People’s Experience While Using Wealthfront – Wealthfront Review

Robo-advisor Wealthfront has a lofty-sounding name, but it’s one of the more accessible products I’ve come across, even for investors like me who are still daunted by the idea of “building wealth.

People's Experience While Using Wealthfront, Wealthfront Review.  With Wealthfront, you don’t need a huge nest egg or a ton of experience to get started.
People’s Experience While Using Wealthfront, Wealthfront Review.

With Wealthfront, you don’t need a huge nest egg or a ton of experience to get started.

Investors can start with as little as $500, and the app focuses on passive investing—a “buy and hold” strategy that minimizes trading and maximizes long-term gains.

Wealthfront diversifies your portfolio for you, which is ideal for hands-off investors who like to trade cautiously.

The refreshingly low fees make Wealthfront a great spot for simple needs, like growing savings or planning for retirement. But the perks multiply once you hit higher investing levels; Wealthfront’s tax reduction strategies for large accounts is impressive. And Wealthfront has a robust suite of services for everyone, including college savings options and free goal-based financial planning.

I find Wealthfront to be worth it for the planning tools alone, which provide down-to-earth, flexible advice for different situations.

What is Wealthfront?

Wealthfront is designed for young professionals, anyone from passive investors who want expert digital guidance, to people who want to be smarter with money. Investment management is automated but strategic—and tuned in to your individual risk level.

Founders Andy Rachleff and Dan Carroll wanted everyday people to get the benefits of top-tier financial advice usually reserved for the wealthy.

The Wealthfront staff has plenty of expertise to go around. Chief Investment Officer, Burton Malkiel, wrote A Random Walk Down Wall Street, the financial guide that made passive investing popular.

How does Wealthfront work?


When you sign up you enter some basic info, including your pre-tax income and savings. Then you choose your investment goal — a high-interest cash account, long-term investing, retirement, or college savings. Start with one goal and add others later.


If you’re just looking for advice, Wealthfront has you covered. I found this feature thoughtful; the site walks you through how to save for life milestones. Spoiler alert: if you say you’re not sure where to start, Wealthfront recommends saving for retirement first.

If you’re ready to get set up as an investor, Wealthfront asks a few questions to determine your comfort level with risk. They’ll use this information for your personalized investment portfolio.


Next Wealthfront asks what you’d prefer to do in a market downturn if your portfolio lost 10% of its value in a month.

From there Wealthfront measures your risk tolerance on a scale of one to 10. I got a score of three, which makes sense since I’m a risk-averse person where investment is concerned. The site does allow you to change your answers if you’re not confident in the result.

As with most robo-advisors, you’ll link any financial info (such as a checking account) and assets you want to be connected to your investment plan. Since TurboTax partners with Wealthfront, TurboTax users can transfer info quickly.

How Wealthfront manages your portfolio

Wealthfront’s algorithms really know how to diversify, which is super helpful if you’re an investing novice. They’ll divide a portfolio between six to eight asset classes, including U.S. and foreign stocks, dividend stocks, real estate, government, and corporate bonds, and inflation-protected securities. Wealthfront primarily uses low-cost exchange-traded funds (ETFs). Investors who hit six figures can opt for a stock portfolio.

Once Wealthfront learns how much risk you can handle and customizes your portfolio, the asset allocations remain the same no matter how much money is in your account. Their software readjusts as needed through a technique called threshold-based rebalancing; once an asset crosses a predetermined “threshold” Wealthfront re-allocates your investments. They’ll also move assets around when the market fluctuates, dividends get reinvested, or money is deposited or withdrawn. You can change your risk score, though it takes time for Wealthfront to switch your assets accordingly.

Their goal is to minimize taxes. Though you may not see short-term capital gains, you’ll get your money’s worth come tax time from Wealthfront’s daily tax-loss harvesting — a service available to all investors.

Pricing for Wealthfront

Several Wealthfront options, including financial planning and advice, come with no fees at all if your balance is under $10,000. If you want Wealthfront to manage your investments you’ll pay a reasonable, competitive monthly fee, plus an annual fee for exchange-traded funds.

Service Cost
Cash and retirement accounts under $10,000 Free
Account transfers and closing Free
Automatic rebalancing Free
Path financial planning tool Free
Cash account minimum $1
Investment account minimum $500
Withdrawal minimum $250
Monthly account management for all investors over $10,000 0.25% of total assets
Annual risk parity fund fee 0.25% of total assets
Annual fee for exchange-traded funds (ETFs) 0.07%—0.16% of total assets

Optional services that kick in after you’ve invested six figures, like Smart Beta, may charge slightly higher fees.

Wealthfront features

Path investment management

Path, Wealthfront’s (totally free!) financial planning service, shows where your finances stand and carve a “path” towards the future with a focus on retirement. You don’t need an investment account to use Path, though you will need to share your financial info.

Data analysis is one of Wealthfront’s specialties, and your account data is combined with third party algorithms to predict possible future outcomes. How much should you add to your savings account? When should you retire, and can you maintain your current lifestyle in retirement? What will your net worth be in ten years? How long can you afford to take a sabbatical? Are you on track to buy a house or pay for college? Path helps you plan ahead for multiple contingencies. And if a goal seems unreachable, Path will look at your finances and see how you can get there.

Essentially Path is a free personal financial advisor without the “person” aspect. Available on mobile or desktop, it makes Wealthfront one of the only advisors in the robo-advisor world to offer free financial planning. Even if you don’t keep your primary account at Wealthfront, Path is worth a look. If you do use Wealthfront’s other services, Path data is integrated across the board.

Homebuyers’ planning

Whether you’re actively on the market or thinking far into the future, Wealthfront has advice tailored to your home-buying situation. Path’s home-planning section figures out what you can afford and lets you adjust your time frame. You can even go virtual house-hunting right on Wealthfront.

The app partners with real estate heavyweights Zillow and Redfin. Because of this, shoppers can check home values across the country. If and when I decide to purchase a home I’ll need a service like this!

Travel planning

The Time Off for Travel feature helps you budget in advance for vacations or extended leaves. This tool can be invaluable for anyone planning a major absence from work—parental leave, for instance—or checking countries off their explorer bucket list.

Tailored transfers

This is an almost-unheard-of perk for small-time investors, and Wealthfront’s one of the only robo-advisors to offer it. Account-holders moving their investments from another brokerage account can transfer their investments over time into a diversified portfolio, rather than selling all their holdings at once.

Retirement savings

Not surprisingly, Wealthfront advocates its investors save for retirement. You can open traditional, SEP, and Roth IRAs; they’ll also accept IRA or 401(k) rollovers. Even if you keep your retirement funds elsewhere, Path will analyze your spending and savings — and other relevant data, including projected inflation and Social Security — to make sure you’ve got enough cash when the time comes.

College planning

Don’t skip this feature if you’re building a child’s college fund (start when the kid’s a baby!) or saving up for school yourself.

Just like with retirement planning, Wealthfront’s College Planning tool balances your savings goals with the cost of college and adjusts for inflation.

Once you’re picking out schools, you can connect to every US college and university through Wealthfront. They’ll link up with the school’s financial aid office and calculate how much aid you’re likely to receive.

529 College Savings Plan

It’s unusual for a robo-advisor to offer this tax-free college savings investment. Wealthfront’s 529 plan comes with no fees on your first $5,000 and a monthly fee up to 0.46% thereafter.

Though the fee is high for a Wealthfront feature, it’s low compared to the cost of 529s elsewhere. And Wealthfront handles the account management and recommends a savings goal. Residents of Nevada, where Wealthfront’s 529 plan is located, get a bonus $20,000 managed for free.

One caveat about the 529 plan — you may save money getting a state-sponsored 529 if your state offers one. Many states give tax deductions or credits if you contribute to a state plan, so see if that’s an option first. (Unless you’re in Nevada, in which case Wealthfront’s 529 is a steal.)

Cash account

Robo-advisors have been offering bank-style services for a while. Wealthfront joins the trend with their cash account — they claim it isn’t a savings or a checking account, just a place to earn interest on the money you don’t want to invest. And you’ll earn quite a bit of interest; the account has an impressive 0.35% APY. You can opt for an individual account, a joint account, or a trust. All accounts are FDIC insured up to $1 million. That’s four times more insurance than the average bank provides.

The account carries no fees and doesn’t charge for transfers. You can open a cash account with $1, making it one of Wealthfront’s more affordable offerings. If you’re paying for an investment account as well the fee won’t apply to money in your cash account.

Portfolio line of credit

Once your investment account hits $25,000 you’re eligible for a portfolio line of credit. You can borrow up to 30% of your account’s value. If you have a Wealthfront account you’re eligible; you don’t need the hassle of a further credit check, and your credit score won’t be impacted. Interest rates fluctuate based on market value, starting at 3.60% plus the federal rate.

Though you can often pay the loan back on your own time, there’s a margin risk — you may have to repay more quickly if your investment value drops.

Tax-loss harvesting

The tax-loss harvesting technique is something only the savviest of us should try at home — it’s one task I’m happy to give to a robo-advisor. Tax-loss harvesting sells any assets that drop in value. The sales lower investors’ overall tax bills, since tax equations balance gains with losses. In the long term, you’ll maximize your gains.

Other tax minimization strategies

If you’re transferring assets as a new client Wealthfront makes sure the new assets are compatible with your portfolio. It holds onto securities with short-term capital gains until the gains become long-term.

Capital gains taxes can be a big headache for investors. Wealthfront lowers them by rebalancing your portfolio consistently to minimize sales, offering the option of index funds with lower turnover, and optimizing the after-tax potential of both taxable and retirement accounts.

Stock level tax-loss harvesting

Available to investors with $100,000 or more in a taxable account, stock level tax-loss harvesting — also known as direct indexing — takes regular tax-loss harvesting to the next level. Wealthfront creates a tailored index fund for you by purchasing individual stocks and ETFs from the U.S. Stock Index.

More stocks mean more opportunities to harvest losses, and Wealthfront software keeps an eye on your stocks’ performance. The number of potential stocks increases with the size of your account—up to 100 stocks for a $100,000 minimum, up to 500 with a $500,000 minimum, and up to 1,000 if you hit $1 million.

Smart Beta

For big-time investors with at least $500,000 Wealthfront offers the “Smart Beta” service to give your returns a bump over the market indexes. The software looks at factors impacting your stocks’ performance, like volatility, and does what it can to increase returns. Many robo-advisors offer Smart Beta or something similar, but gains are especially lucrative when paired with Wealthfront’s tax-loss harvesting and low fees.

Wealthfront combines all its levels of tax-loss harvesting into its “PassivePlus” plan.

Risk parity fund

Investors with $100,000 or more can opt into the Risk Parity mutual fund, which aims for higher risk-adjusted returns through more exposure to asset classes. It uses a higher expense ratio than other Wealthfront funds and adds an extra annual fee (which only increases your overall fees by about 0.05%). Right now Wealthfront doesn’t offer this option for retirement accounts.

Customer service and help center

Wealthfront’s customer interactions are almost all electronic. The extensive Help Center answers commonly asked questions, and account holders can use a phone line Monday-Friday between 10 AM-8 PM Eastern time. But there’s no online chat feature or in-person advisor.

According to co-founder Andy Rachleff, customers want a fully digital service, and they’ll pay to avoid human interaction. I prefer automation myself, but I like talking to a human if I have questions or concerns. Wealthfront seems to offer both choices, which is nice.

Debit cards and “Self-Driving Money” (in the near future)

Ultimately, Wealthfront wants to replace your bank. They’re planning to roll out debit cards, direct deposits, and automatic bill payments sometime in 2020. Afterward, they hope to simplify customers’ lives by combining all their services on one platform known as Self-Driving Money. The idea is that Wealthfront will handle all your payments and investments, letting its algorithms do the “driving” for you.

My experience using Wealthfront

For me, the financial advice and planning sections were the biggest perk of Wealthfront. Like most of us, I’m juggling a few goals including saving for retirement, and I’m glad Wealthfront can help keep me on schedule.

In terms of investing, I’d prefer socially conscious investing options as a major part of my portfolio, which doesn’t seem to be a priority with Wealthfront. And though I manage my money digitally, I’d love the option of a human financial advisor. The low minimum account balance is enticing, but I’ll keep shopping around.

Who should use Wealthfront

Investors with small balances or beginning investors

Not every robo-advisor offers personalized portfolio management for accounts with $500 balances. And new investors benefit from expert advice.

Investors with balances of $100,000 or more

At the other end of the spectrum, Wealthfront’s higher-balance users grow more wealth and pay fewer taxes through the PassivePlus plan.

Passive investors

Wealthfront does the work for you using Modern Portfolio Theory, so you won’t have to select or keep up with individual securities.

Goal setters

The planning arm of Wealthfront is designed to consider your financial big picture. The Path feature balances multiple savings goals, crunches the numbers, and helps you prioritize.

Who shouldn’t use Wealthfront?

Active, hands-on investors

Wealthfront investors don’t pick their own stocks. Another advisor may work better if you’d rather self-direct your portfolio.

Anyone who wants a human financial advisor

With Wealthfront’s digital focus and further plans for automation, they don’t seem to be incorporating human advisors anytime soon.

Pros & cons


  • College planning — College savings should be integrated into long-term financial plans, but they can be easy to forget if college is years away. Wealthfront’s built-in tools help you stay on task.
  • Tax-loss harvesting — Wealthfront makes sure fees and taxes don’t eat too much into your profits.
  • Automated management — Outsource your portfolio to expert algorithms designed to maximize gains.
  • No-fee cash accounts — Any no-fee, interest-earning account gets a thumbs up in my book.


  • Inability to customize portfolios — Some robo-advisors let you pick specific investments, but Wealthfront limits your direct control.
  • No fractional shares — Wealthfront doesn’t buy fractional or partial shares of ETFs, which means you may have some non-invested cash sitting around for a while.

Wealthfront vs. Betterment

Feature Wealthfront Betterment
Best for Financial planning Competitive pricing
Minimum balance $500 (for investment accounts), $1 (for cash account) $0
Fees 0.25% annually (for investment accounts), 0.42%-0.46% (for 529 plans) 0.25% annually (for digital plan), 0.40% annually (for premium plan)
Checking and savings accounts Cash account — 0.35% APY Cash account — 0.40% APY
Financial advice Free $199-$299 for advice packages
Investment accounts Individual and joint accounts, trusts, traditional, Roth, and SEP IRAs, 401(k) rollovers, 529 plans Individual and joint accounts, trusts, traditional, Roth, and SEP IRAs, 401(k) rollovers, workplace 401(k)s
Investor perks Smart Beta, tax loss harvesting, risk parity fund Smart Beta, flexible and tax-coordinated portfolios, socially responsible investing, financial advisor access (with Premium plan)

Betterment is Wealthfront’s biggest competitor. Its lack of account minimums for the Digital plan makes it a good choice for investors on tight budgets.

Premium plan users get a human financial advisor for the fraction of the price you’d pay to hire someone on your own. And Betterment’s cash accounts come with an unusually high 0.40% APY. Betterment plans to introduce a checking account in the near future — like Wealthfront, they want to replace the bank.


A major player in the competitive field of robo-advisement, Wealthfront makes passive investing easy and lucrative. And its free financial planning component is worth checking out even if you don’t plan to invest.


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