Wealthfront Reviews - What Is It?

WARNING: DO NOT BUY Wealthfront Until You Read This Review!
Is it a Scam? Does It Really Work?


Wealthfront is a robo-advisor that works with IRAs very well but emphasizes mainly tax efficiency for taxable accounts. It uses Modern Portfolio Theory (MPT) for the creation of an automated asset allocation. The service doesn't hold your portfolio but it uses the Apex Clearing Corporation. The latter is used by other players in this investing space. The company invests in Exchange-Traded Fund (ETF) index funds. Your investment is diversified by allocating into different ETFs. They also ensure that the asset allocation is true by automatic rebalancing. In other words, this is a software-based financial advisor. Wealthfront deals with both retirement accounts and personal accounts, including 401(k) rollovers and different forms of individual retirement accounts.

The company launched in December 2011 and claims to have more than $7.1 billion of assets under management (AUM). It has already lured new investors with an amazing offer: free management on the first investment of $10,000. However, this robo-advisor also manages larger balances and large-balance taxable accounts. The service of direct indexing uses personal securities to determine tax-loss harvesting opportunities. But it works for balances over $100,000 only. According to Wealthfront, the service can improve annual investment performance by up to 2%. The company has added management of 529 college savings plans. This option can be found in few competitors. Wealthfront is suitable for hands-off investors who are looking for free management on small balances, automatic rebalancing, as well as taxable accounts.

Customer Reviews - Does Wealthfront Really Work?

Wealthfront is associated with numerous positive users' reviews on different websites. It's no surprise, as the company truly has many precious features. Its methodology includes giving investors a questionnaire to define risk tolerance, which prevents them from making dangerous decisions. The customers are pleased with the fact that the process is completely automated. The software may rebalance when money is deposited, dividends are reinvested. The company also uses threshold-based rebalancing, which means that portfolios are rebalanced when an asset class has changed its target allocation; however, there is also a quarterly or yearly schedule. Its investment mix covers foreign stocks, U.S. stocks, emerging markets, real estate and natural resources, dividend stocks, as well as emerging markets bonds, corporate and municipal bonds, Treasury inflation-protected securities and U.S. government. The average portfolio includes seven to eight asset classes. Taxable accounts do not include real estate.

The company also offers a referral program. It means that if your invited friends to fund an account, Wealthfront will waive fees on an additional $5,000 for each of them. People using NerdWallet's Wealthfront promotion get the same deal, as well as free management on $15,000 rather than $10,000. The company also provides tax-loss harvesting on all taxable accounts every day. New customers transferring in assets get an opportunity to benefit from its Tax-Minimized Brokerage Account Transfer service. The latter incorporates current investments into the Wealthfront portfolio and holds transferred securities. For accounts with more than $100,000, the company offers tax-optimized direct indexing, which is beefed-up tax-loss harvesting. Portfolio review tool can be used by all investors. It evaluates an investor's portfolio based on taxes, fees, cash drag, returning a customized report that can help lower fees and optimize the investor's investment strategy. The tool also links outside accounts but it analyzes only taxable accounts.

Wealthfront manages 529 college savings plans, an important issue for parents. In fact, very few robo-advisors do this. The service will accompany users through opening an account, give advice on a savings goal and manage the account for an all-in fee of 0.43% to 0.46%. The fee depends on the investment expense ratios. The plan is sponsored by Nevada. It is recommended to carefully evaluate this offering, especially if your state offers a credit or tax deduction to residents who contribute. The choice of the Wealthfront 529 is expected to provide that tax benefit, too, though. Let's see what real customers of the company think about it.

"Wealthfront staff is there to help anytime. They will answer all of your questions quickly without making you feel stupid in the field of investment. There is no need to go look things up, but you can get any information online or via the phone. All consultants are knowledgeable and honest. You can spread your assets across many different areas and they will still know everything. They do their business in the modern way. Fees are not hidden but listed upfront. You don't have to be afraid of getting a list of ten new fees as soon as your transaction is done. They're very transparent about everything and this is the main reason why I am doing business with them."

"The Wealthfront service is completely accurate and clear. I received what I expected from this robo-advisor. The staff representatives are very helpful and are able to explain everything in such a way that you can understand it. They are there to answer any questions I sometimes have about their services. I am satisfied with the reasonable additional fees for the service they offer. This company is worth paying even more because they provide much better services than other companies of the kind. It is easy to use their official website too. I would recommend it to my friends and family who are looking for a good source to invest money."

"I am completely happy with wealthfront. What I like the most about them is an opportunity to ask my questions whenever I have them. All I need to do is call them on the phone and I am sure I will always receive high quality service. The company's experts are all kind and polite. The customization options are great and I can easily choose the services I need. The fees are low for the type of service they provide and compared to other competitors. I have always been pleased with all of the costs linked to my account. The service is really easy to use."

My Final Summary

Wealthfront is associated with a great number of advantages. Their special promotion link allows you to have accounts under $15,000 absolutely free. Consider the refer-a-friend offer that proves to be even more beneficial. Tax-Loss Harvesting for All Accounts is a great specialty as it helps to increase returns and to deal with taxable accounts. If you invest more than $100,000, you will decrease your taxes, avoid ETF fees and fund expenses. Free Portfolio Review allows analyzing external accounts to determine whether you can save on taxes or lower your fees. You will also receive recommendations on improving your returns. By the way, it is free for new and current clients.

529 Plan Option makes Wealthfront unique as most robo-advisors focus mainly on retirement planning. Two-Factor Authentication allows you to be assured that your account is protected from hackers. It will inform you either via an app installed on your phone or a SMS text message. The company is associated with a positive customer reputation. Most clients are amazed with their interesting approach to doing business, their transparency, and the automated system that is easy to use. The staff is user friendly. Taking into account all pros and cons, I highly recommend Wealthfront.

Wealthfront Pricing and Rates

The firm charges no advisory fee for the first $10,000 you invest, but the entire service is not free. You will need to pay for the expense ratios of the ETF holdings but the cost is extremely low. The average annual portfolio fee is 0.12% with all ETFs. When you sign up through NerdWallet, assets invested beyond $15,000 are charged a flat advisory fee of 0.25%. The maximum Annual Fee for $1,000,000 is 0.35%.