Updated June 28, 2022

Wealthfront Review: Is It Good?

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Wealthfront simplifies long-term, low-cost investing with a diversified portfolio. But is it safe? Read on to learn if Wealthfront is worth it.

5-point scale (the higher, the better)

Pros and Cons

  • Minimal opening deposit & fees
  • Advanced goal tracker
  • Tax loss harvesting
  • No human advisors
  • No fractional shares

Bottom Line

Good robo-advisor for hands-off investor. Fees are low, but lack human advisors

What is Wealthfront?

Wealthfront is a robo-advisor that automatically invests and manages your portfolio for you. You simply fill out a form stating your goals and risk tolerance. The algorithm invests based on your answers.

There's no human intervention. Because it's automated, the fees are much lower than if you were to hire a financial advisor.

Wealthfront offers 3 main services:

  • Robo advisement: The platform is focused on investing in ETFs (Exchange Traded Funds). It automatically adjusts your portfolio to stay in line with your investment goals.

  • Financial planning: Wealthfront offers free software-based financial planning to help you plan for retirement and different life situations.

  • Short-term cash management: Wealthfront offers a cash account with a high yield APY and FDIC insurance up to $1 million. That is up to 4x the coverage a standard bank offers because Wealthfront holds your cash account deposits at multiple FDIC insured banks. They also offer a unique service to robo-advisors that allows investors with $100,000 to borrow against their portfolios.

Keep reading to see if Wealthfront is right for you.

Did You Know: Wealthfront doesn't require payment upfront. You create a profile and get a suggested investment profile BEFORE funding your account.

This way, you can see if Wealthfront's methodology is right for you.

Who Wealthfront Is Best For

  • Beginners unsure about investing.
    Many novice investors lack the confidence to select their own investments. A robo-advisor does all the work for you.

    Beginners don't have to managing their own portfolios, which takes the fear out of investing.

    Did you know: While Wealthfront only has a $500 minimum, it may surprise you that the majority of their accounts are at $100k or above. Wealthfront offers value added services available at $100k+ such as stock level tax-loss harvesting and risk parity.

  • Hands-off investors.
    Wealthfront will handle complicated tasks like rebalancing and tax strategizing.

  • Investors saving for retirement.
    With Wealthfront's advanced financial planning tools, you can estimate your retirement savings. This helps see what you need to do to reach your goals.

    Wealthfront also offers IRA accounts and 401k rollovers.

Is Wealthfront FDIC insured? Wealthfront is not FDIC insured. Instead, it is insured by SIPC (Securities Investor Protection Corporation) for up to $500,000 per account (insurance on cash is limited to $250,000).

SIPC protects against loss of securities at a brokerage due to bankruptcy or other financial troubles (like if Wealthfront were to go out of business). It does NOT protect against losses due to the market or bad investment advice.

Other Trading Apps

How much does Wealthfront Cost?

Currently, Wealthfront charges an annual fee of 0.25% of your assets under management. Wealthfront does not charge:

  • Account opening fees
  • Account closing fees
  • Trading fees
  • Commission fees
  • Account transfer fees
  • Withdrawal fees

The platform deducts the annual fee from your account each month, based on your average monthly balance. With an average monthly balance of $100,000, you would pay $20.83 per month.

You will also incur an ETF expense ratio. Though charged through Wealthfront, this fee comes from the funds in which you're investing. ETF expense ratios cost an average of 0.8% - 0.12%.

How much do you need to invest in Wealthfront?
Minimum Investment Required: $500 minimum to open an account. This enables Wealthfront to allocate your funds over eight asset classes.

If you want to take advantage of the Stock-level Tax Loss Harvesting, though, you will need an account minimum of $100,000.

Wealthfront Free Financial Planning

Wealthfront offers free financing planning to help you plan for retirement powered by its automated financial advice engine, Path. You can link all your financial accounts to get an overall picture based on your current finances and retirement goals.

Based on that, Path estimates how much you'll need to save in the future. Here's what else you can do with Path:

  • See how spending and/or saving more or less would impact your retirement income
  • Calculate what happens if you retire at different ages
  • Estimate how big financial decisions (like buying a house) would impact retirement
  • See tax implication of withdrawals for your different accounts

Wealthfront uses government data to determine the spending habits as people hit retirement age. It compares this data to your current spending habits to determine how much you'll need.

The retirement calculations also consider factors like Social Security or inflation.

Wealthfront helps you plan for big events:

  • Homeownership: Path helps you calculate when you'll save enough for the down payment, the amount of mortgage you'll realistically qualify for, and the neighborhoods in your price range.

  • College: See the estimated cost and how much your kid can expect in financial aid. Path will help you set a realistic monthly savings goal for your child's education costs.

  • Travel: Want to take some time off to travel? Path will tell you how much time you can take off and still stay maintain your financial goals.

    See how much a trip is expected to cost. Path will also show you how things like renting out your home will impact its affordability.

Wealthfront PassivePlus Services

PassivePlus is a suite of services aimed to improve your investment returns. These services are automatically enabled once you hit a certain amount in your portfolio. They include:

  • Tax Loss Harvesting (for all taxable accounts)
    Should you lose money on a particular ETF, tax loss harvesting uses that loss to offset capital gains you may have made with other investments. This can lower your tax bill.

    Wealthfront offers daily tax loss harvesting, whereas most brokers only offer this service annually. The daily tax loss harvesting watches for movement in the market to capture investment losses. The tax savings are then reinvested to help grow your investments.

  • Stock-level Tax Loss Harvesting (for accounts $100,000+)
    This advanced program looks for movement in individual stocks, not just the overall index. It purchases individual stocks from the S&P 500, rather than ETFs. This is more tax efficient.

  • Risk Parity (for accounts $100,000+)
    Risk parity is an advanced strategy that aims to even out risk among the different asset classes. It weighs the risk among the asset classes and creates an ideal allocation according to the optimal risk target level.

    This affords you a better return for a portfolio with the same risk level.

  • Smart Beta (for accounts $500,000+)
    Smart Beta (formerly Advanced Indexing) weighs the stocks in your portfolio more intelligently to increase returns. It uses factors like value, momentum, dividend yield, market beta, and volatility to determine how much to invest.

Wealthfront log-in: Already have a Wealthfront account? You can log in at www.wealthfront.com/login.


As with any broker, Wealthfront offers no guarantee of returns. You run lose your investment at any point.

You can see the historical performance for different risk levels on the site. Here's the historical performance for a moderate risk score of 5.0 (after fees, pre-tax).

A benefit of Wealthfront's strategy is their focus on creating and rebalancing a balanced portfolio over time. This portfolio consists of indexed ETFs that help minimize individual investment risk.

In other words, by investing in the overall market rather than individual stocks, you can protect yourself if a few of these companies go bust.

However, in case of a market correction, where the entire market loses value, your portfolio will also take a hit.

Is Wealthfront Safe? As with any broker, your money is at risk based on the market's performance. Wealthfront holds your money in a brokerage account at Wealthfront Brokerage Corporation. They also use RBC Correspondent Services for clearing trades and IRA Services Trust Company for IRA accounts. Wealthfront uses military-grade encryption to keep your information safe. But how you manage your safety on your end also matters. Make regular updates and use two-factor authentication to prevent your information from being stolen.

Wealthfront Pros

  • Minimal opening balance
    Beginner investors usually don't have large amounts of cash. Wealthfront allows you to get started with just $500. They charge no fees if you drop below that amount.

  • Automatic rebalancing
    To start, you set your allocation (e.g.: 70% stocks and 30% bonds). It's not unusual for this to drift over time, since stocks and bonds increase at different rates.

    Wealthfront automatically rebalances your portfolio to your target allocation. If you change your risk profile, Wealthfront will also automatically reassess your asset allocation.

  • Advanced financial planning
    Wealthfront free financial planning helps you determine if you are on track for your investment goals, whether for retirement, college, or something else.

  • Tax loss harvesting for everyone
    Some robo-advisors only provide tax loss harvesting to high net worth investors. Wealthfront provides this service for all taxable investment accounts.

    The ability to maximize your tax savings can save you thousands of dollars come tax time.

  • Tax efficient transfers
    To transfer funds from another brokerage, rather than sell your old portfolio and transfer the investments into cash, Wealthfront offers a "Tax-Minimized Brokerage Account Transfer."

    Certain assets, such as stocks and ETFs, can be electronically transferred to your Wealthfront portfolio. Investments less than one-year-old are left to sit until they hit that milestone.

    The software then automatically sells the securities after one year. That way, you pay capital gain taxes instead of ordinary income tax, helping you save money.

    Some types of investments will not qualify, including:
    • Penny stocks
    • Mutual funds
    • Annuities
    • Individual bonds

  • Retirement accounts
    Wealthfront offers traditional, Roth, and SEP IRA accounts. You can also rollover a 401k from a previous employer to an IRA tax-free.

  • College 529 plans
    Wealthfront offers 529 college savings plans if you are saving for your child's education. The Path tool further helps you get an idea of much you need to save.

    The tool takes into account the school's costs and estimated financial aid you may receive, and then automatically determines your monthly saving requirements.

    TIP: Check out your state's 529 plan first. Many state-sponsored plans offer tax benefits (deductions or credits) to residents.

    If you've exhausted this benefit or your state doesn't offer one, then Wealthfront offers a great alternative.

  • Wealthfront Cash Account
    A Wealthfront Cash Account is a secure place to save cash you plan to invest or spend within the near future.

    Compare Bank Promotions:

  • Portfolio line of credit
    If you need cash for something, Wealthfront allows a secure line of credit against your portfolio for investors with $100,000 or more. This way, you can borrow money without having to sell off your investments.

    The interest rate is low - generally lower than credit cards and many personal loans. You're allowed to borrow up to 30% of your account. You pay back the loan on your own time.

How easy it to get money out of Wealthfront?
  • Withdraw funds: Go to "Transfer Funds" and select the accounts to withdraw from and transfer into. You must withdraw at least $250, and the account balance cannot go below $500 (in other words, you need at least $750 in the account). There are no withdrawal fees, and you can withdraw as often as you like.
  • Close your account: Select "Withdraw funds" and "Withdraw the entire account balance." You can liquidate your account and transfer the cash to your bank account. This may incur taxes. You'll have to call Client Services to close your account.


  • No access to an advisor
    As a beginning investor, it can be difficult not talking to a human about your investments. However, Wealthfront has a blog that answers many questions you may have.

  • No fractional shares
    You could end up with a cash balance that just sits if you don't have enough money in your account to purchase a full share of an ETF.


Wealthfront is one of the few robo-advisors to provide the same desktop experience on an app. The app is available on both iOS and Android systems.

It allows you to:

  • See your Wealthfront account balance and performance chart

  • Link your external financial accounts

  • Make deposits to your Wealthfront accounts

  • Withdraw money into your linked account

  • Use the retirement planning tools to see if you're on track

  • Calculate the costs of your goals (such as buying a house, travel, etc.)

  • Get recommendations on how to reach your goals

  • See houses you can afford

  • Borrow cash with Portfolio Line of Credit (for accounts $100,000+)

You Should Know: The app doesn't offer a human advice center. And you cannot change your risk tolerance on the app - that must be done through Wealthfront's website.

Wealthfront vs Betterment

Wealthfront and Betterment are both good choices for a robo-advisor. They offer similar services, including portfolio rebalancing and tax loss harvesting.

They also have similar account types, including IRAs and taxable accounts. However, Wealthfront's fees are lower for accounts over $100,000; Betterment increases the fee for high-balance accounts.

Choose Betterment IF: You need a human advisor.

Betterment offers unlimited access to financial experts, no matter your balance. And if you have a minimum of $100,000 invested, their Certified Financial Planners offer advice on outside investments and guidance for life events.

Wealthfront has no human advisors. But they do have financial planning tools that look at your entire overall financial health.

You Should Know: Betterment also allows you to purchase fractional shares. This means you can make money on your entire portfolio, rather than let spare cash sit in your account until you can afford a full share.

Choose Wealthfront IF: You're saving for college.

Wealthfront has 529 savings plans for those saving for college. The platform offers a tailored program based on when your child will enter college. (You can even name a specific college at any point.)

These features allow you to maximize your tax savings while saving for your child's education.

What if I have less than $100,000 to invest?
Choose Wealthfront. Their fees are among the lowest of all robo-advisors we've encountered for customers with less than $100,000.

Wealthfront vs Vanguard

Vanguard Personal Services is a robo-advisor geared toward the investor with a higher net worth. It requires a $50,000 minimum deposit. The program offers IRAs, taxable accounts, and joint accounts, just like Wealthfront.

Choose Vanguard IF : You want human interaction and have more than $50,000 to invest.

Vanguard offers personal financial advisors you can talk to Monday - Friday. The human advisors select investments based on your goals. They also monitor and rebalance your portfolio.

Both Wealthfront and Betterment rely on technology to build and manage your portfolio. However, Vanguard has a $50,000 minimum investment requirement.

You Should Know: Having access to a human advisor means you get a say in some of the account selections.

If you have specific investments you want to make or want advice on those selections, it's made available to you with Vanguard.

Choose Wealthfront IF: You have less than $50,000 to invest and/or you're concerned about fees.

Wealthfront's annual fee is lower than Vanguard's, at 0.25% versus 0.30%. You can't even invest in Vanguard with less than $50,000. And you'll pay commission fees if you trade anything other than Vanguard securities.

If you have over $50,000 to invest, the additional human interaction Vanguard offers is an advantage. Otherwise, you're better off with Wealthfront's lower fees.

Wealthfront vs Acorns

Acorns uses an "invest spare change" approach.

You link a bank account and credit cards to your account. And every time you make a purchase, Acorns will round up the spare change and automatically invest it for you.

This is a good way to invest without thinking. But you're not going to build real wealth from spare change.

Wealthfront is a better option for those serious about retirement savings. And Acorns' monthly fee may be high if you keep a very small balance.

Bottom Line: Is Wealthfront Worth It?

Wealthfront is a good option for both beginning investors and advanced ones looking to grow their portfolios.

If you want personal investment advice, though, you may want to look elsewhere. Wealthfront is best suited for the investor who can manage their account digitally.

For people with little to invest who want to jumpstart their goals, Wealthfront provides the opportunity with their minimal investment requirement and low fees.


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Donna Tang is a content associate at CreditDonkey, a personal finance comparison and reviews website. Write to Donna Tang at donna.tang@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

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