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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.
I unfortunately had an investment account with Wealthfront for 16 months and ultimately transferred everything out because of their political promotions. Wealthfront promotes and financially supports leftist politics including their main charity that seeks to create a "more evenly distributed workforce" regardless of an individual's qualifications or performance. No one thinks the NBA should seek or be required to have a "more even distribution, or match the population percentages of race and gender groups" among its players. I emailed customer service and questioned their multiple promotions of leftist politics, and customer support didn't respond because I think they're cowards that want to look good. Please do not fund Wealthfront and their leftist ideologies that harm our world.
First and foremost I want to say that out of all of my accounts Wealthfront has performed the worst. Even with an up market this account is in the negative when all other accounts are in the green. My main problem with this company is that I transferred my retirement Roth IRA over to a Wealthfront Roth IRA. Or so I thought. When I tried to transfer the funds over to my other brokerage due to Wealthfront's poor performance I was informed that Wealthfront had opened my account as a Traditional IRA.
When I confronted them about the situation I was told they do not have a department to handle this and I could email their cashier group. I told them I needed to speak to someone but once again was not given that option. After many frustrating emails I realized they were not going to help me get the account fixed. I now see I made a HUGE and expensive mistake going with Wealthfront. Please beware of this company and look into other investment avenues for your hard earned money.
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They are there and ready to help anytime. They answer all questions fast and don't make you feel like you don't know what you're doing. If there is a investment you want they already are informed. No need to go look things up. All consultants are very knowledgeable. You can spread your assets across multiple areas and they still have all understanding. It's like they do their homework ahead of time so not to waste your time. Very interesting approach to doing business. I like the modern way they do it. Fees are listed upfront not hidden so when your transaction is done you don't get a list of ten new fees you weren't aware of before. They're very transparent about this. Is one reason to do business with them They're upfront. No lies. The automated system is by far the easiest one there is even if you have no experience you can navigate real easy. It's a step by step lesson that even a novice can work. Was designed to be user friendly.
The service is pretty accurate and I received pretty much what I expected from this company. I would highly recommend it to family and friends who are looking for investments. They are very helpful. They help me understand what I am getting myself into financially and are there to help answer any questions that I have about their services. The additional fees really aren't that big of a deal for the service that I received from them. They are worth paying more for and I would expect to pay more for better services. Very easy to use with the help that I received. Before them, I had no idea what I was doing. Now I am better at what I am doing.
They were very nice and patient with me. I enjoyed talking to them, very delightful. They made it known to me that they would do whatever they could to help me through it. I was pleased with what I was seeing and it was cool. I enjoyed it very much. They were moderately priced and covered everything they should've. I wasn't upset about the additional fees at all. It was very easy to use... I knew what was going on and I wasn't confused... Everything was set in steps so I could easily maneuver around.
Whenever I have questions that need to be answered on the phone I always receive high quality service. They are very nice and polite. They have always been able to answer all of my questions in a timely manners. The customization options are quite nice. I am able to choose just the services that I need without any extra stuff I don't. I feel like I get a personalized high quality service. The fees are very low considering the type of service that they provide. Compared to other providers they are quite competitive. I have always been very happy with all of the costs associated with my account. The service is very intuitive and easy to use. Everything works just the way you would want it to. I have encountered no major difficulties and find it to be a very pleasant service to use.
They are there and ready to help anytime. They answer all questions fast and don't make you feel like you don't know what you're doing. If there is a investment you want they already are informed, no need to go look things up, all consultants are very knowledgeable. You can spread your assets across multiple areas and they still have all understanding, it's like they do their homework ahead of time so not to waste your time - very interesting approach to doing business. I like the modern way they do it. Fees are listed upfront not hidden so when your transaction is done you don't get a list of ten new fees you weren't aware of before. They're very transparent about this is one reason to do business with them, they're upfront - no lies. The automated system is by far the easiest one there is even if you have no experience you can navigate real easy. It's a step by step lesson that even a novice can work, was designed to be user friendly.
Customer service was great and they really took the time to explain things out for me whenever I needed help. Whenever I call and have a problem they will always be nice and courteous. The customization is unlike any other I have seen in the business. You can customize your messages and whatnot to fit your needs. They are some of the best in the business. They describe the additional fees that they tack on. There is really no guess work on what you are and aren't paying. It's pretty cut and dry on what you pay each night. It's pretty easy to use the program and whatnot. You can use the program everyday and cater it to your needs. It's a great program and its definitely one of the best.
Had lots of the things I like and made me feel good about the whole thing. Made me realize I made a good call, a good decision so I ended up really happy so I’m glad I made that decision. They had a lot of different plans I could use which all suited me well and I was happy about the whole entire deal. I couldn’t enjoy myself more in any way so it was very beneficial and ideal. They did the things I was looking for them to do and how I liked them to be done and in the amount of time I’d like things to be done. Nothing bad about it whatsoever. It had everything I needed to use and made things so much easier for me and there was lots of assistance in case I needed it which I like and value from a company.
On most occasions the customer service was adequate, but nothing in particular was done to go above and beyond what one would consider as exceptional service. Customization was pretty good overall. Their recommendations were good and the advice I received was pretty much adequate or on par to what I expected from their company. Some of their fees seemed fairly high considering what was being asked of them. They should look into the standard charge for such items and see if they are charging adequate prices. Their system as a whole was pretty easy to use and never remember any problems or issues that occurred at any given point in time.
The service was very fast. The workers were very kind and apologized if they were at least a few minutes late. I was impressed. I was in, then I was out! Great experience. It was very well customized to my needs and I bet to the needs of others as well. I would recommend this to my friends and family. There were not many additional fees. The price was well suited for my wallet and I was very impressed in the lack of fees that would not benefit me. I only payed for what I needed. It was also very easy to use. I love this company as well as the product they give to me. I believe my family and friends would be satisfied with how easy it is as well.
Wealthfront expert 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.
Best for: New and experienced investors seeking low fee, diversified and automated investment management.
Wealthfront Company Information
- Company Name:
- Year Founded:
- 203 Forest Ave.
- Palo Alto
- Postal Code:
- United States
- (650) 249-4258