Wealthfront Review [2024]: Automated Investing with an Advisor’s Touch

Want to pay minimal fees to have your investments managed for you? Wealthfront could be just what you’re looking for.
Updated April 11, 2024
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Wealthfront1 makes it possible to invest in a diversified portfolio of funds, customized according to your goals as an investor. With minimal fees and no guesswork into which investments you should choose, Wealthfront brings a lot to the table.

We’ll cover all these details in this Wealthfront review. So let’s take a look to see whether this investment platform might provide the experience you’re looking for.

Quick Summary

Investing on Autopilot

  • Get a $50 bonus when you fund your first taxable Investment Account
  • Globally diversified portfolio
  • Automated tax-loss harvesting makes the service basically fee-free
In this article

What is Wealthfront?

Wealthfront is a robo-advisor that gives investors the ability to save for the future, even if they don’t have the time or money for hands-on investing. Wealthfront’s automated planning and investing build a custom investment portfolio of low-cost, exchange-traded funds (ETFs) designed to maximize returns while remaining balanced to reflect your level of risk. You can also further customize your portfolio or build your own from scratch. 

Wealthfront is the first service to combine exposure to cryptocurrency with automated investment features like dividend reinvestment and tax-loss harvesting. You can now add Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE) to your Wealthfront portfolio. Wealthfront also offers access to innovative opportunities such as ARK ETFs, socially responsible investments, and cannabis ETFs.

With an advisory fee that’s just a fraction of the price of the industry average and a minimum investment requirement of $500, signing up with Wealthfront is an affordable way to begin investing.

Wealthfront: The basics

Investment account minimum $500
Management fees 0.25% annual advisory fee
Fund fees 0.06% to 0.13%
Account types available Traditional IRA, Roth IRA, SEP IRA, 401(k) Rollover, 529 College Savings, Individual, Joint, Trust
Asset classes
U.S. stocks, foreign stocks, emerging market stocks, dividend stocks, real estate, treasury-inflation protected securities, municipal bonds, corporate bonds, U.S. government bonds, emerging market bonds, natural resources
Features Automatic rebalancing, tax-loss harvesting, free financial planning
Visit Wealthfront

How does Wealthfront work?

With Wealthfront, you can invest in one of their recommended portfolios, adjust one of the recommended portfolios, start a new portfolio and build it yourself from scratch, or bring an existing portfolio over from another brokerage firm. You can even choose to invest in particular categories like socially responsible investing (SRI), technology ETFs, or healthcare ETFs.

If you use a Wealthfront portfolio, you should know that they use software that automatically builds a diversified portfolio of low-cost ETFs across 11 global asset classes. Your investment portfolio is customized according to your level of risk tolerance and is monitored and automatically rebalanced to maximize long-term returns. These low-cost ETFs come with an expense ratio between 0.06% and 0.13%. An expense ratio is an annual fee charged by the company that runs the investment fund.

Instead of an investment strategy based on emotion — think fear, greed, and overconfidence — Wealthfront uses its proprietary suite of rules-based investment strategies, known as PassivePlus. 

In general, rules-based investment strategies seek to follow various predetermined investment rules. Through a software-driven approach, Wealthfront can automate these strategies to make them more affordable for users. Wealthfront charges an advisory fee of just 0.25%, compared to the industry average of 1.06%, according to the most recent report on The State of Retail Wealth Management by PriceMetrix.

Tax loss harvesting 

The software also continuously monitors your investment portfolio to minimize your taxes and maximize tax efficiency. When an investment is underperforming and declines in value, selling at a loss can offset taxable capital gains or up to $3,000 (for a married couple filing jointly) of ordinary income, which can reduce your overall tax bill. 

The money received from the sale of the investment is then used to purchase a similar investment so your risk and potential returns of your portfolio are unchanged. This is known as tax-loss harvesting

Unlike traditional investment platforms that may offer tax-loss harvesting once a year, Wealthfront offers daily tax-loss harvesting. According to an analysis done by Wealthfront, taking advantage of their tax-loss harvesting feature could more than make up for the cost of your advisory fee. 

In fact, on average, Wealthfront was able to harvest losses ranging from 9.53% to 18.26% of their clients' portfolio values between January and October of 2020, depending on the client's chosen risk score. That means, for example, that clients with a risk score of 8 earned an average estimated after-tax benefit of 6 to 13 times the Wealthfront advisory fee.

Other Wealthfront features

In addition to its brokerage accounts, Wealthfront offers free financial planning tools, a handy mobile app, and a cash account so you can plan and save for what’s important. 

Wealthfront Cash Account

Wealthfront's cash account offers an APY of 5.00%.2 It also offers ATM access and a debit card and has no account fees. 

Unlike traditional savings accounts, which are typically insured up to $250,000 by the FDIC, Wealthfront cash accounts offer up to $8 million in FDIC insurance for solo accounts and up to $16 million for joint accounts.3

Automated financial planning 

Wealthfront offers a free tool called Path that gives you a clear view of your financial situation. You can connect your various financial accounts, like your 401(k), mortgage, and credit cards, to get an overview of your income, any debts you may have, and your cash flow. 

You can also set long-term goals, such as saving for a vacation, and Path will create a plan to help you achieve them. Wealthfront also recently introduced Autopilot, a feature that works with Path. When you deposit your paycheck with Wealthfront, Autopilot's algorithm will help you prioritize building your emergency savings fund and invest the rest for the best possible return.

Line of credit

If you have a Wealthfront portfolio of at least $25,000 in a taxable account, you can also borrow against a portfolio line of credit with no credit check. Interest rates on the line of credit range from 7.65% – 8.90% (as of Jan. 10, 2024). 

Who can use Wealthfront?

Wealthfront is a robo-advisor, which makes it best for hands-off investors. Although a good option for beginner investors who don’t want in-depth control over their portfolio allocation, experienced investors can also benefit from Wealthfront’s automated investment management. 

The Wealthfront cash account, 529 college savings plan, retirement accounts, helpful planning tools, and advanced tax optimization strategies make it even more appealing. If you are looking for guidance from a financial advisor, a platform like Betterment may be a better fit.

Due to financial regulations, you must meet the following requirements to open an account with Wealthfront:

  • Be at least 18 years old
  • Have a U.S. Social Security number
  • Have a permanent U.S. residential address
  • Currently reside in the U.S.

How much can you earn with Wealthfront?

Wealthfront is an investment platform, and all investments involve some degree of risk. Although returns are impossible to predict, your investments will perform depending on how much risk you’re willing to tolerate. 

In general, the more risk you’re willing to take, the greater the potential return. Wealthfront shares its historical returns, but past performance is not necessarily indicative of future results.

Maximizing your earnings with Wealthfront

Returns are almost impossible to predict, but Wealthfront helps to maximize your earnings in the following ways:

  • A diversified portfolio: Wealthfront invests your money across many global asset classes, so your money is diversified. This should help reduce the overall volatility of your portfolio. Although a diversified portfolio might underperform the top-performing asset class, not all your eggs are in one basket. If you invest in one asset class and that asset class underperforms, you have no other investments that can offset the loss. You can also choose to invest in innovative industries like cannabis, self-driving cars, and cryptocurrency.
  • Minimal fees: High fees can eat into gains quickly. With Wealthfront, fees are minimal. You’re charged an annual advisory fee of just 0.25%, and Wealthfront only invests in low-cost ETFs.
  • Minimizing your taxes: Wealthfront checks your portfolio and automatically makes adjustments to lower your tax obligation. By reducing the taxes you pay, you have more money to invest and grow. You can also further optimize your tax savings by taking advantage of the new U.S. Direct Indexing feature that allows you to invest in individual stocks.
  • Automated transfers: Wealthfront's technology makes depositing money into your accounts automatic and simple. You can link an external checking account or your Wealthfront Cash Account and tell Wealthfront what the threshold is for the maximum balance you want to keep in that account. When your balance exceeds that amount, Wealthfront will automatically transfer the excess money into your chosen Wealthfront account. You can set it to transfer to a 529, traditional IRA, Roth IRA, Cash Account, or Taxable Investment Account.

How to stay safe investing with Wealthfront

When you sign up for an account with Wealthfront, you choose what level of risk you’re willing to take and Wealthfront customizes your portfolio accordingly. 

All investments come with risks, but everyone’s situation is different, and everyone has a different investment timeline. If you’re young and have time on your side, you can afford to take on more risk for greater potential returns. 

Although you might see higher losses, you typically have more time to rebound from them. If you’re planning to retire in the near future, however, it’s generally recommended to reduce the risk in your portfolio, as you’ll soon be relying on this money.

Common questions about Wealthfront

How good is Wealthfront?

With low advisory fees, free planning tools, and an automated investment strategy, we feel Wealthfront is a good investment service for both beginner and experienced investors who prefer hands-off investing.

Is Wealthfront safe to use?

In short, yes, you can trust Wealthfront. Wealthfront outlines its approach to investing in its investment methodology white paper so you can better understand how your money is invested. In addition, you can withdraw your funds at any time without fees if you no longer want to use the service. 

Although there is no protection against loss of market value of your investments, your investment account is insured by the Securities Investor Protection Corporation up to $500,000 in total against loss if Wealthfront fails.

As of January 2024, Wealthfront has over $50 billion in assets under management (AUM). The use of robo-advisors is also expected to increase considerably in the coming years. Research from Charles Schwab indicates that 60% of American consumers plan to use robo-advisors by 2025.

Is Wealthfront good for beginners?

Wealthfront is a good option for beginner investors as it doesn’t require you to be hands-on in your investment strategy. Using software, Wealthfront customizes your portfolio based on your risk tolerance and automatically rebalances your investments to maximize returns.

Is Wealthfront good for experienced investors?

Wealthfront is also a solid option for experienced investors. Investors with account balances over $500,000 get access to Wealthfront's Smart Beta feature, which automatically adjusts the weighting of portfolio securities to help maximize returns.

Experienced investors will also appreciate Wealthfront features such as stock-level tax-loss harvesting, which can help minimize tax bills; and risk parity, an asset allocation strategy that can also help maximize returns.

Does Wealthfront pay dividends?

Wealthfront offers ETFs that pay dividends.

Which is better: Wealthfront or Betterment?

Whether one platform is better than the other depends on what you want in an investment service. Both services charge similar fees, and both invest in low-cost ETFs. 

The minimum required deposit to open an account with Wealthfront is $500, whereas a minimum balance isn’t required for a Betterment Digital account. You can compare Wealthfront vs. Betterment to determine which option is better suited for you.

Which is better: Wealthfront or Stash?

Wealthfront and Stash offer two different approaches to portfolio management, as well as different pricing structures and investment options. 

Wealthfront charges a .25% annual advisory fee for choosing your investments, and Stash offers two subscription plans ranging from $3 to $9 per month. It also gives you control over the stocks and ETFs you want to invest in. 

Whether one is better depends on the type of investment service you are looking for. By comparing Stash vs. Wealthfront side-by-side, you can determine which features and approaches better suit your investing goals.

How to sign up for Wealthfront

It takes just a few minutes to sign up for a Wealthfront account. Here’s how:

Step 1: From the Wealthfront homepage, click “Get Started” in the top right corner. 

Step 2: From there, choose whether you want to start with a Wealthfront investment account or start with banking, which involves setting up a cash account. If you click "Start with investing," Wealthfront asks what you're investing for. Your options are general investing, retirement, and education. 

Wealthfront screenshot

Step 3: The next page will ask you whether you want an individual, joint, or trust account. 

Wealthfront screenshot

Step 4: From there, Wealthfront asks you for your personal information to help you set up a secure account.

Other investment apps to consider

Wealthfront provides clients with an automated, hands-off, and tax-efficient approach to investing. This, along with Wealthfront’s free planning tools and low advisory fees, makes it an appealing passive investment service. However, it might not be right for you. If that’s the case, you may want to consider other investment accounts.

As mentioned above, Stash is an investing app that provides a more hands-on approach to investing, if that’s the type of investment strategy you’re looking for. With two subscription options ranging in price from $3 per month to $9 per month, you can choose the one that best aligns with your financial goals. With Stash, you can invest in individual stocks, as well as ETFs. Stash also offers the option to invest in fractional shares of companies, which means you can get started with any dollar amount.

Or maybe you’re eager to start investing but don’t want to get started in stocks. In that case, you may want to consider Fundrise. With Fundrise, you can get started investing in low-cost, diversified portfolios of real estate projects that Fundrise manages on your behalf. Depending on your experience, Fundrise offers five account levels to choose from. But if you’re just getting started, you can start investing in real estate with Fundrise’s Starter Account for just $10.

See more of our picks for the best investment apps.


Wealthfront Benefits

  • Fund your first taxable Investment Account and get a $50 bonus
  • Globally diversified portfolio
  • Automated tax-loss harvesting makes the service basically fee-free
  • Algorithmic, rules-based investment strategies
Visit Wealthfront

Author Details

Matt Miczulski Matt Miczulski is a personal finance writer specializing in financial news, budget travel, banking, and debt. His interest in personal finance took off after eliminating $30,000 in debt in just over a year, and his goal is to help others learn how to get ahead with better money management strategies. A lover of history, Matt hopes to use his passion for storytelling to shine a new light on how people think about money. His work has also been featured on MoneyDoneRight and Recruiter.com.