Overview

WealthFront is an emerging automated investing service which emphasis on asset allocation with low fees. Launched in 2011, it is one of the biggest players in the robo – advisor investment from recent time which also works well with IRAs. The firm is based in Palo Alto, California and was founded by Dan Carroll and Andy Rachleff in year 2008.

It is the best robo – advisor firm which is good for investors who look for tax efficient investing. To create an automated asset allocation the firm makes use of Modern Portfolio Theory (MPT). In addition to this WealthFront don’t hold your portfolio unlike other investing firms; in fact they make use of Apex Clearing Corporation.

To offer good return to every investors WealthFront invest in ETF (Exchange Traded Fund) index funds. Apart from this the firm also offer diversified investment management with continual rebalancing in a tax efficient manner.

Just like other robo – advisors WealthFront is like having a financial advisor which is software based. WealthFront also manage different type of accounts such as personal account, retirements account, 401(k) rollovers account and other forms of individual retirement accounts.

According to recent market updates WealthFront recently announced that their firm has over $3.0 billion under management.


How WealthFront Exactly Works?

WealthFront in real uses a team of professional financial experts which is led by legendary economist Burton Malkiel who is a Chief Investment Officer at WealthFront. The working of WealthFront is similar to that of Betterment where you have to answer a questionnaire which consists of six subjective questions and four objective ones. The main reason behind answering a questionnaire is to tell WealthFront about your risk tolerance ability. Once you have filled all the required answers, the asset allocations will remain constant for the amount of money invested by you.


WealthFront Fees and Commission

WealthFront has introduced a very creative manner of strengthening their business as they use referral system for exploring business. Anyone who is registered customer with WealthFront can refer their friends and earn an additional $5,000 of free management. So if you are planning to invest with WealthFront you will be getting total of $15,000 in your account which will be managed for free. And in case the amount of $15,000 exceeds than an annual fee of 0.25 will be charged to that amount.

Apart from this the only other fee charged by WealthFront is the cost of the ETFs which is about 0.18 percent annually. This also gives WealthFront an advantage of becoming the deepest – discount brokers available in the market.


WealthFront Features and Pricing

Some of the major features which WealthFront offer to their new and existing investors are as follows:

  • Initial Deposit Required – As a new user to open an account with WealthFront you will only need an amount of $500 which is very low as compared to other firms.
  • Types of Account Available – At WealthFront you are given option to open account such as Traditional IRA, Rollover IRA, Roth IRA, SEP IRA, Non – Profit Account, Trusts, as well as Individual and joint account.
  • Free Management of first 15,000 – In case you register at WealthFront with any referential link, than you can enjoy benefit of getting $15,000 of free management.
  • Custom Asset Allocation – WealthFront automatically does asset allocation which is based upon risk profile and on the type of account you have.
  • Tax –Loss Harvesting – Another feature which WealthFront offer is tax –loss harvesting which helps in minimizing your taxable investments by offsetting your gains with losses.
  • Automatic Portfolio Rebalancing – This feature allows WealthFront to automatically buy and sell the ETFs within your portfolio in case when your portfolio gets out of whack.
  • Tax Optimized Direct Indexing – larger your taxable account the more tax efficient your account will be.
  • Automatic Deposits – Investors can also transfer their money into their account on scheduled basis such as weekly, monthly, quarterly and on 1st and 15th of every month.
  • Mobile Application Access – You can also manage your account with the help of WealthFront app which is totally free to use. Also the app is available for Google Android mobile users and Apple’s iOS users.
  • WealthFront Portfolio Review – It is a tool which is provided by WealthFront so as to analysis comprehensive portfolio.
  • External Account Support – Latest feature which is provided by WealthFront is external account support which allows investors to organize all their accounts in one place with advice on taxes, excess cash and fees charged.
  • Turbo Tax Integration – With the help of turbo tax you can automatically download your WealthFront Transactions.

As per pricing is concerned the minimum account size is $500 under which you can also withdraw amount of $250.

WealthFront Mobile App

Unlike other robo – advisors firms WealthFront also offers a mobile app for users of Android and Iphone. The firm’s mobile application for Iphone users is designed for iOS 7 users so as to give them clear view of their account at WealthFront. Another benefit which the mobile app provides is that for the first time all the retirements accounts such as Rolled – over IRA account, taxable account and Roth IRAs will be seen all in one place.


WealthFront Pros

  • Direct Indexing – In case when you are investing over $100,000 direct indexing is the best way to decrease taxes and fund expenses by avoiding ETF fees.
  • Tax Loss Harvesting available for all accounts – Earlier taxable accounts which were over $100,000 had tax loss harvesting, but according to new policies at WealthFront every account qualifies for this feature.

WealthFront Cons

  • Fractional Shares Not Available – It is not possible to have cash sitting in your account in which you have not invested.