Betterment vs. Wealthfront -
Which Is Better In 2017?

Updated on: 2017.03.24

The 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.

Enter your anticipated initial deposit amount to determine which is better for you!

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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.

  • 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. It's like automatic deposits but more flexible which is useful for people who don't have a steady income like freelancers or salespeople earning commission.

Check out Betterment

Or read our detailed Betterment review here.

Advantages of Wealthfront


  • 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 & increases tax loss harvesting.

  • Supports 529 college savings plans which is useful for parents preparing for their children's education.

  • Offers Path, an online financial planning tool that connects to your existing accounts and analyzes your spending and provides visualizations of "what if" scenarios for your financial future.

Check out Wealthfront

Or read our detailed Wealthfront review here.


Features of Both Wealthfront and Betterment

  • Automated Asset Allocation: both automatically rebalance your portfolio based on your risk profile.
  • Supported Account Types: both robo advisors have standard taxable accounts, all IRAs including traditional, Roth, SEP, and Rollover IRAs, as well as joint and trust investment accounts.
  • Tax-Loss Harvesting: both include this valuable service that ensures your losing trades get a tax break for accounts of any amount.
  • Referral Program: both offer referral programs for introducing friends and family to the service. Betterment gives you a free month for one referral and a free year for three referrals with no limit; Wealthfront gives you an additional $5000 managed for free per referral.
  • No Cash Holdings: neither holds your assets in cash, instead investing whatever you deposit into securities.
  • No External Investments: neither robo advisor supports any investments outside of their offerings.
  • No Guarantee of Value: since both platforms are investment accounts, both have the risk of loss and are not FDIC insured like a bank account.

  • Robo Advisor

    Betterment

    Wealthfront

    Minimum Deposit$0$500
    Annual Fee
    Account TypeAnnual Fee
    Digital - tax efficient algorithms, digital advice0.25%
    Plus - Digital product with annual planning call from team of certified financial planning professionals and licensed financial efforts who monitor accounts throughout the year0.40%
    Premium - Plus product along with unlimited access to certified financial planners0.50%
    Account ValueAnnual Fee
    $500 - $10,0000%
    $10,000+0.25%
    Year Founded20102011
    Assets Under Management$7.3 Billion$5 Billion
    Direct Indexing

    Wealthfront enables direct indexing, an enhanced form of tax-loss harvesting for accounts with a minimum of $100,000.
    Tax Loss Harvesting

    Fractional Shares

    Human Advisors
    Betterment provides a free human advisor for accounts over $500,000

    Single Stock Diversification

    Wealthfront calls this their "Selling Plan" which allows any shareholder with a concentrated position to sell their shares over time and diversify their holdings.
    Taxable Accounts

    401k Plans

    IRA Accounts

    Wealthfront's "Tailored Transfer" feature migrates your investments tax-efficiently over time.
    Roth IRA Accounts

    Wealthfront's "Tailored Transfer" feature migrates your investments tax-efficiently over time.
    SEP IRA Accounts

    Trust Accounts

    529 Plan Accounts

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