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Wealthfront Review

Several names circle around at the mention robo-advisors. However, only a few of them stand out. Among them is Wealthfront – which we shall be reviewing.

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If you have had to get some pointers regarding investments, you probably are aware of robo-advisors.

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A robo-advisor is essentially a digital service that acts as a financial adviser. Robo-advisors track investment patterns on different online platforms. They then offer suggestions for potential opportunities to invest. They follow algorithms tailored to suit the client’s portfolio preference when making these recommendations.

The service has gained a lot of appeal, especially for the millennial generation. That isn’t to say it is limited to only them. Anyone seeking to invest via automated investing is welcomed to try Wealthfront. Here is everything you need to know about it.

What is Wealthfront?

Wealthfront is a robo-advisor that offers services ranging from building an investment plan to setting and attaining your financial goals. The platform was founded and launched back in 2011.

Today more than ever, making an investment is daunting if you are inexperienced. Where and how do you start? Which investment option do you choose? How will you manage your money? Who will you hire as a business manager?

These, amongst many others, are questions to which you may lack answers. Wealthfront provides an all-in-one solution, so you don’t have to lose sleep over it.

How it works

First, you are required to create and deposit a minimum of $500 into your Wealthfront account. There are several accounts available, and you are at liberty to choose one that suits you. The funds you deposit into your account are held by the Royal Bank of Canada.

Wealthfront apportions your investment amount into Exchange Traded Funds. The platform applies the Modern Portfolio Theory to develop an automated fund allocation whilst factoring in your needs and risk tolerance.

Is Wealthfront available in Australia?

Unfortunately, Wealthfront is only available in the US. To enjoy the benefits and services of Wealthfront, you are required to have a US social security number and residential address. Besides, you need to be residing in the US. US citizens that live outside the US, except for those in active military duty, don’t qualify.

Sign-up process

The process of opening an account with Wealthfront is simple.

Visit the Wealthfront website and click on the ‘Get Started’ option at the top right corner. A dialog box having an Open Account menu will pop up.

Click the blue ‘Open Account’ option. You will be provided with a bunch of details about Wealthfront, asking if you are ready.

Proceed to the next step by choosing ‘Continue.’ At this point, you’ll be required to fill your details, including the log-in credentials you will be using.

Here is the information you’ll be asked to provide throughout the registration process:

  • Name
  • Postal address
  • Email address
  • Phone number
  • Risk tolerance
  • Employment information

Tailored Transfers

This feature is exclusive to the Wealthfront platform. Usually, when migrating from one advisor or brokerage accounting to a robo-advisor, your need to sell your holdings. With Wealthfront, however, you can move your assets into a varied portfolio.

This approach effectively cuts down on your tax bill. Having said that, you still might have to trade the incompatible assets e.g. mutual funds.

Referral Program

Wealthfront has a referral program for active members. For every new customer, you refer to the platform, you get $5,000 managed at no cost.

Stock Level Tax-loss Harvesting

This feature is only available for customers with taxable accounts of $100,000 and above. Unlocking these features makes your investment more tax-efficient.

529 College Savings Plan

Wealthfront customers, except for Nevada residents, are not charged for the first $5,000. Nevada residents who are Wealth customers get free management for the first $25,000. This disparity exists because the 529 plan is domiciled in Nevada.

Smart Beta

The Smart Beta service is available for customers that have at least $500,000 in their accounts. The feature betters your returns over market indexes.

Financial Planning on the App

Wealthfront has an app that’s available at no cost at all.

Home and College Planning

On the app, you can lay down a plan for your kid’s education or home purchase. For the college plan, all you have to is choose the college. The app will then submit to you the financial aid you are eligible for. For home planning, you will receive the mortgage estimates. Besides, you can carry out a virtual house hunting.

Cash Account

This latest addition to the already stocked array of features is the cash account. Wealthfront threw in a cash account that offers a 1.82% interest rate. The account has an FDIC insurance of up to $1 million.

How Wealthfront works

Wealthfront, like many other robo-advisors, uses a questionnaire to calculate your risk tolerance and also determine asset allocation. The questionnaire is made up of both objective and subjective questions.

The asset allocation arrived at after evaluation is fixed and not affected by the investment amount. The portfolio is modified automatically after your account gets past specific thresholds.

Among the financial experts that work in Wealthfront is distinguished writer and economist Burton Malkiel. He is the Chief Investment Officer. You are probably familiar with him if you come across the investment guide ‘A Random Walk down Wall Street, ’ which he authored.

Fees Charged

Wealthfront charges a competitive 0.25% management fee. For balances under $5000, you get free management. Compared to other robo-advisors, Wealthfront has considerably low rates and charges. You also incur a small fee embedded in EFTs cost.


The minimum amount you can deposit into your investment account is $500, which is enough for an optimized allocation across various asset classes depending on the type of account.

By ‘type of account,’ we are referring to either taxable or retirement accounts. However, for the cash account, the minimum is $1. To leverage Stock-level Tax-loss harvesting, the minimum amount is $100,000.

You can fund your account through four different methods i.e.

  • Deposit cash (ACH bank transfers)
  • Wire Transfer
  • 529 accounts support Cheques
  • Transfer/ Rollover


At Wealthfront, you can withdraw a minimum of $250, and you can’t draw your account below the threshold minimum $500.

Wealthfront trades your account by routing the trade to an experienced trade execution broker. The broker must comply with FINRAs execution practices. Wealthfront doesn’t give credence to market timing and consequently can’t guarantee the timing of your trades.

Customer Support

If you experience any hitches, contact customer services either through the email or phone call. You can also refer to the platform’s FAQ that has a rich library of common inquiries and their solutions.

Wealthfront Pros and Cons


  • No fee is charged for the first $5,000 managed. You can enjoy further free perks using the referral program.
  • The risk parity option works out returns better compared to the traditional 60-40 stock and bond portfolio, respectively.
  • It has a 529 plan option – a feature that makes Wealthfront stand out since most robo-advisors tend to concentrate on retirement planning.
  • Your account is securely safeguarded using two-factor authentication
  • Offers a cash account


  • Your account may likely hold cash without it being invested

What are the best alternatives?

The best alternative Robo-advisors are Betterment and Personal Capital. Both have several useful features and offer excellent services. However, there is a variation in fee charged and minimum investment account.


All factors considered, Wealthfront performs well as an investment service. The fee charged is favorable compared to other platforms, not to mention, it offers you a cash account and several other features. It is an excellent choice if you are looking to jump on the automated investment ship for the first-time.