Wealthfront is a company that has been around since 2011. They offer an online platform that allows you to manage your investments with ease. Wealthfront has over $28 billions in assets under management, and they are one of the fastest growing investment firms in the world. In this Wealthfront review article, we are going to dig deep into their services.
Full Review for Wealthfront will be Live Soon!
Until then, the following 3 alternative brokers have been highly recommended by AtoZ team for anyone looking to make an informed decision when picking out a broker.
Wealthfront is robo advisor based investment company established in 2008 by Andy Rachleff and Dan Carroll in Palo Alto, California, USA. As of September 2021, Wealthfront had $28 billion Assets Under Management (AUM) across 450,000 clients. It is a Wealth Management and Investment Platform that provides comprehensive Wealth Management for individuals, families, institutions, advisors and financial professionals. Wealthfront has been around since 2008. They have offices in San Francisco, California; Austin, Texas; New York City; Washington D.C.; Chicago Illinois; Palo Alto California ; London UK and Sydney Australia.
Wealthfront is a great option for those who want to invest their money, but do not have the time or interest in doing it themselves. Wealthfront automates everything from rebalancing portfolios to maximizing tax-efficiency. Additionally, many of Wealthfront's services are free for those with under $10k invested.
In this Wealthfront review, we are going to explore every detail of their services. It's going to be an unbiased review and AtoZ Markets is in no way responsible for any of the opinion and information.
Wealthfront Review: How It Works
Wealthfront is a robo advisor that takes into account your investment goals and risk tolerance to create a personalized investment portfolio. Wealthfront first asks you a series of questions about your investment goals, such as when you want to retire and how much risk you're willing to take. Based on your answers, Wealthfront will recommend a portfolio that fits your criteria.
Wealthfront manages your portfolio for you using low-cost index ETFs, which are a type of exchange-traded fund with a passive management style that many investors prefer. Wealthfront uses Modern Portfolio Theory to manage portfolios and rebalance them periodically when certain triggers occur.
How Wealthfront Manages Your Money
Wealthfront manages your money for you using low-cost index ETFs that passively manage portfolios, maximizing tax-efficiency. Wealthfront uses Modern Portfolio Theory to manage your portfolio and your assets are placed in the right accounts at the right time according to how tax efficient they are. Whether it's managing taxable accounts or retirement accounts, Wealthfront is always looking out for your best interests.
Wealthfront is a great option for those who want to invest their money, but don't have the time or interest in doing it themselves. Wealthfront automates everything from rebalancing portfolios to maximizing tax-efficiency. Additionally, many of Wealthfront's services are free for those with under $10,000 in their accounts.
Wealthfront is a great investment option for those who want to invest their money, but don't have the time or interest in doing it themselves. Wealthfront automates everything from rebalancing portfolios to maximizing tax-efficiency. Additionally, many of Wealthfront's services are free for those with under $10,000 in their accounts.
Some of Wealthfront's features include:
-A personalized investment plan, created with your risk tolerance and financial goals in mind.
-Wealthfront's Tax-Minimized Portfolio, which is designed to minimize your taxes now and in retirement.
-Automatic rebalancing of your portfolio, so your investments are always in line with your goals.
-The ability to contribute to a Roth IRA or 401(k).
-24/7 access to customer support.
So, if you're looking for a hands-off investment option, Wealthfront is a great choice. To learn more about Wealthfront, visit their website at www.wealthfront.com.
Wealthfront Advantages and Disadvantages
- Wealthfront is a registered investment advisor and has been in business since 2008.
- Minimum account opening requirements is only $1 for a cash account.
- Wealthfront has over $28 billions worth assets under their management.
- Wealthfront offers a wide variety of investment options, including individual stocks, bonds and ETFs, as well as tax-advantaged accounts such as Roth IRAs and SEP IRAs.
- Wealthfront offers a wide variety of features, including automatic portfolio rebalancing, dividend reinvestment and tax loss harvesting.
- Wealthfront has a very low management fee of just 0.25%.
- Wealthfront is available in the United States, Canada, the United Kingdom and Australia.
- Wealthfront does not offer a live customer service telephone line. All customer service is provided through email and chat.
- Wealthfront has a $500 minimum investment requirement.
- They don't have any human advisors to support customers.
- They don't give you any tax advice.
- Wealthfront is only for the individuals, families and institutions in the United States, Canada, the United Kingdom and Australia.
Debit Cards and "Self-Driving Money"
In the end, Wealthfront wants to replace your bank. They recently came up with the debit card, and direct deposit facility that allows you to get the money up to two days in advance. Wealthfront's goal is to completely automate your finances across savings, spending and investments, and then make it work seamlessly, a concept called self-driving Money(tm). When you've transferred your pay to Wealthfront and paid off your debts through your Cash Account the software optimizes each dollar left. By pressing an icon, you'll be in a position to let Wealthfront automate the transfer of your funds to the accounts that are most suitable for your goals and lifestyle. The concept is that Wealthfront manages all your transactions and investments, and let its algorithms take care of all the "driving" for you.
The most recent update to this feature lets you automatically invest the extra cash that you have in either your cash account, checking or savings account. Account into different types of accounts such as traditional IRAs, Roth IRAs along with 529 College Savings Accounts. In the past, only tax-deductible cash accounts and investment accounts could be used to transfer cash excess to.
Is Wealthfront Safe?
The platform seems safe but they have some past bad records. They have been fined by the SEC for misleading investors . In addition, their CEO was forced to resign in 2016 after he was caught selling unregistered securities. Wealthfront has also received an F rating from the Better Business Bureau (BBB). The BBB lists over 25 complaints against them within the last three years. Read the following what SEC said in their press release in 2018,
"An SEC order found that Redwood City, California-based Wealthfront Advisers LLC (formerly known as Wealthfront Inc.), a robo-adviser with over $11 billion in client assets under management, made false statements about a tax-loss harvesting strategy it offered to clients. Wealthfront disclosed to clients employing its tax-loss harvesting strategy that it would monitor all client accounts for any transactions that might trigger a wash sale – which can diminish the benefits of the harvesting strategy – but failed to do so. Over a period of more than three years during which it made this disclosure, wash sales occurred in at least 31 percent of accounts enrolled in Wealthfront’s tax loss harvesting strategy. The SEC’s order also found that Wealthfront improperly re-tweeted prohibited client testimonials, paid bloggers for client referrals without the required disclosure and documentation, and failed to maintain a compliance program reasonably designed to prevent violations of the securities laws."
To read the full press release of SEC from the link below.
Wealthfront's expertly-crafted portfolios are designed to reduce risk via diversification, and are optimized for the long-term -- all included in a single, low 0.25 percent annual advisory fee.
They provide 200+ investment options with different categories like tech, clean energy, stocks, EFTs, and cryptos.
They don't have any manual trading option. They automatically diversify your portfolios with tax saving options.
Wealthfront offers a wide range of account opening options once you sign up. You can choose any of the following:
Currently Wealthfront offers three types of cash accounts. Individual Accounts, Joint Accounts and Trust Accounts.
Individual Cash Account
Wealthfront Cash account comes with both checking and savings features in a single account. It accepts paycheck, pay bills, and debit cards. They also give you interest on your balance.
It doesn't take a lot of time to open a cash account in Wealthfront. Once you deposit your funds, you will get the options to add features of a checking account.
Overview of Individual Cash Accounts:
It gives 0.10% APY on your full balance.
It gives $1 million insurance to FDIC with their banking partners.
You can directly deposit your paycheck.
You can pay bills and make payment with your routing and account number.
They have 1900 ATMs without any fee. You can use your Wealthfront debit card to withdraw cash.
Account account doesn't have any account fees and overdraft fees.
This account doesn't have any transfer fees, and no minimum balance fees.
They have fraud monitoring activated as per their claims.
Only $1 to open an account with no additional requirements.
Joint and Trust Cash Accounts
For Joint and Trust Account, checking features are not available.
These accounts also give its customers a 0.10% APY with up to $1 Million insurance from FDIC through their partner banks. They come with unlimited free transfers. For these type accounts, minimum account opening balance is $1.
Retirement Investing (IRAs)
Eligible individuals can get tax benefits by using IRAs (Individual Retirement Accounts). Wealthfront offers Traditional IRA, Roth IRA, SEP IRA and 401 (k) Rollovers.
In Traditional IRA, you may get a penalty if you withdraw before the age of 59.5 years. And it's mandatory to withdraw after the age of 70.5.
Roth IRA: A Roth IRA is a special retirement account that allows you to contribute after-tax money and withdraw the contributions and earnings tax-free during retirement. To open a Roth IRA account, there are income limitation. Check their website to know the income limits.
SEP IRA: A SEP IRA is a kind of retirement account that lets self-employed individuals and small business owners save for their retirement. A key benefit of a SEP IRA is that it has a higher contribution limit. It allows you to contribute up to 25% of your income or $57,000, whichever is less.
401(k): A 401(k) is also a kind of retirement account offered by many employers. Employees contribute pre-tax money to the account and withdrawals are taxed as ordinary income in retirement.
529 College Savings Plan Accounts
The 529 plan is an account particularly created to save for your children's college. You can utilize it to spend for qualified greater academic expenses, which might include tuition, room and board, and books.
Like a retirement account, a 529 account also has tax benefits that aid you to save a lot more.
That means you may cover up to 20% more of those instructional expenditures than with a conventional financial investment account.
$1 is the minimum amount to open an investment account with Wealthfront.
It takes an advisory fee of 0.25% of assets. For example, if you have an account of $10,000, you would have to pay $25 every year.
For 529 College Savings Account, your fees would be between 0.42% to 0.46% including that 0.25% advisory fees.
Wealthfront charges Expense ratios for EFTs and mutual funds. The fees range from .03% to 0.39%.
To get Line of credit, you need to have a $25,000 minimum investment with an APR of between 2.40% and 3.65%.
Is Wealthfront Customer Support Good?
Customer interactions with Wealthfront are nearly all digital. The vast Help Center answers most commonly asked questions. Those who have an account with Wealthfront, can call a number Monday through Friday between 10 AM and 8 PM ET time zone. However, there is no online chat feature , nor an advisor in person.
Is Wealthfront Regulated?
Wealthfront is not directly registered with the SEC. But Wealthfront Advisors is registered with the SEC. These two are the subsidiaries of Wealthfront Corporation along with Wealthfront Brokerage. Wealthfront Brokerage is a member of FINRA / SIPC. So Wealthfront is not directly regulated by any authorities. The investment and advisory services are provided by Wealthfront Advisory to Wealthfront.
In short, yes. Wealthfront could be a good option for those looking to invest, especially if you're new to the investment world. The company has a lot to offer, including a wide variety of investment options and excellent customer service.
Wealthfront also offers some unique features, like socially conscious investing. And, because of their low fees, you get to keep more of your money than if you used another company. But before jumping into Wealthfront, do some research about their past records for which the SEC had fined them.
Our mission is to provide online investors with the most unbiased, comprehensive reviews and ratings of self-directed brokers. Vetted by multiple industry experts - including a financial research firm with more than 20 years of experience in broker ratings - Our Broker Ratings and Reviews embody industry best practices for research design.