Wealthfront Review 2024: Pros, Cons and How It Compares

With Wealthfront, you get low-cost access to a diverse investment lineup, excellent planning tools and a variety of tax-saving strategies. The company also offers access to individual stocks for DIY investors.
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Written by June Sham
Lead Writer
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Reviewed by Arielle O'Shea
Lead Assigning Editor
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Fact Checked

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The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.

Our Take

5.0

NerdWallet rating 

Reviewed in: Oct. 2023

Period considered: Aug. - Oct. 2023

The bottom line:

Wealthfront is a force among robo-advisors, offering a competitive 0.25% management fee and one of the strongest tax-optimization services available from an online advisor.

Wealthfront
Fees
0.25%
management fee
Account minimum
$500
Promotion
Get a $50 customer bonus
when you fund your first taxable investment account
Learn more

on Wealthfront's website

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Pros & Cons

Pros

  • Get $50 customer bonus when you fund your first taxable investment account (NerdWallet promotion).

  • Low ETF expense ratios.

  • Daily tax-loss harvesting.

  • DIY and automated investing options.

  • Low portfolio management fee.

Cons

  • $500 account minimum.

Compare to Other Advisors

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Fees 

0.25%

management fee

Fees 

0%

management fee

Fees 

0.25%

with a balance over $20K or qualifying recurring deposit. Otherwise, $4/month.

Account minimum 

$500

Account minimum 

$0

Account minimum 

$0

$10 to start

Promotion 

Get a $50 customer bonus

when you fund your first taxable investment account

Promotion 

1% match on IRA contributions

Only offers made via ACH are eligible for the match. ACATs, wires, and rollovers are not included.

Promotion 

Get 1% match

of your net Roth and traditional IRA contributions until December 30, 2024. Terms apply.

Learn more

on Wealthfront's website

Learn more

on SoFi Invest's website

Learn more

on Betterment's website

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Paid non-client promotion

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Paid non-client promotion

AD

Paid non-client promotion

NerdWallet doesn’t invest its money with this provider, but they are our referral partner – so we get paid only if you click through and take a qualifying action (such as open an account with or provide your contact information to the provider). Most importantly, our reviews and ratings are objective and are never impacted by our partnerships. Our opinions are our own. Here is a list of our partners and here’s how we make money.

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Full Review

Over 60 investment account providers reviewed and rated by our expert Nerds.

More than 50 years of combined experience writing about finance and investing.

Hands-on testing of provider websites and investment platforms.

Dozens of objective ratings rubrics and strict guidelines to maintain editorial integrity.

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.

In this Wealthfront review

Where we think Wealthfront shines


Holistic financial advice and automated investment management that appeals to both new and experienced investors: helpful planning tools, diversified — and hands-off — portfolios and advanced tax optimization strategies. High-yield cash account that requires a $1 minimum to get started and is covered by up to $8 million in FDIC insurance.

Exchange-traded funds in up to 12 asset classes.

Wealthfront stock investing account: It's rare for a robo-advisor to provide access to both managed portfolios and DIY investing; among the robo-advisors we review, Stash is the only other service that does so. That company charges a monthly fee; Wealthfront's stock investing account does not come with added fees, nor does it charge commissions for buying or selling investments. You can access individual stocks, ETFs and REITs if you want to choose your own investments. Stocks can be purchased individually (including as fractional shares) or through curated collections Wealthfront puts together based on sector, industry or other criteria.

Where we think Wealthfront falls short


$500 minimum deposit. Some other robos require much more (Vanguard Digital Advisor requires a $3,000 minimum) but others have very low or $0 minimums. The difference can be a big deal to first-time investors.

No human financial advisors are available, not even for an extra fee.

Wealthfront doesn’t buy fractional shares of ETFs for its automated investing service, which prevents the company from investing your entire deposit.

Alternatives to consider:

For access to human advisors: SoFi Automated Investing (free access), Betterment and Ellevest.

Video preview image

Wealthfront is best for


  • Hands-off investors.

  • Taxable accounts.

  • Free financial tools, even if you're not a Wealthfront customer.

  • 529 college savings plan management.

  • Both DIY and automated investing.

Wealthfront at a glance

Account minimum 500 for automated investment accounts; $1 for cash accounts and the stock investing account.

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 include ETFs from 12 asset classes (portfolios generally consist of 6 to 8).

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

Wealthfront stock investing account allows clients to 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). 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.

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.

Customer support options (rating 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.

Reviewed: Oct. 2023. Period considered: Aug. - Oct. 2023


💻 How to sign up for a Wealthfront account


The process of opening a Wealthfront account is easy — if you've ever opened a brokerage or bank account before, you'll find many steps are the same.

You'll start by selecting the type of account you want to open, then answering a quick series of questions that are designed to help Wealthfront decide what portfolio is right for you. The questions will dig into your goal, investment timeframe and how much risk you're willing to take, and once you've completed them, Wealthfront will recommend a portfolio.

You can review that portfolio and either accept it or customize it to better suite your needs. Once you've done so, you'll need to select a source for funding your account — typically this is done through a transfer from a bank account or other brokerage account — and transfer in at least the account minimum, which is $500.

💰 How much does Wealthfront cost?


Wealthfront charges 0.25% for portfolio management. The company’s biggest independent competitor, Betterment, also charges 0.25% for its digital service. (For a full description of that company’s services and fees, read our Betterment review. We also have a full comparison of Wealthfront vs. Betterment.)

If you're not quite ready to pay for money management, Wealthfront will let you link your bank and retirement accounts to its financial-planning tool, Path, for free. If you decide you want Wealthfront to manage your money for you, you'll start paying the 0.25% fee.

In addition to that portfolio management fee, the funds Wealthfront uses to build your portfolio will carry expense ratios. The expense ratios on the ETFs Wealthfront uses average 0.08%. Portfolios that include the Wealthfront Risk Parity Fund have an average expense ratio of 0.11%.

🤓Nerdy Tip

An expense ratio is an annual fee mutual funds, index funds and ETFs charge as a percentage of your investment in the fund. Expense ratios are paid in addition to your asset management fee. If you invest in a mutual fund with a 1% expense ratio for example, you’ll pay the fund $10 per year for every $1,000 invested.

Within Wealthfront's stock investing account, there are no trade commissions or management fees.

Wealthfront charges no annual or inactivity fee, and does not charge for transferring money, trades, account maintenance or setup. Some other robo-advisors do charge additional fees.

🏦 Wealthfront's portfolio selection


The company’s methodology includes giving investors a streamlined questionnaire to identify risk tolerance, then employing exchange-traded funds in up to 12 asset classes. Wealthfront’s investment mix covers U.S. stocks, foreign stocks, emerging markets, dividend stocks, real estate and natural resources, as well as emerging markets bonds, Treasury inflation-protected securities, and U.S. government, corporate and municipal bonds. The typical portfolio includes six to eight asset classes.

Its investment lineup includes socially responsible ETFs and sector-based ETFs, such as technology and health care, as well as cryptocurrency options. Investors can also allocate up to 10% of their total portfolio to Bitcoin or Ethereum using two crypto trusts, Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE). And clients now have access to customization — they can edit their Wealthfront portfolios by adding or deleting certain ETF holdings or build their portfolio from scratch.

In March 2022, Wealthfront added exposure to new categories and strategies. The robo-advisor now offers the Roundhill Ball Metaverse ETF, which gives exposure to the metaverse; the JPMorgan Equity Premium Income ETF, which invests in stocks that seem undervalued; the KraneShares Global Carbon Strategy ETF, which offers exposure to carbon allowance futures; the iShares Global Tech ETF, which offers exposure to global tech stocks; the Global X NASDAQ 100 Covered Call ETF, which lets investors add a covered call strategy to their portfolios; and the Invesco Buyback Achievers ETF, which offers exposure to U.S. companies that have bought back at least 5% of their outstanding shares in the last year.

As we noted, Wealthfront doesn’t buy fractional shares of ETFs. Also, it maintains a cash balance equal to the fees you're projected to owe over the next year, so accounts are likely to experience a small level of cash drag. The percentage held in cash isn’t nearly as high as Schwab’s allocation, which is a minimum of 6%, but it’s worth noting for investors who would prefer the fractional shares offered by other robo-advisors.

Wealthfront's stock investing account offers access to over 1,500 stocks that can be purchased individually or in fractional shares. Wealthfront has curated collections of stocks to make the process of investing easier — investors can opt to invest in an entire collection, or pick and choose on their own. The stock investing account requires investors hold a minimum of three different stocks and must be paired with a Wealthfront Cash Account.

Socially responsible portfolio options

Wealthfront has its own Socially Responsible Portfolio that includes a range of SRI investment options. This is an ideal fund for investors who only want investments that align with their values.

Its diversified portfolio screens for business involvement in civilian firearms, controversial weapons, tobacco, thermal coal and oil sands. Clients can also customize non SRI portfolios to invest in what they believe in most, including renewable energy, gender diversity, minority empowerment, animal welfare and more.

Automated bond portfolio

Wealthfront’s bond portfolio offers a mix of Treasury bond and corporate bond ETFs that was generating a yield of 5.42% as of Feb. 2024. The blend is tailored to your estimated tax rates based on state of residence, income and filing status, which helps minimize risk. Tax-loss harvesting and automatic dividend reinvestment help you keep as much of your investment gains as possible.

✅ Additional Wealthfront features


Accounts supported

Wealthfront offers individual and joint non-retirement accounts; Roth, traditional, rollover and SEP IRAs; 529 college savings plans; and high-yield cash accounts. The inclusion of 529 plans is rare among robo-advisors, making Wealthfront a good choice for those saving for college.

Note: The stock investing account is only available as an individual taxable brokerage account.

Tax strategy

Wealthfront offers daily tax-loss harvesting on all taxable accounts. Tax-loss harvesting is an investment strategy that can significantly reduce capital gains taxes. In taxable accounts, the practice involves selling losing investments to offset the gains from winners.

New Wealthfront clients who transfer in assets may benefit from its tax-minimized brokerage account transfer service. That service incorporates existing investments into the Wealthfront portfolio where possible, and holds transferred securities that can’t be incorporated until capital gains become long-term.

Wealthfront beefs up its tax optimization services with stock level tax-loss harvesting or direct indexing. The basics: It’s harder to use tax-loss harvesting when you’re buying an index, so Wealthfront replicates the U.S. stocks index by buying the stocks held in it directly — up to 1,000 of them. Then its software can look for individual tax-loss harvesting opportunities. That tax savings can be reinvested, which compounds the potential impact of the service. Direct indexing is offered at no additional cost for taxable accounts with balances of $100,000 or more. To use direct indexing with account balances under $100,000, customers must hold a particular ETF, VTI.

If you're a TurboTax user, when you file your taxes, you can enter your Wealthfront account login information to import your tax-loss harvesting data.

Automatic rebalancing

Automatic rebalancing is regular rebalancing of your portfolio in response to market fluctuations or other factors that shift your portfolio out of its intended investment allocation. Wealthfront uses threshold-based rebalancing, meaning portfolios are rebalanced when an asset class has moved away from its target allocation, rather than on a quarterly or yearly schedule.

Wealthfront's software may rebalance your portfolio when dividends are reinvested, money is deposited, a distribution is taken or market fluctuations make it necessary.

Other instances in which Wealthfront will rebalance your portfolio are when deposits, withdrawals and reinvestment of dividends take place. It uses these as opportunities to minimize the taxable gains that can arise from threshold-based rebalancing.

Cash management account

Wealthfront offers the Wealthfront Cash Account, a savings account that currently pays 4.50% interest, competitive with many online banks. Most notable about the account is that through white-label agreements with several banks, Wealthfront is able to offer up to $8 million in Federal Deposit Insurance Corporation, or FDIC, coverage for individual accounts and up to $16 million for joint accounts through partner banks. Like other savings accounts, money deposited in the Wealthfront Cash Account is not subject to investment risk. The account charges no fees. If you also have a Wealthfront investment account, the investment management fee doesn't apply to money in the cash account.

Wealthfront Cash has many features, including a debit card, bill pay and automatic payments. Users who direct deposit their paycheck can get paid up to two days early and those using their Wealthfront Cash Account to invest in a Wealthfront Investment Account can get their funds invested within minutes.

One thing to keep in mind: It's possible to open a joint cash account, but only one owner will be able to log into the account; the other person will have read-only access. (Wealthfront says it plans to roll out joint access on cash accounts in the future.)

Customer support options

Customer service phone support is available Monday through Friday, and emails are responded to within one business day.

Portfolio line of credit

Wealthfront offers a portfolio line of credit that allows customers with balances of $25,000 or more in a taxable investment account to borrow up to 30% of their portfolio. Credit checks and paperwork aren't prerequisites to borrow money from your portfolio, and it takes one business day for funds to be transferred.

Wealthfront's risk parity fund

In taxable accounts, customers can select Wealthfront's Risk Parity Fund, a proprietary mutual fund the company says offers greater exposure to asset classes with higher risk-adjusted returns.

The fund’s expense ratio is lower than other risk parity funds, but as it is a more actively managed fund, its costs are slightly higher than the other index funds Wealthfront employs, bringing the weighted average expense ratio of portfolios that include the Wealthfront Risk Parity Fund to 0.11%. Clients who select risk parity will hold a mix of three ETFs — VTI, EMB, BND — until their account balance reaches $100,000, at which point these ETFs will be replaced with the Risk Parity Fund.

The fund uses complex financial instruments called total return swaps and leverage (borrowing power) to adjust and respond to volatility in an effort to generate better returns for a given level of portfolio risk. Morningstar data show that the fund has underperformed against both comparable funds and its own benchmark index over the past three years

The fund uses complex financial instruments called total return swaps and leverage (borrowing power) to adjust and respond to volatility in an effort to generate better returns for a given level of portfolio risk. Morningstar data show that the fund has underperformed against both comparable funds and its own benchmark index over the past three years

Morningstar. Wealthfront Risk Parity W. Accessed Jan 2, 2024.
.

Wealthfront says its risk parity strategy is appropriate for investments with a time horizon of five years or more, as it tends to smooth out in the longer term. And since the fund would make up only a piece of your investment portfolio, Wealthfront says performance should be evaluated on the overall portfolio instead of on the fund itself.

As with any investment, past performance is not indicative of future results. Still, you might not want to pay extra for that track record. Investors who don't want exposure to this fund can opt out or choose not to invest in it in the first place.

Financial planning tools

Wealthfront offers Time Off for Travel, a travel-planning tool that helps investors figure out how much time they can afford to take off, how much they can spend on travel, and how that spending could affect their ability to reach other goals.

Wealthfront's free Path tool (for mobile and desktop) helps people plan for buying a house, retirement, college and general savings goals — and you don't have to open a Wealthfront account to use it. The Self-Driving Money™ tool allows users to set up categories to save for specific goals in their Wealthfront Cash Account and automatically move excess cash into a Wealthfront taxable investment account, traditional IRA, Roth IRA or 529 college savings account.

If you're looking to build a retirement savings plan, the tool pulls in your current spending activity from your linked accounts, analyzes government data on spending patterns for people as they age, and then crunches the numbers to estimate your actual spending in retirement. The Path tool also incorporates long-term Social Security and inflation assumptions in its retirement-plan calculations.

In addition to bank and investment accounts, you can link your Coinbase account to track your cryptocurrency holdings. Some other functions of the Path tool include:

  • Home buying: Path's home-planning tool incorporates your financial situation, home prices and mortgage rates to give you an estimate of how much house you can afford to buy. The tool lets you adjust your savings time frame to see different results, because you may be able to afford a bigger mortgage, say, in 10 years than you can right now. The tool also offers tips for how much to save each month and the best accounts to save in. Plus, you can do some virtual house hunting (and, if you already own a home, check your current home's value) via the app's connection to real-estate companies Zillow and Redfin.

  • College savings: Wealthfront's Path tool also lets parents pick the college they want their child to go to, then projects college costs, estimates financial aid and develops a monthly savings plan. Parents can link an outside 529 college-savings account or open one through Wealthfront, which is one of the few robo-advisors to offer its own 529 college savings plan. The service will walk users through opening a 529 account, recommend a savings goal and manage the account — slowly skewing conservative as the child approaches college age — for an all-in fee of 0.42%-0.46%, depending on investment expense ratios. The plan is sponsored by the state of Nevada. You should carefully evaluate Wealthfront’s 529 offering compared with your own state-sponsored plan, especially if your state offers a tax deduction or credit to residents who contribute; choosing the Wealthfront 529 would mean giving up that tax benefit.

🔒 Is Wealthfront safe?


All investing comes with the risk of loss. Wealthfront does offer FDIC insurance to protect cash deposits and is covered by SIPC insurance, which protects brokerage accounts. These types of insurance don't apply to investment losses or price fluctuations, but the company's algorithms will invest your portfolio according to your own risk tolerance, goals and time horizon. The company is also regulated by the Securities and Exchange Commission to ensure compliance with securities regulations, and by FINRA, which regulates broker-dealers .

Is an investment at Wealthfront FDIC insured?

Wealthfront's Cash Account operates through over 30 partner banks, and altogether offers up to $8 million in FDIC insurance. This coverage applies only to the Cash Account.

Securities Investor Protection Corporation, or SIPC, insurance covers brokerage accounts. Brokerage accounts with Wealthfront receive up to $500,000 in SIPC insurance for cash and assets in the account. For Cash Accounts, SIPC insurance covers up to $250,000 while the funds are in transit to a partner bank. (Once deposited, it's then covered by FDIC insurance.)

Is Wealthfront worth it?


Wealthfront gets high marks on nearly every category we consider, and frequently tops our list of the best robo-advisors overall. It's also one of the lowest-cost online advice solutions, with a management fee of just 0.25% — less than you'd pay at many other robo-advisors, and significantly cheaper than a human financial advisor. In short, the service is worth it for most investors, as Wealthfront's features impressed us, especially at the low price point.

In particular, Wealthfront is a strong choice for:

  • Taxable accounts due to its strong tax optimization offerings.

  • Easy-to-use digital financial planning tools.

  • A stock investing account that will appeal to you if you want a managed portfolio and the ability to DIY your investment selection.

  • 529 college savings plan management.

Learn more

on Wealthfront's website