Plus, you’ll also be able to make an unlimited number of withdrawals (typically, you can only make six). But because both Betterment and Wealthfront use ETFs, you can basically track their returns by tracking the overall market. And for the more socially-conscious investor, Betterment also provides socially responsible investing (SRI) portfolios, which allow users to pick investments that align with their values. We make every effort to maintain accurate information. Unlike Wealthfront, Betterment offers human advisers in addition to their Robo-advising capacities. But the table below summarizes and compares the basic service levels and other features offered by each investment platform: Betterment is the largest independent robo-advisor in the industry, with at least $13.5 billion in assets under management. While both Betterment and Wealthfront offer similar investment vehicles and Robo-advising services, there are some differences in their investment options. It does this by deemphasizing market capitalization as a primary factor in portfolio construction. Betterment vs. WiseBanyan â An email to Jon Stein, CEO and Founder of Betterment. Wealthfront has no trading fees. Article written by Edward Canty Ed is a financial planner and personal finance enthusiast. Betterment has been recommended for low-balance, hands-off investors who want easy access to automatic rebalancing for their portfolios and personal financial planning. A major plus of Betterment is that it offers fractional shares to keep uninvested cash at a minimum (unlike Wealthfront). So, you can essentially get the financial planning services for free (although if you do opt to start investing, you'll be subject to the 0.25% fee). However, the benchmark does not include advisory fees or trading costs due to bid/ask spreads. Both companies also use automatic rebalancing, although Wealthfront operates on threshold-based rebalancing (which means that your portfolio is rebalanced based on how your assets deviate from their target allocation, not based on time). It does this by allocating the portfolio in a way that equalizes the risk contributions of each asset class. However, all credit card information is presented without warranty. We thought it would be helpful to include a comparison of investment performance between the two robo-advisor giants. For TurboTax users, you can even input your Wealthfront information to link any tax-loss harvesting information when filing taxes. Unlike Betterment, Wealthfront uses stock-level tax-loss harvesting to invest directly in the S&P 500 (and not just ETFs). However, the Betterment results only extend through July, 2018, while Wealthfront’s are continuous, allowing us to use results through February, 2019. However, Wealthfront also offers 529 college savings accounts as well as high-yield savings accounts (unlike Betterment). Participation does require a larger account balance. Three of the most popular robo advisor platforms are Betterment, Wealthfront, and M1 Finance. For investors with more capital and a desire to work closely with an advisor, Personal Capital may be worth the higher fees. Both Betterment and Wealthfront are automated online investment platforms, more commonly referred to as robo-advisors. You can easily locate participating merchants in Betterment’s mobile app. We invite readers to respond with questions or comments. Wealthfront does require a minimum $500 investment, but has fees in line with Betterment and offers more robust investment options. These include more than 10,000 merchants across the globe, covering both online and in-person payments. Learn more about Betterment: read our full review or visit their site! Here weâll delve a little deeper into Betterment vs. Wealthfront vs. M1 Finance to help you to decide the best option for your circumstances. And, unlike Wealthfront, the company offers support by phone or email seven days a week. Wealthfront and Betterment are well-matched in terms of features, but there are some important differences. Betterment and Wealthfront are two of the top robo-advisors on the market, currently. Betterment focuses on putting investor's assets into ETFs and other low-cost investment vehicles, and also lets you set up risk preferences once you join to continue working toward your goals through the service. Learn which could be best for you by comparing their features and pros ⦠And you’ll be notified every time Betterment finds rewards for you, making it easy to keep track of how much you’ve earned. This is the Betterment vs Wealthfront vs Acorns face-off. Your portfolio will then be created from a mix of 14 different asset classes, including six for stocks and eight for fixed income investments. They're very similar, but there are a few differences that set them apart. Gone are the days when investors had to turn to a stock exchange to invest or pay hand over fist for a financial adviser. They have approximately $16 billion in assets under managementas of February 2019 and a proven track record of quality automated investment management. Opinions are the author's alone. Both Betterment and Wealthfront service a variety of different kinds of accounts, including IRAs, Roth IRAs, SEP IRAs, Rollover IRAs, individual investment, joint investment, and trust investment. You can even look for a house through the connection with Zillow.com. Now as is always the case with investment returns, these results require a significant amount of explanation. Betterment’s Premium plan offers access to live financial advisors, and an annual advisory fee of just 0.40%. Thanks to the surge of fintech in recent years, there are lots of robo-advising services available. *Disclosure: Please note that this article contains affiliate links which means that â at zero cost to you â I might earn a commission if you sign up through the affiliate link. One of Wealthfront's main draws is its stock-level tax-loss harvesting option - which won't trigger until you invest $100,000. To confirm terms and conditions, click the "Apply Now" button and review info on the secure credit card terms page. Betterment vs. Wealthfront – which is the better of the two? Betterment vs Wealthfront Tax-loss Harvesting. Betterment Cash Reserve offers a 0.40% APY. Your returns will be down, too. The differences between these two big robo-advisors largely come down to ⦠Betterment and Wealthfront have become the largest independent robo-advisors because they’ve been in the forefront of the phenomenon that is automated investing. Both companies are transparent with their performance. Performance Returns Betterment vs S&P 500. Additionally, Wealthfront has fund fees of between 0.07% and 0.16%. Betterment vs. Wealthfront vs. We report pre-tax returns because that's the industry standard. As an added perk, Betterment performs tax-loss harvesting - which maximizes your earnings by using algorithms to automatically invest in securities or investment vehicles that optimize tax losses and decrease your capital gains for reporting to the IRS. Betterment and Wealthfront are the two largest independent robo-advisors in the field, and probably the best-known. Betterment and Wealthfront are two of the top robo-advisors on the market. It really depends on the various services and features each provides that will best fit your own personal needs. While it may appear that Betterment has the better performance, be ⦠Betterment vs Wealthfront: Fees Compared Bettermentâs Pricing and Fees. We may, however, receive compensation from the issuers of some products mentioned in this article. In truth, you can’t go wrong with either of these platforms. The use of index-based ETFs and automated investment management keeps investing expenses low, maximizing your investment returns. However, Wealthfront provides the superior tax-optimized investing service through its Direct Indexing feature that it claims can amplify after-tax annual returns by as much as 2.03%. The packages address basic financial planning, such as preparing for college, marriage, and retirement. Betterment’s investment results from October, 2011, through July, 2018, show an 82.6% return, based on a portfolio with an 80% stock allocation. Todayâs comparison of Wealthfront vs. Vanguard Personal Advisor Services showcases two powerful robo-advisor options on the market right now. This is a fraction of the 1% to 2% fee charged by traditional human financial advisors. On average, Betterment claims returns can be increased by 2.66% using various tax strategies mentioned below according to the robo-advisor. Once you reach $500,000, you can join the more powerful Smart Beta product. These portfolios allow for greater efficiency with tax-loss harvesting, since individual stocks offer more flexibility than entire ETFs. Sign Up for free weekly money tips to help you earn and save more. In the final analysis, both Betterment and Wealthfront platforms. Betterment offers both taxable and tax-sheltered retirement accounts. Which is the better of the two? For a 70% stock investment, Betterment investors say upwards of 163% in cumulative returns compared to 94% for private investors with 60% to 80% equity risk. 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