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I noticed another customer who had a horrible experience with Wealthfront (Iori **) and wanted to share my own experiences with the bank, and particularly Iori. To provide a background, I had a cash only (savings account) with Wealthfront since 2019. At one point in time, when the interest rate was high, I parked my "down payment" money into the account, and over time, I have moved some of the money outside for investment opportunities. I had no issues in the past doing so. However, some 2 weeks ago, I transferred in some cash into the account and tried to transfer half of it out a week after to buy some stocks. Wealthfront kept scheduling this and cancelling my request for no reason (the bank account I was transferring from/to) were both previously used accounts.
I called the customer service, and I have countable number of times in my life received such a horrible customer service. I asked the banker/rep for the reason my transfer was being denied, and they would not answer. I asked them when I can access my money (it's savings account FDIC insured), and they had no answer. They said it was being done for security reasons. I asked them to verify my identity and schedule a transfer. At this point, I was pretty sure that Wealthfront did something with my money, and the bank was down. In a panic mode, I asked the lady if I could also record her stating that the bank is unwilling to transfer my money. She hung up the phone (expected that). Spoke to another customer service rep, and he did not have an answer. He did however ask me to convert my savings into cash (checking) and that would make the process easier. I did so, and it got approved.
Later that day, I received an email from Iori and he told me that the bank has terminated my agreement and will be transferring my funds into the bank it came from, and not to call the bank anymore (it was evening). Having told several people at Wealthfront that I had closed my other bank (and was trying to consolidate my finances), Iori kept on trying to transfer the funds into a closed account and told me to contact the other bank. When the email was sent, it was late in the evening, and I asked Iori not to initiate the transfer, and that I had cancelled the transfer. He then goes and blocks my online access, and told me not to call the bank. Exact words were "We see that you called in this morning as well. As mentioned previously, do not attempt to call us again. Doing so will result in an immediate end of the call".
A bank, that has my money (1 year worth of saved salary to be precise), wants to transfer my funds into an account that I told them is closed, and have repeatedly asked me not to. I am soon in the process of filing an official complaint with anyone I can, including with Consumer Financial Protection Bureau (CFPB) and Security and Exchange Commission (SEC). I see that several of you had similar experiences as mine, and I will be happy to collaborate. The name of the customer service rep is Iori Omura, and seems to have CFP Board (CFP) certification, FINRA Series 7, 63, 65, and 24 certificates, and I will be filing a complaint about his "manhandling of my finances" and not giving access to my own funds. If he had no trouble breaking the law, I can only imagine the kind of access (identity) he has about his customers, and what his ethics are.
I tried downloading my 1099 onto my iPad. I was previously able to open it sporadically, but now I get an error message every time. They say I have to download it onto a desktop or laptop. That has not been the case in the previous three years, nor does it explain why I was able to sporadically download it this year. They say they “can’t” mail it because the agreement specifies that they won’t mail it. It seems they should get with the 21st century and make it downloadable on an iPad if they won’t mail it.
I spoke on the phone with a very courteous woman. She maintained that they can’t mail it, but when I pointed out that they have an obligation to fulfill their end of the agreement, she said that she would reach out to another department to see what they could do. After reading other complaints, I am not hopeful. If they can’t resolve this, I have no faith in them and will withdraw my money. If I get the same problems getting my money as others have, they’ll be sued and need to pay my legal fees.
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I will file a complaint about WealthFront’s business practices at Consumer Financial Protection Bureau (CFPB) and Security and Exchange Commission (SEC). I talked with CFPB today; they told me that if more people file a complaint, they would make a case out of it, and can force the company act. Below please find my story: I opened a Wealthfront account about e years ago, and until last Friday I have not tried to withdraw money. Since they invest with ETFs, I always thought that I would be able to withdraw my money anytime I like. That was a big mistake.
I initiated a liquidation, and a risk score reduction order on Friday March 16, 2020 before the market close since it was a day when markets finally increased. I called them to confirm, and they told me that they executed neither. Then I asked them to cancel the orders (because I thought Monday would not be favorable). They said they cannot do it, the orders would go on Monday. How come they cannot stop an internal order? On Monday (the worst day in financial history since October 19, 1987), they liquidated my portfolio at super depressed prices. I checked each individual transaction: They sold everything almost at the bottom intraday. About 90% of the time during March 16, the security prices were above their sale price. How can this be? What determines their liquidation algorithm?
I ask about these on several emails since March 16; they never answered me. I called them about my emails, they never answered me properly: they never gave me details when and how my portfolio would be liquidated, what determines the timing and amount etc. They were indifferent to hostile in general. They kept saying "send us an email" as if anyone answers those emails. In my latest call today, they simply hang up on my face.
Since Friday I am trying to get my money back. They do not say when they will return my savings. Nothing is certain at that company, everything is “it depends, ago decides that etc…” Since then I warned all my friends who have accounts with Wealthfront, and all started to liquidate. My worry right now is whether they actually have the money to pay us, or they are just a nice User Interface that shows financial graphs. I will write here again if I am able get the money back.
I made the horrible mistake, the worst financial decision of my life transferring money to Wealthfront. No one works there, seriously. There's one help line that is manned by snarky women who act put out that you've called for help. They keep telling you ways to do it online even when you try to tell them you've tried--for MONTHS! They're dismissive and try to get you off the phone. Worst of all when I tried to move some of my money to my bank they said they didn't believe it was me and I had to call them. When I called they asked me questions to verify who I was that had NOTHING to do with me! Therefore I couldn't verify who I was to them and they won't give me my money. Seriously! I'm still trying to get not just a portion of my money from them but ALL of it at this point. I'm stunned that they have my money and won't give me access to it! I'm rattled and spooked by it. Still trying to get my money from them.
We're closing our Wealthfront accounts after a horrible experience with "iori" from Wealthfront Client Services. Iori was dismissive and patronizing to my wife, and flatly refused to assist with a minor request. It was disconcerting. I read the email exchange and thought we'd better get our money out before we ever need them for anything important. Definitely not a company you can count on to be decent. Not worth it considering their investment products are just average.
I put a significantly large amount of money into the Platinum Money Market Account, hoping to take advantage of the highest interest rates possible in the market. 2.57% was soon reduced to 2.32% after the Fed lowered their rates .25%. Two months later, the Fed lowered interest rates again by .25%, and within minutes, Wealthfront Platinum Money Market Account is 2.07%. As of this writing today, Vanguard is 2.11%, Citi Accelerate Account is 2.21% and BOM Harris Bank is 2.32%, which may still be reduced in the days ahead.
My point is this- Wealthfront was paying nearly the highest rates in the industry, and a couple of months later, they are paying some of the lowest rates in this market. Save me the discussion of the Fed reducing their rates, yada, yada, yada. If you are going to lead, you better LEAD. If not, you look a lot like a bait and switch company, which leaves a bad taste in the customer's mouth.
Final thought: Be wary of your ability to take money out of Wealthfront. They limit you to $250K per day, so if you have a large deposit of cash in that account, it may take you weeks to remove it. I never really understood WHY they have this restriction, unless it is to make it very hard for customers to remove their money. They accepted my incoming wire transfer for millions with no problem, yet upon removal, they want to limit you to a small amount. Buyer beware!
My investments did reasonably well, and the money market cash account is one of the best available at this point. However, the customer service isn't the greatest. I'm trying to move my investment portfolio into a charitable gift annuity. Unfortunately, Wealthfront doesn't make this easy, as they don't do any third-party transfers. It's their business prerogative, of course, but these are the kinds of things one runs into when investing with a totally online automated investment firm. Customer service simply keeps repeating that I have to read their "Can I transfer the securities in my account to another firm?" link. I have done that, and I understand what it says, but they seem totally unwilling to give me any more help than that. What it amounts to is this: When you invest with a firm like Wealthfront, chance are you're pretty much on your own. Also, you get what you pay for, so I guess I shouldn't complain.
I was looking for a good overall investment strategy that would be hands-off, and low-fee. I was considering just going with some index funds in a normal brokerage account when I learned about the world of robo-advisers like Wealthfront. After researching the options as of fall 2018, I selected two, including Betterment and Wealthfront as the current best options and industry leaders. I opened a cash account with each and invested a bit to see how this would work.
First of all, it is clear that this is a new industry and there are things about both companies that need improvement long-term. Eventually I expect more options and features from all of these companies, and even some of the details about opening an account I believe will change in the future. For example, I thought Betterment sent way too many emails, and figured there was an option to reduce it to just direct account information like trades, occasional summaries, etc., but even after contacting customer service, there was no option for that.
That said, what both firms had in place was good on the core business of holding an account, letting you choose the risk profile that will be used for the investment distribution, the actual trades and updates. The overall fees and strategy are similar, and I think both are good picks. That being said, after 6 months I made a call and chose Wealthfront from between the two. I just got a little better feeling about them, their strategy, and the extra automated benefits (tax loss and risk strategies).
I'm moving all my taxable and IRA accounts to Wealthfront, including for my wife, and had no issues getting those setup and initial transfers. I was wondering if it was possible to transfer directly from our taxable Wealthfront joint account to one of the IRAs, and called customer service. They were available and able to answer my question, but unfortunately right now direct transfers between accounts are not possible, though they said they are working on this feature (and the website also says that).
In addition, my daughter is transferring an IRA from another company - she had some difficulty due to a problem with the other company and Wealthfront customer service helped as much as they could. Ultimately she had to transfer the funds back and fix the issue at the source, but I believe Wealthfront customer service did everything they were able to do within the regulations. She is about to complete the transfer now.
I do have an MBA and prior investment job experience, and looked into some of the white papers that Wealthfront has put out explaining their risk strategy and tax harvesting. I am impressed with their approach and do believe I am making a higher return at the same or lower risk due to their automated strategy, that just wouldn't be available without a $500,000 account or more at a traditional wealth management advisor that would apply these kinds of strategies manually, and with higher fees.
One example of a strategy they use is that they will put investments that generate a lot of income into your tax-sheltered accounts, while putting more long-term investments into your taxable account. This means you can have better investment diversity without generating as many taxes. They also did a good job of locking in some short-term losses when the market dropped in December, so I was able to report losses last year, even though the market has already recovered. This not only allowed a small reduction in taxes this year, but means having a much better chance of these gains turning into long-term gains and it being a lot longer before they need to be reported. Granted I'm trading losses now for bigger gains later, but that means more money available to invest over that time - similar to why tax-advantaged retirement accounts are worth it.
In addition, if you link other outside investment accounts they will look at what is invested and use that to adjust the mix in your Wealthfront accounts, if needed. They also have a retirement estimator that is reasonable. It really doesn't have enough factors accounted for at the moment (i.e. you don't enter future expected retirement income streams, etc.), but it's a good basic tool. They just came out with a cash account option that has a good interest rate (2.24% at the moment), which I just opened and will use for short-term savings for specific purposes. In their FAQ on it they list a number of features that they will slowly be rolling out over time for it (debit card, bill pay, direct deposit, etc. ), so I'm encouraged that they are rolling out new services and looking for ways to improve overall.
So - overall I'm very satisfied. I feel they have a perfect "set it and forget it" strategy that you can use to just keep investing small amounts over time and not need to worry about managing things. I believe they pay for their fees with the automated strategies they use and the risk reduction of making sure your mix of investments is diverse - way more diverse than just investing in an S&P 500 index fund. On the downside, I do feel they try to funnel you into a lower risk strategy that is prudent for retirement savings - just putting in generic answers for my wife's account, they came up with a 7.5 risk factor when this is money that is long-term for retirement and will not be needed for 30-40 years. Thankfully, you are able to override that manually. I think there is room for improvement in extra features and smoothing out some website functions over time, but on the core functions needed for a robo-adviser, I'm all in - literally.
I've had my account for about 6 months, in just the first couple of days my account started losing money. After 6 months I was down close to $4000, while the markets were reaching all-time highs. At not one point in the 6 months was my account ever positive. I'm hoping it will recover so I can close my account and get my money back. You could practically buy anything during this timeframe and make money. Stay away from this service, if they can't turn a profit during the crazy bullish market we've been in, what are they actually doing?!
During business hours I repeatedly get a "sorry we are busy and can't answer your call" recording. When I do get through, I am told go to the website even though the transfers I am attempting to do cannot be accommodated through their website. If they want to be taken seriously, then they need to answer the phone and listen to what customers are trying to do so they can help them instead of brushing them off. If they blow me off when I am trying to transfer and consolidate other accounts into my Wealthfront account for them to manage, that is a customer service problem.
Wealthfront author review by Barbara Friedberg
Wealthfront is an automated investment manager. The Wealthfront approach offers globally diversified investment portfolios with low management fees. The firm serves investors with retirement and traditional investment accounts.
Low fees: Wealthfront focuses on keeping users’ costs down. The Wealthfront fee structure is transparent. There are no fees for investments valued at less than $10,000. All accounts valued at more than $10,000 pay an annual advisory management fee of 0.25 percent of assets under management (AUM).
Extremely tax-efficient: The daily tax-loss harvesting service manages investments to minimize taxes and maximize returns. Wealthfront claims this will increase returns by more than 1.55 percent per year.
Clearing company: Apex Clearing Corporation (Apex), an independent clearing firm holds the Wealthfront assets. Apex serves over a million customer accounts from major brokerage firms.
No outside accounts: Wealthfront isn’t set up to incorporate holdings from accounts outside of the Wealthfront platform.
Portfolio review: This free Wealthfront service analyzes the user’s investment portfolio according to fees, tax efficiency, cash drag and diversification. The review compares the consumer’s holdings with an efficient, diversified portfolio and informs individual’s how to improve their investing.
Periodic rebalancing: The Wealthfront platform rebalances consumers’ investments back to their preferred asset allocation on a regular basis.
Wealthfront Company Information
- Company Name:
- Year Founded:
- 203 Forest Ave.
- Palo Alto
- Postal Code:
- United States
- (650) 249-4258
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