Wealthfront 2021 Review: Is It the Top Robo Advisor?

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Top perks

Low management fee

Wealthfront charges a 0.25% annual management fee for its robo-advisory services. While this isn’t the cheapest in the industry (there are a few top-rated robo-advisors with no management fees), but it is certainly on the lower end of the spectrum.

Cheap investment expenses

Like most robo-advisors, Wealthfront uses exchange-traded funds to construct client portfolios, and these have their own investment expenses. With expense ratios ranging from 0.06%-0.13% per year, they are some of the cheapest funds in the business.

High-interest savings option

In addition to its automated investing services, Wealthfront also offers a high-interest savings account to its customers for their emergency funds or rainy day cash. Currently, the account pays 0.35% APY. Wealthfront also gives customers debit card access to their money at 19,000 fee-free ATMs. 

Tax-loss harvesting

Wealthfront is one of the few robo-advisors to offer tax-loss harvesting to investors of all account sizes. The idea is that when one of your portfolio’s investment funds declines in value, Wealthfront may strategically sell it at a loss and reinvest in a similar fund. This allows you to offset any capital gains in your account, which can dramatically reduce your tax bill. And for accounts with $100,000 or more, Wealthfront offers stock-level tax-loss harvesting, which can help take your tax efficiency to the next level.

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Automatic rebalancing

This is a standard feature in the robo-advisor business, but rather than rebalancing at set times, Wealthfront differentiates itself by doing this whenever a portfolio’s asset allocation gets out of balance.

Lots of account types

Wealthfront offers standard brokerage accounts (individual and joint), traditional and Roth IRAs, SEP IRAs, Rollover IRAs, and trust accounts. Wealthfront is also one of the only robo-advisors that offers a 529 college savings plan through its platform.

Line of credit

One of the most unique features of Wealthfront is the ability to borrow against your account. If you have at least $25,000 in your Wealthfront account, you can borrow as much as 30% of the value of your portfolio with no credit check and at a lower interest rate than you’re likely to find from a personal loan. (Currently from 2.40% to 3.35% depending on account size.)

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View more information: https://www.fool.com/the-ascent/buying-stocks/best-robo-advisors/wealthfront-review/

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