Betterment vs. Wealthfront: 2024 Comparison

Betterment and Wealthfront both charge 0.25% for digital portfolio management. But Wealthfront also offers digital financial planning tools, while Betterment offers access to financial advisors for an upgraded fee.
Arielle O'Shea
By Arielle O'Shea 
Updated

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The robo-advisor industry was pioneered by Betterment and Wealthfront, and while the companies started out with very similar models, they’ve slowly made changes to differentiate themselves.

Betterment vs. Wealthfront: Which is right for you?

The biggest deciding factor between these two robo-advisors: If you want to work with a human, you’ll find that option only at Betterment. If you’re after only digital advice, Wealthfront’s financial planning tools are more robust.

Other considerations include the type of account you plan to open, investment portfolios and key features. Here’s a quick look at both services to help you choose the best match for your money.

Betterment is best for:

  • Hands-off investors.

  • Retirement investors.

  • Users with low balances.

  • Those who want automatic rebalancing.

  • Users who like goal-based tools.

Betterment at a glance

Reviewed: Oct. 2023

Period considered: Aug. - Oct. 2023

Account minimum

$0 ($10 to start investing).

Account management fee

0.25% annual fee on balances over $20,000 or if you set up recurring monthly deposits totaling $250 or more. Otherwise, $4 per month.

Investment expense ratios

Average expense ratio of 0.05% to 0.24% for Betterment Core Portfolio as of August 2023.

Account fees (annual, transfer, closing)

$75 outbound transfer fee.

Portfolio mix

Core portfolio uses ETFs from 13 asset classes. Portfolio options include: Betterment Core, Goldman Sachs Smart Beta, Blackrock Target Income, Betterment Flexible Portfolio (where clients can adjust the weights of asset classes) and Innovative Technology. Portfolio mix is well-diversified but lacks exposure to non-market correlated assets like real estate investment trusts (REITs) and commodities.

Betterment also offers four cryptocurrency portfolios: Universe, Sustainable, Metaverse and Decentralized Finance.

Socially responsible portfolio options

Three socially responsible investing portfolio options: Broad Impact, Climate Impact, and Social Impact.

Accounts supported

Individual and joint taxable brokerage accounts. Roth, traditional, inherited, rollover and SEP IRAs. Trusts. Ability to link external accounts for better-informed advice (but not direct management).

Tax strategy

Tax-loss harvesting.*

Tax-Coordinated Portfolio (asset location) tool.

Tax Impact Preview tool.

Charitable giving tool.

Automatic rebalancing

Free on all accounts. Rebalancing generally triggered when drift passes 3%, considering tax impact. Also, Betterment uses any cash flow, such as a dividend or deposit, to partially rebalance your portfolio.

Human advisor option

Betterment Digital doesn't offer access to financial advisors. However, for a fee, anyone can buy an advice package that includes a consultation with an advisor, regardless of if they have a Betterment account or not. Prices start at $299.

Savings account/cash management option

Cash Account** with no fees or minimum balance requirements, unlimited transfers and FDIC coverage of up to $2 million in individual accounts or up to $4 million in joint accounts at program banks. Includes a feature that enables customers to save in separate buckets for different goals. Checking account that reimburses ATM fees and foreign fees and has a debit card with cash back. The cash account offers an interest rate of 4.75%. *Current promotional rate; annual percentage yield (variable) is 4.75% as of 7/31/23, plus a .75% boost available as a special offer with qualifying deposit. Terms apply; if the base APY increases or decreases, you’ll get the .75% boost on the updated rate. Cash Reserve is only available to clients of Betterment LLC, which is not a bank; cash transfers to program banks conducted through clients’ brokerage accounts at Betterment Securities.

Customer support options (includes how easy it is to find key details on the website)

Phone support Monday-Friday 9 a.m.-6 p.m. Eastern time. Email support and questions also answered through social media.

Wealthfront is best for:

  • Hands-off investors.

  • Taxable accounts.

  • Free financial tools, even if you don't have a Wealthfront account.

  • 529 college savings plan management.

  • Both DIY and automated investing.

Wealthfront at a glance

Reviewed: Oct. 2023

Period considered: Aug. - Oct. 2023

Account minimum

  • 500 for automated investment accounts.

  • $1 for cash accounts and the stock investing account.

  • No minimum for financial planning.

Account management fee

0.25% for automated investing. No management fee or commissions for the stock investing account.

Investment expense ratios

ETF expense ratios average 0.08%.

Portfolios that include the Wealthfront Risk Parity Fund have an average expense ratio of 0.11%.

Account fees (annual, transfer, closing)

None.

Portfolio mix

Automated investment portfolios:

  • ETFs from 12 asset classes (portfolios generally consist of 6 to 8). Recent additions of sector-based ETFs (including tech, health care, metaverse, energy) and two cryptocurrency trusts (Bitcoin, Ethereum).

  • Clients can customize their Wealthfront portfolio by adding or deleting certain ETF holdings or building their entire portfolio from scratch.

  • Taxable accounts can opt-in for WFRPX, the Wealthfront Risk Parity Fund. Accounts will hold a mix of three ETFs (VTI, EMB, BND) until balances reach $100,000, at which point the Risk Parity Fund replaces these ETFs.

  • Portfolios over $500,000 are eligible for smart beta.

  • New Automated Bond Portfolio offers a collection of Treasury bond and corporate bond ETFs with automatic rebalancing, dividend reinvestment and tax-loss harvesting.

Wealthfront stock investing account:

  • Clients can purchase curated collections of stocks, or trade over 1,500 stocks, ETFs or REITs individually.

Socially responsible portfolio options

Automated investing clients can choose to invest in Wealthfront’s SRI portfolio or customize any other Wealthfront portfolio to include socially responsible options for no additional fee.

Accounts supported

  • Individual, joint and trust taxable investment accounts.

  • Roth, traditional, rollover and SEP IRAs, along with backdoor Roth conversions and 401(k) rollovers.

  • 529 college savings plans.

  • High yield cash account (not charged management fee).

  • Automated bond portfolio.

  • Stock investing account.

Note: Investing in individual stocks is only available through individual taxable accounts.

Tax strategy

  • Daily tax-loss harvesting free for all taxable accounts.

  • Stock level tax-loss harvesting (direct indexing) available at no cost for taxable accounts with $100,000 or more. Balances under $100,000 will hold a particular ETF, VTI.

  • TurboTax customers can easily import tax-loss harvesting data from Wealthfront.

Automatic rebalancing

Free on all accounts.

Human advisor option

None. Licensed product specialists (have Series 7 & 66 and some are CFAs/CFPs/CPAs) are available to provide support or product information via phone or email, but they do not make recommendations or give advice.

Savings account/cash management account

The Wealthfront Cash Account offers high interest checking. The cash account offers a competitive yield and is covered by up to $8 million in FDIC insurance. The account requires just $1 to get started.

Customer support options (includes how easy it is to find key details on the website)

Phone support Monday through Friday 8 a.m. to 5 p.m. Pacific; and all emails are responded to within one business day.

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Methodology

How do we review robo-advisors?

NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. robo-advisors. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.

We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across 16 factors. The final output produces star ratings from poor (one star) to excellent (five stars).

For more details about the categories considered when rating robo-advisors and our process, read our full methodology.

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