WealthFront versus Robinhood brokerage firm comparison: IRA, fees, commissions, benefits, pros and cons. Which investing service to choose?

Overview of Robinhood and WealthFront

Robinhood and Wealthfront offer deep discounts to securities traders. Despite this similarity, the two brokerage firms differ significantly in other areas. This article will help you pick the right broker.

Range of Investments

Robinhood offers its clients stocks, ETF’s (including closed-end funds), options and seven cryptocurrencies. Wealthfront is a robo-only brokerage firm, which means it provides a small selection of low-cost ETF’s; and that’s it.

Robinhood wins the first category.

Trading Technology

As an automated investing company, Wealthfront doesn’t offer much in terms of self-directed trading technology. It does have a website that offers account analysis tools. There is no browser platform, desktop software, or trade bar. We did find the broker’s website easy to use.

Wealthfront vs Robin Hood

Robinhood doesn’t provide a desktop platform or trade bar, but it does have a browser platform. During our testing, we found it user-friendly, almost to the point that it’s too simple. Nevertheless, it does provide top-notch charting software. There are two graph styles, a few technical studies, and volume. A chart can be expanded the width of the monitor.

Robin Hood vs Betterment

Robinhood’s trading ticket offers the ability to send an order during extended hours. And there are multiple order types and two duration options.

Robinhood picks up its second victory.

Mobile Apps

Although Wealthfront does have a mobile app, the platform doesn’t provide any noteworthy features. During our research, we did find alerts and a cash transfer tool.

Robinhood’s app itself is fairly simple, but manages to deliver trouble-free charting (with fewer features than we found on the browser system) and an order ticket; it has the same duration choices and order types as the website provides.

Robin Hood

Missing on both platforms are check deposit, video news, Zelle transfers, and bill pay.

Another defeat for Wealthfront.

Financial Education and Research

Although we looked hard, we didn’t find many learning materials on Wealthfront’s website or mobile app. This really shouldn’t be that surprising given its robo-only style of investing. Basic tools like screeners are not available. We did find a few articles and videos on 401(k) plans, education saving, and Wealthfront’s approach to money management.

Robinhood’s website and mobile platform both provide links to news articles on any entered ticker symbol. Some of the providers include MarketWatch, Yahoo Finance, and Seeking Alpha. Although there isn’t much in terms of investing education, there is a basic amount of security research. The broker’s software displays analyst ratings (but not pdf reports), earnings histories, option chains, and some trading data, such as average volume.

Robinhood doesn’t overly impress here, but it outperforms its rival.

Portfolio Management

With its robo service, Wealthfront finally has something to offer. The brokerage house charges just 0.25% for an automated investing service. There is a minimum starting amount of $500. On the downside, there are no human advisors available.

Robinhood offers nothing in this category and takes its first loss.

Banking Tools

Wealthfront offers an FDIC-insured cash account that currently pays a very impressive 2.51% interest rate. There are no fees, and the account requires only $1 to open. Recurring deposits can be easily established on the Wealthfront site.

Robinhood had plans in early 2019 to launch a high-yield cash account with a debit card. We’re still waiting on it.

Wealthfront is the better choice here for now.

Other Services

Wealthfront offers a 529 plan and a few IRA’s. Only regular brokerage accounts are currently available at Robinhood.

At Wealthfront, dividends are automatically used to purchase more shares of assets that have dropped in price recently. Robinhood fails to offer any type of dividend reinvesting.

Dollar-cost averaging is possible in a Wealthfront account using the broker’s default core account (the money market mutual fund TIMXX). Fractional shares of ETF’s (the bulk of accounts) are not available. Robinhood permits recurring deposits to be set up; but such funds are not automatically invested.

Wealthfront looks like the better choice on these issues.

Our Recommendations

Beginners investors should go with Wealthfront. There won’t be much of a learning curve here.

We also suggest Wealthfront for retirement savers and long-term investors. The company’s IRA’s and robo service would be beneficial for such individuals.

Traders who want to buy and sell individual stocks and ETF’s should go with Robinhood. However, better value could be found with another $0-commission broker Firstrade that offers mutual funds, IRA accounts, DRIPs and automatic investing.

Neither brokerage firm offers mutual funds; so obviously there is no good pick for them.

For customer service, we recommend Wealthfront. The brokerage firm actually posts its phone number online, which is more than Robinhood does.

Robinhood vs WealthFront - Final Thoughts

Overall, both companies seem pretty even; and the difference comes down to robo or not.


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