Wealthfront started with the goal of democratizing investing. That means they’ve designed investment accounts to be simple, automated, and available to everyone. While an investment account through Wealthfront may not be for everyone, there are many people out there that can benefit from their services. Our Wealthfront review below can help you decide if it’s right for you.
Wealthfront Review: The Features?
Wealthfront has a variety of features that speak to investors of all experience levels. To make things easier, you’ll first answer a quick questionnaire that helps identify your tolerance for risk with your investments. This helps allocate the funds within your portfolio to match your preference for risk. Your money can be invested in bonds, domestic stocks, international stocks, real estate, and natural resources, among others. Should your portfolio fall out of alignment with your risk tolerance, it will automatically rebalance to better match your preferences.
Another area where Wealthfront shines is its fee structure. Management fees will only cost 0.25% of your total investment. This fee, though, is waived on the first $5,000 if you sign up through NerdWallet or a referral.
Even if you don’t want to engage in their investment services, Wealthfront offers benefits. You can use their financial planning tool for free by linking your bank and external investment accounts. This tool, named Path, will analyze your financial habits to better guide you to your financial goals.
Finally, Wealthfront also offers financial tools that can benefit anyone. If you have at least $25,000 invested through them, you can receive a line of credit without needing to undergo a credit check or paying any additional fees. They also offer high-interest savings and cash accounts with competitive interest rates.
Wealthfront Review – What could be improved?
Wealthfront prides itself on its human-free services. Investments are automated, with no human pulling the strings to decide where your funds end up. However, there are times when it can be beneficial to have a human to which you can pose questions. Wealthfront, though, has no financial advisors you can speak to who can help in this regard.
If you prefer to have a more hands-on approach with your investments, you may also find yourself disappointed. For accounts with less than $100,000, the only level of customization is for risk tolerance. While you can play around with risk tolerances to find an investment allocation that works best for you, the main point of their investment services is to let automation control most aspects of your investments.
Who Is The Ideal Wealthfront Customer?
The ideal Wealthfront customer is one who doesn’t need total control of their investment portfolio. As their sole focus is to use automation to make investment knowledge more equally distributed, you shouldn’t open a Wealthfront investment account if you like to fine-tune your portfolio and take a hands-on approach. Furthermore, if you want to speak to human financial advisors to better understand your path towards your goals, you won’t find that here.
Wealthfront’s advantages make accounts ideal for those who take a set-it-and-forget-it approach. This can be helpful to those new to investing. Their automated Path tool can help with some financial decision making, too, which helps negate the inability to speak to in-person financial advisors.
Should You Choose Wealthfront?
If you have a friend, family member, or coworker with a Wealthfront account, it’s worth it to ask them if they can give you their referral code. This will let you try out Wealthfront’s investment services for free if your account balance is less than $5,000.
Of course, if you would also like a free financial planning tool, Wealthfront is for you. The Path tool can help you understand how close you are to your financial goals, such as owning a home or even just taking a vacation, and it’s easily navigable even for those inexperienced with financial planning.
Investing can be an intimidating experience. Check out the latest reviews and guides at BankingMash to better understand which tools and accounts are best for you.