Wealthfront Rating: 
Overview of Wealthfront
If you’re looking for a place to build some serious wealth, Wealthfront may be worth a shot. The financial firm offers banking, investing, and planning tools at very low cost.
Investing System
Wealthfront is an investment-advisory firm. Although it does have a broker-dealer affiliate, the company only offers managed accounts. These come in two varieties: robo and stock investing.
The robo service is a full-discretion program that offers portfolios of exchange-traded funds with various themes, like socially responsible and direct indexing. The latter one is able to invest in individual stocks. Any portfolio selected will be automated, meaning that a software program decides what to invest in. The company’s robot performs tax-loss harvesting at no additional cost.
The stock-investing account is a limited-discretion account. This means that customers get to choose which stocks to buy or sell, while Wealthfront decides the time, price, and number of shares to trade (fractional-share trading is possible in the stock-investing account but not the robo account).
Compared to a traditional brokerage account, the real downside of the stock-investing account is the curtailed lineup. Not all stocks and ETFs are available through this service. The same is true of any robo package selected. Hence, there is only a small list of tradable products at Wealthfront. There are no bonds, mutual funds, option contracts, or cryptocurrencies (although there are some crypto ETFs).
Any type of account at Wealthfront will receive SIPC protection. Assets ineligible for SIPC insurance are not available on the Wealthfront platform. The company does not offer excess SIPC protection.
For any type of account, Wealthfront does require a permanent U.S. address and a Social Security Number. U.S. citizens living abroad cannot open Wealthfront accounts.
As for taxability, Wealthfront offers retirement, joint, trust, 529, and individual accounts. The stock-investing account can only be opened in individual taxable mode.
Cash Management
Investing services are only the beginning at Wealthfront. The company has some nice cash-management features through a partnership with Green Dot Bank. A cash account is available that earns 4.80% right now. Because there’s an FDIC-sweep system in place, 20 times the normal insurance level is available.
Wealthfront’s cash account comes with some nice perks, such as early payday, the ability to send checks, and free bill pay. There’s also a Visa debit card that comes with free withdrawals at 19,000 ATMs. These are Allpoint machines, although not all Allpoint machines are free to use (Wealthfront uses a subset of them, a policy which could be a pain to navigate).
Planning Resources
The third and final service Wealthfront offers is financial education. The company’s learning materials can be used to plan for a variety of projects. Resources include:
- Home Planning Guide
- Whitepapers
- Financial Health Guide
- Equity and IPO Guide
- IRA Contributions Calculator
- Retirement
- College
The home-planning guide contains a lot of FAQs that first-time home buyers may have, such as:
- When is the best time to buy?
- What are the benefits to owning a home?
- How does a home fit in with my other goals?
These resources go into quite a bit of detail and would be a good read for both beginners and seasoned pros.
While Wealthfront’s resources are certainly helpful in some areas of personal finance, there are no significant security research tools at Wealthfront, which leads to another underperformance.
Fees and Minimums
Now we come to the $64 million question: what does all of this cost? The planning materials are free (for both guests and customers). Bank accounts have no recurring fees and no minimums. However, some transactions will come with surcharges. For example, a cash withdrawal through a human or automated teller out of network costs $2.50. There’s also an international transaction fee of 2.75%.
Investing accounts of all kinds have zero commissions, which is the best policy in this category. The stock-investing account requires $1 to open, while the robo program requires $500. Robo accounts, but not stock-investing accounts, are subject to an annual fee of 0.25%.
Website
Because Wealthfront is an advisory firm, it doesn’t have powerful self-directed trading tools on its website. The software emphasizes simplicity, and it really shows on asset profiles. These do exist, although there’s not much on them. Charts, for example, cannot be expanded full-screen, and there are no tools at all. Ten years is the maximum time frame.
A section of the website (found under the Explore tab), does deliver some curated collections of securities that stock-investing accounts can purchase. Clicking on a collection reveals the individual stocks that make up the group. Clicking on an entry produces the profile for the individual asset. Here, there are buttons that show each collection that the stock is a member of.
An individual stock’s profile has a few data points, including market cap, volume, 52-week high, and dividend yield. An ETF’s profile has these plus risk rating, expense ratio, and top 10 holdings. In both cases, profiles are rather brief, which leaves a lot to be desired, especially for investors looking for something to trade.
Mobile App
Wealthfront’s mobile app is a good place to manage all the services the company offers, although, like the website, there aren’t many tools on it. Charts are equally rudimentary, and the same brief asset profiles make appearances.
A transfer tab in the bottom menu contains some useful widgets to move accounts and money. There’s a button at the bottom of this screen to open another Wealthfront account just in case you need one. An ATM locator is on the account page, which is represented by the head and shoulders in the bottom main menu.
Mobile check deposit is available to cash accounts if (and only if) they meet two requirements:
1. Average balance of $2,500 or more across all accounts with Wealthfront
2. At least one direct deposit of $250 more
Cash accounts that don’t meet these two requirements will not find a check-deposit tool on the app.
Margin Service
Wealthfront has something called a Portfolio Line of Credit. This is a margin service that taxable automated accounts can use (notice we said “taxable automated accounts;” other account types are not eligible for margin).
Right now, margin rates are very reasonable. They range from 4.66% to 5.91%. The drawback is that $25,000 in account equity is required to tap into the Portfolio Line of Credit.
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Customer Service
The Wealthfront website and mobile app both have an email form that can be used to send a message to the customer-support desk. This channel is obviously available 24/7 (the email address support@wealthfront.com can also be used). For urgent needs during business hours, the company does offer phone support. The number is (844) 995-8437. We received quick and competent service during a test call.
On both software platforms, there is also a Help Center. This is a good place to find answers to all sorts of questions. Answers are grouped into categories, which appear as tiles. It’s easy to scroll through and find lots of good info.
There are a few (only a few) self-help features on both platforms. It’s possible to download account documents and export data to Quicken.
Neither the website nor the mobile app has a chat tool in either robo or human format. Wealthfront also doesn’t have branch locations, so the above support channels are the end of the line.
Bonus Services
Initial Public Offerings: IPOs are not available, although Wealthfront has general educational materials on the nuts and bolts of IPOs.
Fractional Shares: Available in both automated and stock-investing accounts.
DRIP Service: Automatic dividend reinvesting is available in robo but not stock-investing accounts.
Individual Retirement Accounts: Wealthfront has Roth, Traditional, and SEP accounts.
Extended-hours Trading: After-hours and pre-market trading are not available, nor is the entire day session (Wealthfront is responsible for placing trades in both account types).
Systematic Mutual Fund Investing: Not available.
Fully-paid Securities Lending Program: Not on tap, either.
Our Recommendations
Beginners: An automated account with Wealthfront would be a good bet.
Active Stock Trading: Perhaps ironically, the stock-trading account at Wealthfront leaves
much to be desired for stock trading.
Webull would be a better idea. It has decent screening tools and excellent software.
Mutual Funds: There are no mutual funds at Wealthfront, although there are 11,000+ funds at
Firstrade.
Retirement Planning & Long-Term Investing: Although it does have IRAs and 529 plans, there
aren’t many other long-term investing resources. We would head to
Charles Schwab, who offers much more.
Small Accounts: With only a $1 minimum deposit requirement, the stock-investing account is
worth a shot. But we would go with
Robinhood instead.
Wealthfront Review Summary
Although Wealthfront offers services in multiple departments, it doesn’t deliver a spectacular
performance.
