If you’re looking for a simple way to invest your money then a robo advisor may be a great solution. Investing in fractional shares is an efficient way to ensure that your entire portfolio is utilized and that you don’t sit on idle cash. Wealthfront – $500 minimum to open an account. Users start by completing a short questionnaire that asks questions about age, annual income, risk tolerance, and investment goals. To help investors make the most of their money, Betterment’s investment methodology is ETF focused. Today we’ll compare two robo advisor titans in our Betterment vs Wealthfront breakdown. How Much Should I Have Saved For Retirement At My Age? In contrast, Wealthfront is appealing to higher net worth investors that can meet the minimum and who will benefit from features like stock-level tax-loss harvesting. Betterment vs Wealthfront 2020 – Which Robo Advisor Is Best? Wealthfront asks similar questions as Betterment upon signup in order to create a portfolio that matches your goals and risk tolerance. SmartDeposit strategically takes extra cash you might accrue in your account and puts it to work for you, capped at a certain amount to make sure you still have more than enough to pay your bills. Investment Philosophy – Betterment vs. Vanguard vs. Wealthfront. Verdict – Betterment. Unlike Betterment, Wealthfront requires a $500 account minimum to begin investing. The Betterment platform is awesome. Offers increased asset allocation choices including a REIT (Real Estate Investment Trust) and natural resources ETF (exchange traded fund) as well as a single-stock diversification service so you can have increased portfolio diversification. Fees vary between Betterment’s Digital and Premium account types. Betterment compares their low-cost, ETF-focused investment strategies to more actively managed, higher-fee portfolios in this example. ETFs are a wonderful low-cost way to get financial diversification as your investment dollars are spread across a number of companies. Users pay 0.25% as an account management fee regardless of total balance. As with Betterment, Wealthfront utilizes index-based ETFs in their portfolio composition, selecting low-cost investment funds to help keep expenses low. We cannot guarantee that this information is applicable or accurate to your personal circumstances. In order to do this, Wealthfront actually buys individual stocks instead of using a single index fund, allowing them to act upon individual stocks instead of entire funds. Both Betterment and Wealthfront offer a solid range of account types you would expect from industry-leading robo advisors. But Betterment has more advanced functionality such as direct real-time contact with financial advisors via encrypted text messaging, spousal tax loss harvesting, and tax coordinated portfolios. Personal Capital: Investment performance conclusion The three wealth managers all came within 1% of each other over the five year period for average annualized returns… We love questions, comments, and suggestions! In two years my side hustle grew into a 7 figure business. After selling the business and becoming financially independent, my wife and I started WealthFam. Betterment has no minimum initial investment compared to $500 for Wealthfront. Summary – Wealthfront vs Betterment. However, each robo advisor lists their historical returns since inception. We won't send you spam. Hello! The entire point of investing is to put your wealth to work. Delivered fresh to your inbox. Wealthfront is better for you in terms of fees, since they don't charge for accounts less than $10,000 while Betterment charges 0.25%. Their digital plan … For most investors, management cost is identical. But because both Betterment and Wealthfront use ETFs, you can basically track their returns by tracking … Now includes College Planning, which models your tuition costs based on data from each university and helps you save for higher education. Premium is available for minimum account … Supports 529 college savings plans which is useful for parents preparing for their children's education. I Have Every Dollar I've Earned In My 10 Year Career, How To Get Rich Without A Fancy 6 Figure Job. Verdict – Betterment. Our articles, tools, and analysis contain information and data to help you conduct research but are not intended to serve as investment advice. Wealthfront is another massive robo advisor platform. Each platform has unique elements, and we’re going to take a closer look at both Betterment and Wealthfront to help you make the right choice. Betterment vs Wealthfront: Fees Compared Betterment’s Pricing and Fees. Since expected security returns depend on supply and demand, an increase in the average allocation to small and value stocks will reduce the size and value premiums. Wealthfront requires a minimum of $500 to invest; Betterment doesn't. Specifically, Betterment selects “low-cost, highly liquid, index-tracking ETFs to ensure clients gain the desired asset exposure at the lowest total cost of ownership.”. In his spare time, Tom enjoys writing at This Online World, spending time outdoors, and traveling. However, Wealthfront emphasizes creating a diversified portfolio, and … Offers Portfolio Line of Credit which allows you to stay invested in the market while still meeting liquidity needs as they arise, similar to a HELOC. There are plenty of other robo advisors on the market, as well as alternative investment options. Financial Advisors: Finally, seeking advice from a certified financial planner (CFP) is also a viable route to take for your wealth management. Both Betterment and Wealthfront operate completely online and have you complete a questionnaire when you apply for an account. Are You Missing Opportunities To Save Thousands In Order To Save Pennies? For comparison, the S&P 500 has seen an approximate 11% average annual rate of return in that same time. Wealthfront also shares historical performance data. However, Wealthfront emphasizes creating a diversified portfolio, and offers a more diverse range of asset classes compared to Betterment. We enable you to conduct research and compare information for free - allowing you to make data-driven financial decisions. Wealthfront: None Betterment vs Sofi Invest Results Wealthfront and Betterment may have started the robo-advisory … The purpose … I hope this site can help you on your financial and life journey whether that means starting a business, making money online, or just being smarter about your finances. Opinions expressed are solely those of the author and have not been reviewed or approved by any advertiser. These data sets are the most fair way to compare Betterment vs Wealthfront. Betterment vs. Wealthfront–The Basics. Betterment … Wealthfront only uses 11 asset classes to create portfolios. It’s overly complicated and difficult to view the information you want to see. Millions of Americans who don’t have the time or financial acumen to build and monitor an investment portfolio are turning to robo advisors for good reason. Investment Strategies – Betterment vs Wealthfront Betterment Investment Strategy. Each asset fund is an ETF, and you can view the list of current Betterment portfolio funds to get an idea of how Betterment invests your money. An example of a portfolio recommendation from Betterment. Enter your anticipated initial deposit amount to determine which is better for you! Again, Wealthfront focuses heavily on low-fee ETFs, diversification, and dividends in their portfolio composition. Both platforms help investors to craft diversified portfolios and use automated investment strategies to meet their goals. Wealthfront is slightly better for you in terms of fees; even though Betterment has the same fee amount, because Wealthfront waives its fees on the first $10,000 so you'll pay slightly less. Wealthfront is slightly better for you in terms of fees; even though Betterment has the same fee amount, because Wealthfront waives its fees on the first $10,000 so you'll pay slightly less. Betterment’s research claims that its tax loss harvesting on average improves your return by 0.77%. More on DIY: DIY investing really is a great alternative and cheaper option compared to using robo advisors. Betterment and Wealthfront are two of the most popular robo advisors on the market. If you have the time and financial acumen then a DIY “lazy portfolio” is our preferred approach. According to Statista, U.S. assets under robo advisor management are anticipated to grow by 12.3% per year. So who wins the Betterment vs Wealthfront battle? He contributed to InvestmentZen as an financial product analyst from 2016-2017. All content on the site is prepared by our staff or by independent contractors. ETF stands for “exchanged traded fund”. Verdict – Betterment. This enhanced version of tax-loss harvesting analyzes individual stock movements to harvest more tax losses (which can be counted against more capital gains). But Betterment has more advanced functionality such as direct real-time contact with financial advisors via encrypted text messaging, spousal tax loss harvesting, and … It’s smartly designed and allows for an amazing user experience. My name is Paul. $500 minimum to open an account. I'm a personal finance nerd, former CPA, and founder of WealthFam. A few years ago I was stuck in a job I didn't like and was decades away from financial independece. That same year I started my e-com business with $5k and a $300 Chromebook. That said, Wealthfront provides a full whitepaper that shows how robust their methodology is in dealing with taxable events. The Lazy Portfolio | Can a 3 Fund Portfolio Help You? Betterment is a cheaper robo advisor for higher net worth investors. Therefore, there isn’t a single explanation or expected rate of return for Betterment or Wealthfront. This estimate also reflects daily tax-loss harvesting. With low management fees, reasonable account minimums, and useful features like automatic rebalancing or tax-loss harvesting, robo advisors certainly make investing accessible to any investor. But ultimately, there isn’t a ‘right’ answer to the Betterment vs Wealthfront debate. I got my robinhood returns ~65% vs wealth front … Betterment vs. Wealthfront vs. Any estimates based on past performance do not guarantee future performance, and prior to making any investment you should discuss your specific investment needs or seek advice from a qualified professional. It tracks the performance of the S&P 500 index (this is an index comprised of the 500 largest publicly traded US companies). Let’s take a look as these important features to help you make the best financial decision possible. This one is a near tie as the account types are fairly similar between each robo advisor and will suit the needs of most all investors. This account also allows investors unlimited access to certified financial planner guidance, as well as advice on investments outside of Betterment, such as a 401(k) or real estate. E-Com business with $ 5k and a beautiful platform that users love your tuition costs based your! 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