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How Betterment, Wealthfront and Wealthsimple Compare

May 3, 2019
Advisors, Investing
How Betterment, Wealthfront and Wealthsimple Compare
At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

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.)

At a glance

Broker

Highlights

Commissions

Account Minimum

Current Offers

Start Investing

Betterment

Betterment

Show Details

Offers access to human advisors for additional fee.

Commissions

0.25%

management fee

Current Offers

Up to 1 year

of free management with a qualifying deposit

on Betterment's secure website

Show Details

Wealthfront

Wealthfront

Show Details

Free management of first $5,000 (for NerdWallet readers); advanced tax optimization strategies.

Commissions

0.25%

management fee

Current Offers

$5,000

amount of assets managed for free

on Wealthfront's secure website

Show Details

Wealthsimple

Wealthsimple

Show Details

Socially responsible investments; free tax-loss harvesting

Commissions

0.40% - 0.50%

management fee

Current Offers

$10,000

amount of assets managed for free for one year

on Wealthsimple's secure website

Show Details

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

Betterment requires no minimum deposit to begin investing, and its 0.25% management fee is one of the most competitive in the industry. For those who want to invest in companies whose business practices align with your values, Betterment offers a socially responsible portfolio.

Betterment has a full range of tools for goal-based savings. The firm also offers the purchase of fractional shares so you can invest even if you don’t have enough cash to buy a full share. If advice from human advisors is important to you, Betterment’s premium tier allows unlimited phone calls with advisors, but the service requires a minimum balance of $100,000 and bumps its management fee to 0.4%.

NerdWallet rating

Fees

0.25%

management fee

Account minimum

$0

Promotion

Up to 1 year

of free management with a qualifying deposit

The bottom line

Betterment has maintained its status as the largest independent robo-advisor for a reason: The company offers a powerful combination of goal-based tools, affordable management fees and no account minimum.

Show pros & cons

Pros

  • No account minimum.

  • Fractional shares limit uninvested cash.

  • Robust goal-based tools.

Cons

  • No direct indexing.

Read full review

Betterment offers tax-loss harvesting, but it has no direct-indexing tool, which can further help savings for investors with taxable accounts. Also, the company doesn’t support 529 college savings.

» Read NerdWallet’s full Betterment review

Wealthfront

Wealthfront is the only one of the three that requires a minimum account balance, but the amount is low ($500). Its 0.25% management fee is low, too, and NerdWallet readers can get their first $5,000 managed for free. Wealthfront’s Path tool helps with financial planning, be it for buying a house, retirement, college or general savings goals. It’s also one of the few robo-advisors to manage 529 college savings plans.

For accounts with balances of $100,000 or more, Wealthfront offers tax-optimized direct indexing, a more powerful tool for tax-loss harvesting.

NerdWallet rating

Fees

0.25%

management fee

Account minimum

$500

Promotion

$5,000

amount of assets managed for free

The bottom line

Wealthfront has built client trust by offering free management on the first $5,000 — with NerdWallet’s promotion — but the company’s stock-level tax-loss harvesting service really shines, adding as much as 2% to annual investment performance for eligible accounts.

Show pros & cons

Pros

  • First $5,000 managed free (NerdWallet promotion).

  • Low ETF expense ratios.

  • Daily tax-loss harvesting.

  • Automatic rebalancing.

Cons

  • No fractional shares.

  • No large-balance discounts.

Read full review

Wealthfront doesn’t offer access to advisors, a downside for customers who want occasional human help with investing, nor does it offer the purchase of fractional shares. Also, Wealthfront requires you keep a cash balance equivalent to the estimated fees you’ll pay over the next year.

» Read NerdWallet’s full Wealthfront review

Wealthsimple

Wealthsimple has a robust offering for socially responsible investing, as well as halal investing products that comply with Islamic law. Wealthsimple earns its name with its beginner-friendly interface and gives all customers access to financial planners. And there’s no minimum required to open an account.

The firm’s management fee range of 0.4% to 0.5%, depending on your account balance, is higher than those at Wealthfront and Betterment.

NerdWallet rating

Fees

0.40% - 0.50%

management fee

Account minimum

$0

Promotion

$10,000

amount of assets managed for free for one year

The bottom line

Wealthsimple’s $0 minimum balance requirement, hands-on human help and its no-fuss, streamlined design make it an attractive place for beginners to start their investing journey. But the company’s real standout feature among the robo-advisor competition is its lineup of socially responsible investment (SRI) portfolios, a refreshing addition for values-based investors. Another unusual offering that customers with taxable investment accounts will appreciate is free tax-loss harvesting, no minimum account balance required.

Show pros & cons

Pros

  • Access to human advisors.

  • Free portfolio analysis.

  • Socially responsible investment options.

  • No account minimum.

Cons

  • Higher account management fees.

  • Limited personal finance tools.

Read full review

Aside from its higher management fees, some consumers may find Wealthsimple’s offering too streamlined: Those who want retirement-planning tools, calculators or a strong investor-education experience won’t find that here.

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



Best for:
No minimum / Access to financial advisors (with Premium plan) / Socially responsible investing / Fractional shares

Falls short:
No direct-indexing tool / No 529 plan


Best for:
Digital-only management / Nonretirement (taxable) accounts / Saving for college

Falls short:
No human advisors / No fractional shares / Cash balance requirement


Best for:
No minimum / Access to financial advisors / Socially responsible investing / Halal investing portfolio

Falls short:
High account management fees / Lack of personal finance tools
Best for
  • Access to financial advisors (with Premium plan)
  • Socially responsible investing
  • Fractional shares
  • Digital retirement-planning tool
  • Taxable accounts
  • Saving for college
  • Access to financial planners
  • Socially responsible and halal investing
  • Fractional shares
Falls short
  • No direct-indexing tool
  • No 529 plan
  • No human advisors
  • No fractional shares
  • Cash balance requirement
  • High management fees
  • Few planning and educational tools

 

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