Vanguard vs Wealthfront in Comparison 2022 | Which One is Better?


Vanguard is a well-known and established company, while Wealthfront is a newer, up-and-coming player in the industry. Wealthfront vs Vanguard: this has been a critical question for years.

Both trading platforms offer plenty of features and trading options. Also, they have an excellent user experience along with quality customer support.

In this article, I am about to compare Vanguard vs Wealthfront in terms of their fees, investment options, and customer service. Also, I'll give my verdict on which one is the better investment platform.

About Vanguard

Vanguard vs wealthfront

image source: Vanguard

The Vanguard Group is one of the largest investment platforms in the world. Jack Bogle founded this company in 1975, and today it has more than $5 trillion in assets under management. And, they offer various products and services such as individual stocks, bonds, ETFs, mutual funds, etc.

Also, this platform is known for its low-cost products. Many of its mutual funds and ETFs have no load and no annual fees. Vanguard also has a very strong track record of performance, making it a popular choice for investors.

The Vanguard Group is based in Valley Forge of Pennsylvania. And, it has dozens of branch offices in various countries.

About Wealthfront

Wealthfront vs Vanguard

image source: Wealthfront

It is one of the most popular investment companies in the world. Wealthfront's software makes it easy for people to save for their future and invest for their long-term financial goals. And it has over $3 billion in assets under management and has helped to save over $500 million for its clients.

Wealthfront offers a unique approach to investing, built on a philosophy of Passive Investing. Wealthfront's software automates this process, making it easy for people to get started with investing, even if they have little experience or knowledge about the stock market.

Vanguard vs Wealthfront: Trading Experience

Both offer awesome trading experiences. Yet they have certain distinctions. And that can make a huge impact picking the platform.

Desktop Trading Platforms

Trading platforms comparison

Vanguard's desktop platform is built for active traders, with features like advanced charting, real-time data, and a customizable dashboard. Wealthfront's platform is aimed at more casual investors, with a focus on ease of use and automation.

Layout

At Vanguard, you have a traditional layout, with the main menu across the top and a toolbar along the left. The main menu has all the usual suspects: Accounts, Portfolios, Trade, and Research. The toolbar along the left contains all the order types, account and order management tools, and research tools.

Wealthfront takes a completely different approach. The main screen is divided into two panels: the left panel is for managing your account, and the right panel is for viewing your portfolio. The left panel has all the standard account management features: Accounts, Deposits, Withdrawals, and so on. The right panel has all your investment information: account balances, asset allocations, and performance information.

Features

Wealthfront offers various interesting features, such as automatic rebalancing, tax-loss harvesting, and account monitoring. Vanguard offers similar features and a number of unique features, such as personal advisor services and a selection of investment options that include both active and passive strategies.

Ease of Use

Wealthfront's desktop platform is easy to use and simple. It offers a wide range of features, including real-time market data, account and portfolio overviews, and the ability to place trades. You can also use the platform to manage your investments. For example, setting up automatic rebalancing and dividend reinvestment.

Vanguard's desktop platform is a little more complex than Wealthfront's, but it offers a lot more features and flexibility. You can use it to view your account and portfolio information, trade stocks and options, and access a wide range of research and education materials. Vanguard also offers a number of tools to help you manage your investments, including automatic rebalancing and dividend reinvestment.

Vanguard's platform offers a better trading experience than Wealthfront's. If you are an experienced trader, it will give you a wide range of options. Wealthfront's platform is simpler and easier to use but offers fewer features.

Mobile Apps

Mobile apps

Here's a closer look at the mobile trading experience on Vanguard and Wealthfront:

Vanguard: The Vanguard mobile app is fairly basic and doesn't offer a lot of features. However, it does offer a few key features that can be helpful for traders, including the ability to view account balances, trade stocks and ETFs, and see recent account activity.

Wealthfront: The Wealthfront mobile app is much more user-friendly than the Vanguard app. It offers a wide range of features, including the ability to view account balances, trade stocks, and ETFs, see recent account activity, and analyze your portfolio. The Wealthfront app also offers a variety of educational resources, which can be helpful for traders who are new to the market.

Overall, Wealthfront offers a sleek, user-friendly platform that is easy to navigate. Vanguard offers a variety of platform options, including a web platform, a mobile app, and a desktop app. The Vanguard desktop app is particularly robust, offering a variety of features and tools that can be customized to meet your needs.

Vanguard vs Wealthfront: Usability

Vanguard has a very user-friendly website, while Wealthfront can be a bit more difficult to navigate. Vanguard also has a great mobile app, while Wealthfront's app is not as user-friendly.

It also offers more features than Wealthfront, such as the ability to trade stocks and options. However, Wealthfront offers a few features that Vanguard does not, such as the ability to invest in real estate investment trusts (REITs) and automatically reinvest dividends.

Overall, Vanguard is the better choice for usability. However, Wealthfront is a good choice for investors who are looking for more features, such as the ability to invest in REITs and reinvest dividends.

Vanguard vs Wealthfront: Fees

Before choosing any investment platform, you must check its fees first. For example, Vanguard has lower fees than Wealthfront. So let's get into the details.

Trading Fees

Wealthfront charges $0 for stocks and ETFs, while Vanguard charges $7 for the first 25 trades and $20 for subsequent trades. Also, it charges $0.5 per month if you have less than a $10,000 account balance.

Vanguard also offers a selection of commission-free ETFs, which can be a great option for investors who want to keep their trading costs low. Unfortunately, Wealthfront does not offer any commission-free ETFs.

Overall, Vanguard is the better option for investors who trade frequently. On the other hand, Wealthfront is a better option for investors with smaller balances.

Withdrawal Fees

Wealthfront charges a $15 fee for any withdrawal made outside of the account's monthly free withdrawal limit. On the other hand, Vanguard does not charge any fees for withdrawals.

This difference can be important if you need to perform withdrawal frequently. For example, if you plan to make a lot of withdrawals, Wealthfront may end up costing you more in fees than Vanguard.

However, Vanguard may be a better option if you don't need to make frequent withdrawals because you won't have to worry about paying any withdrawal fees.

Inactivity Fees

Wealthfront charges an inactivity fee of $5 per month, while Vanguard does not charge an inactivity fee. At first glance, it may not seem like a big deal, but you should keep it in mind. For example, if you have an account with Wealthfront that has been inactive for five years, you will have paid $300 in inactivity fees.

On the other hand, Vanguard does not charge an inactivity fee, so you can leave your money in their hands without having to worry about being charged. This can be a big plus if you are not sure if you want to continue investing or not.

NonTrading/ Other Fees

It is important to look not only at the trading fees but also at the non-trading fees. For example, Vanguard has higher non-trading fees, including an annual account fee and a fee for each fund you own. On the other hand, Wealthfront has no annual account fee and no fee for each fund you own.

 

Vanguard vs Wealthfront: Investment Options

Wealthfront and Vanguard are both investment companies that offer various options for investors. However, the two companies have different philosophies when it comes to investing.

Wealthfront is a Robo-advisor; investment decision for customers comes from a computer algorithm. Finally, Vanguard is a traditional investment company, which means that it allows clients to make their own investment decisions.

Wealthfront offers a variety of investment options, including stocks, bonds, and real estate. Vanguard offers a narrower range of investment options, such as stocks, bonds, and mutual funds.

So, Wealthfront is a good option for investors who need help to make investment decisions. And, Vanguard is a good option for investors who want more control over their investment choices.

Vanguard vs Wealthfront: Account types

Vanguard and Wealthfront offer different account options, so it's important to understand the differences before you make a decision. One of the popular account is Wealthfront cash account.

Vanguard offers individual and joint taxable accounts, traditional and Roth IRAs, rollover IRAs, SEP IRA Accounts, and SIMPLE IRAs. Wealthfront offers individual and joint taxable accounts, Roth and traditional IRAs, and SEP-IRAs.

Account types

The biggest difference between Vanguard and Wealthfront is that Vanguard offers retirement accounts, while Wealthfront does not. Vanguard also offers more account options than Wealthfront.

Vanguard is the obvious choice if you're looking for a retirement account. However, if you're looking for a taxable account, Wealthfront may be a better option, depending on your needs.

Vanguard vs Wealthfront: Security

Broker security

Vanguard and Wealthfront are both highly reputable investment companies when it comes to security. However, Vanguard is the clear winner when it comes to security.

Wealthfront has been known to suffer from a few security breaches in the past. In one incident, an attacker was able to gain access to the company's systems and steal user data.

Vanguard, on the other hand, has never had a security breach. The company takes security very seriously and has a team of experts who are constantly working to keep its systems safe.

Also, it contains various features that will help to protect user data. For example, It encrypts all the user data and comes with two-factor authentication. Therefore, only users can access their accounts. And there is a minimum chance of getting hacked.

Overall, when it comes to security, Vanguard is the clear winner. Its systems are highly secure, and it has a number of features that help to protect its users' data.

Vanguard vs Wealthfront: Research Tools

Research tools

It is important to compare the research tools offered by each company. For example, Vanguard offers a robust research tool that includes a variety of data points, while Wealthfront offers a more limited research tool that focuses on key data points.

Wealthfront offers a wide variety of research reports on individual stocks, ETFs, and mutual funds. These reports can be accessed for free on the Wealthfront website and include data on historical performance, risk, and fees. In addition, Wealthfront also offers a number of premium research reports, which can be purchased for a fee. These reports include an in-depth analysis of individual stocks and ETFs and recommendations for specific investment portfolios.

Vanguard offers a number of research reports on individual stocks, ETFs, and mutual funds, but these reports are not available for free on the Vanguard website. In order to access Vanguard's research reports, you must be a Vanguard client and have a login ID and password. Vanguard also offers a number of premium research reports, which can be purchased for a fee. These reports include an in-depth analysis of individual stocks and ETFs and recommendations for specific investment portfolios.

So, which platform is better for researching potential investments? In general, Wealthfront offers more research reports for free than Vanguard, and Vanguard's research reports are only available to clients. However, Vanguard offers more in-depth analysis in their research reports than Wealthfront. Ultimately, the best research platform depends on your individual needs and preferences.

Vanguard vs Wealthfront: Support

Customer Support

When it comes to customer support, Vanguard and Wealthfront offer different options and levels of service. For example, Vanguard offers telephone and in-person support, while Wealthfront offers email and telephone support.

Both Vanguard and Wealthfront have wait times for telephone support, but the wait times are significantly shorter for Wealthfront (an average of 2 minutes for Wealthfront vs. 8 minutes for Vanguard). Wealthfront also offers a chat feature with a response time of less than 1 minute.

Wealthfront offers a more comprehensive range of support options, including email and telephone support. Vanguard offers telephone support only.

Wealthfront also offers a more personal level of service, with shorter wait times and a chat feature that offers immediate support. Vanguard offers a more comprehensive range of support options, but the wait times are significantly longer.

Vanguard vs Wealthfront: Regulation

Broker regulations

Wealthfront is a registered investment advisor with the SEC. As a registered investment advisor, Wealthfront is subject to Regulation D and the other rules and regulations of the SEC. This means that Wealthfront must comply with the requirements of Regulation D, including the requirement to limit the amount of information that is made public about private placements.

 

Vanguard is not a registered investment advisor. Vanguard is a mutual fund company that is regulated by the Securities and Exchange Commission. As a mutual fund company, Vanguard is subject to Regulation D and the other rules and regulations of the SEC. Also, it is regulated by FCA.

Is Vanguard better than Wealthfront?

Who is better?

It depends on your preference. However, when it comes to comparing Vanguard and Wealthfront, Vanguard does have the edge.

Wealthfront is a robust option for new investors. On the other hand, Vanguard is geared towards those who have a bit more experience with investing and are looking for a more customized experience.

One of the main reasons Vanguard is a better option than Wealthfront is because of the cost. Vanguard has lower fees and offers more investment options, which allows you to create a portfolio that is specifically tailored to your needs.

Wealthfront also offers a number of features that are not available with Vanguard, such as the ability to automatically rebalance your portfolio and the option to invest in fractional shares. However, these features also come with a higher cost.

Ultimately, the decision of whether Vanguard or Wealthfront is better for you comes down to your individual needs and preferences. Vanguard is for low-fee, and Wealthfron is better for a hands-off approach to investing.

Conclusion

In the battle of Vanguard vs Wealthfront, Vanguard comes out as the clear winner. Although Wealthfront offers a number of features that Vanguard lacks, Vanguard's low fees and extensive investment options make it the better choice for most investors.

Wealthfront doesn't have human financial advisors but Vanguard has financial advisor.

Wealthfront is a great option for investors who are looking for a simple way to get started with investing. However, Vanguard is the better choice for those looking for a more comprehensive investment solution.