Betterment vs. Wealthfront - Updated on: 2017.02.03The short answer is Wealthfront is better if you have less than $10,000 to invest since they don't charge fees for accounts lower than that value (increased to $15,000 if you apply via a referral). Betterment is the superior choice for accounts over $2,000,000 since their fee drops to 0% at that value, and it's the only choice if you have less than $500 since Wealthfront requires a $500 minimum deposit that Betterment does not.Both robo advisors have very similar investing strategies based on modern portfolio theory,
but there are minor differences in their feature sets as well as their fee structure.
You should select the service that meets your needs and minimizes your fees based on your initial deposit amount.
Which Is Better In 2017?
Enter your anticipated initial deposit amount to determine which is better for you!
My initial deposit is:
Betterment is the only choice for you due to the fact that Wealthfront requires $500 minimum.
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%.
It's a tie! 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.
But Betterment has more advanced functionality such as spousal tax loss harvesting and tax coordinated portfolios.
Betterment is better for you in terms of fees because its fee drops to 0% for accounts over $2,000,000 while Wealthfront charges 0.25%.
Advantages of Betterment
- Has the ability to let you specify multiple personal savings goals simultaneously. This way you can set aside money for retirement, a new house, and a wedding ceremony through different goal funds and track their progress independently.
- Offers a strong personalization feature called "RetireGuide" that customizes a dynamic investment plan based on your unique situation by asking you questions about your financial scenario and using those (20+) pieces of information to generating a diversified portfolio based on your needs.
- Recently came out with financial account aggregation, which allows you to sync all your financial accounts so you can track your total net worth, identify idle cash, and provide insight into investment allocation and account fees.
Advantages of Wealthfront
- Has a free portfolio analysis tool called Portfolio Review based on four factors: fees, taxes, cash drag, and diversification and generates a customized report.
- Provides with your first $10k free of fees and incentivizes you to invite friends and family with $5000 in free management for each referral on top of the free $10k.
- 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.
- Supports direct indexing for accounts over $100k which reduces fees further and increases tax loss harvesting opportunities.
Features of Both Wealthfront and Betterment
|Assets Under Management||$7.3 Billion||$2.61 Billion|
Wealthfront enables direct indexing for accounts with a minimum of $100,000
|Tax Loss Harvesting|
Betterment provides a free human advisor for accounts over $500,000
|Single Stock Diversification|
|Roth IRA Accounts|
|SEP IRA Accounts|
|529 Plan Accounts|
|Sign Up||Check out Betterment||Check out Wealthfront|
Assets Under Management
Betterment recently overtook Wealthfront in terms of total assets under management as you can see from the chart below.