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How Betterment, Wealthfront and Wealthsimple Compare

Oct. 28, 2020
Advisors, Investing
How Betterment, Wealthfront and Wealthsimple Compare
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The growing popularity of robo-advisors means sifting through more offers to automate your investment savings, but which one is the best for you?

Betterment, Wealthfront and Wealthsimple are three of the best robo-advisors, but each company differentiates its offerings in some notable ways.

Some factors that may make a difference in your choice: How much money do you have to start with? Is socially responsible investing, or being able to invest according to your beliefs, important to you? Do you want to also have access to a human financial advisor? (We’ve written a primer if you want to learn more about how robo-advisors work.)

All robo-advisors use passive investing strategies, which studies show often lead to higher overall returns. Better yet for the consumer, you can start investing with a robo-advisor without knowing much about how markets work.

Betterment at a glance

Account minimum

$0 for Betterment Digital, $100,000 for Betterment Premium.
Account management fee

0.25% for Betterment Digital, 0.40% for Betterment Premium.
Investment expense ratios

ETF expense ratios range from 0.07% to 0.17%.
Account fees (annual, transfer, closing)

None.
Portfolio mix

  • Standard portfolio uses ETFs from about 12 asset classes.
  • Socially responsible investing, smart beta and target income portfolios available.
  • Ability to adjust percentage of portfolio in each investment.
Accounts supported

  • Individual and joint nonretirement accounts.
  • Roth, traditional, SEP and rollover IRAs.
  • Trusts.
  • Ability to link external accounts for personalized advice (but not direct management).
  • Cash account (not charged management fee).
Tax strategy

  • Daily tax-loss harvesting on all taxable accounts.
  • Tax-Coordinated Portfolio tool allocates assets across retirement and taxable accounts according to tax impact.
  • Tax Impact Preview tool warns about the tax effect of making portfolio changes.
  • Charitable giving tool makes it easy to donate appreciated assets.
Automatic rebalancing

Free on all accounts.
Human advisor option

Betterment Digital doesn't offer access to financial advisors. However, for a fee, you can buy an advice package that includes a consultation with an advisor.

Betterment Premium customers get unlimited telephone calls with a team of certified financial planners.
Tools

Numerous tools and calculators to help set goals, choose the right accounts and make money decisions.
Savings account/cash management option

High-yield savings with FDIC insurance up to $1 million and unlimited transfers.
Customer support options (includes website transparency)

Phone and email support Monday-Friday 9 a.m.-6 p.m. Eastern time. Email only on Saturdays and Sundays 11 a.m.-6 p.m. Eastern time.
PromotionNerdWallet users get up to 12 months of free management: deposits of $15,000 to $99,999 get one month free; $100,000 to $249,999 get six months free; $250,000+ get one year free.

If you refer a friend and that person funds an account, you both get $5,000 managed free for one year.

» Read NerdWallet’s full Betterment review

Wealthfront at a glance

Account minimum

$500
Account management fee

0.25% (first $5,000 managed free for NerdWallet readers).
Investment expense ratios

ETF expense ratios average 0.08%.

Portfolios that include the Wealthfront Risk Parity Fund may have an overall expense ratio of 0.11%.
Account fees (annual, transfer, closing)

None.
Portfolio mix

ETFs from 11 asset classes (portfolios generally consist of 6 to 8). Individual stocks held in larger accounts.
Accounts supported

  • Individual and joint non-retirement accounts.
  • Roth, traditional, SEP and rollover IRAs.
  • Trusts.
  • 529 college savings plans.
  • Cash account (not charged management fee).
Tax strategy

  • Daily tax-loss harvesting on all taxable accounts.
  • Stock level tax-loss harvesting on accounts over $100,000.
  • Smart beta on balances over $500,000.
  • TurboTax customers can easily import tax-loss harvesting data from Wealthfront.
Automatic rebalancing

Free on all accounts.
Human advisor option

None.
Tools

  • Robust and free financial-planning tools (available even if you don't have a Wealthfront account) to help plan for life events, including retirement, home purchase, college and extended travel.
  • Ability to link outside accounts.
  • Portfolio line of credit also available.
Savings account/cash management account

High-yield savings account with up to $1 million in FDIC insurance and no fees.
Customer support options (includes website transparency)

Phone support Monday-Friday 10 a.m. to 8 p.m. Eastern; email support.
PromotionNerdWallet readers get free management on the first $5,000 invested. Refer a friend and you both get an extra $5,000 managed free.

» Read NerdWallet’s full Wealthfront review

Wealthsimple at a glance

Account minimum
$0
Account management fee
0.5% for balances $99,999 and less.
0.4% on balances above $100,000.
Investment expense ratios
0.09% - 0.12% on standard portfolios.
0.25% on SRI portfolios.
Account fees
None
Portfolio mix
Between 6-10 ETFs covering up to 10 asset classes in standard portfolio. Around 50 individual stocks for halal portfolios and 6 ETFs in SRI portfolio.
Accounts supported

Taxable individual and joint accounts; IRAs (traditional, Roth, SEP); trust and custodial (UTMA and UGMA).
Tax strategy
Free for all customers; available by request.
Automatic rebalancing
Proprietary threshold-based rebalancing methodology. Free on an as-needed basis.
Human advisor option
All customers have access to a team of financial advisors. Wealthsimple Generation clients get two dedicated advisors.
Tools
Free portfolio review; simple retirement calculator.
Savings account/cash management account option

Wealthsimple Smart Savings, with return above 1% net of management fee.
Customer support options (includes website transparency)
Phone or email Monday-Thursday 8 a.m.-8 p.m., Friday 9 a.m. - 6 p.m. Eastern.
Promotion First $10,000 managed free for one year for NerdWallet readers (new clients only). Free consultation for new customers.

» Read NerdWallet’s full Wealthsimple review

Final look

Choosing among the best advisors means looking at what features, functions and fees best suit your investing needs. You can also compare these three against others among the best robo-advisors.

Regardless of which you select, the winning choice is the decision to invest toward building your future wealth.

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