthfront breakdown. For those who want human interaction, Betterment has a second tier, Betterment … Some links herein may be from our partners. SmartDeposit strategically takes extra cash you might accrue in your account and puts it to work for you, capped at a certain amount to make sure you still have more than enough to pay your bills. We wish all investor platforms were this easy. It tracks the performance of the S&P 500 index (this is an index comprised of the 500 largest publicly traded US companies). To read more about how we make money & select partners, The Rise of Robo Advisors – Betterment & Wealthfront At A Glance, Betterment vs Wealthfront – Quick Features, Betterment vs Wealthfront – Comparing Features, Betterment vs Wealthfront – Investment Performance, Final Thoughts | The Winner of Wealthfront vs Betterment. Wealthfront's fees are 0.25%; Betterment's fees are 0.25-0.40%. It's like automatic deposits (but more flexible) which can be useful for people who don't have a steady income like freelancers or salespeople earning variable commission. This is an undeniably bold statement. Asset Risk Consultants analyzed more than 30,000 time periods, comparing Betterment portfolios to advisor-managed portfolios. To objectively compare Betterment vs Wealthfront vs Acorns, I’ve come up with three main rounds the services will … Hello! But ultimately, there isn’t a ‘right’ answer to the Betterment vs Wealthfront debate. Verdict – Betterment. Verdict – Betterment. They have lower minimums, a simpler investment philosophy, and a beautiful platform that users love. We’re splitting hairs here to some degree and would be comfortable in either robo advisor but prefer the simplicity of Betterment. ETF stands for “exchanged traded fund”. For the majority of investors we think Betterment is the superior option. Your level of risk tolerance and investment time-frame will be the main factors that influence your investment performance. Save my name, email, and website in this browser for the next time I comment. Users start by completing a short questionnaire that asks questions about age, annual income, risk tolerance, and investment goals. Betterment caters to lower net worth individuals and has some unique features such as access to socially responsible investing. 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