Which platform should you choose?

Wealthfront vs Vanguard: The biggest differences

Wealthfront and Vanguard offer multiple investment options and account types for retail investors. But while Vanguard is


Online Mediation

Wealthfront provides automated portfolio management only with DIY investing and automated investing.

You’ll pay less to create an automated investment account with Wealthfront (minimum $500 USD; The avant-garde digital guide and Vanguard Personal Advisor Services require $3,000 and $50,000, respectively), but your overall choice of investment will be more limited compared to Vanguard.

Vanguard is best for most types of investors, as it provides access to stocks, ETFsoptions, mutual funds, and more. If you are a passive investor and are strictly looking for automated advice, Wealthfront is the best option. The account also offers an investment type that equivalent Vanguard accounts don’t have: Crypto Trust.

Is Wealthfront Right for You?

Welthfront is an automated investment platform (also known asrobot advisorPresentation of individual and joint investment accounts, IRAsand 529 plans, trusts, and cash accounts.

It stands out from other popular automated accounts because its investment selection consists of more than just ETFs; Wealthfront also offers crypto trusts (for example, Grayscale Bitcoin Trust [GBTC] The Grayscale Ethereum Trust [ETHE]) And the index funds. It uses many strategies – including tax harvesting, direct US indexing, risk equalization funds, and smart pilot investing – to build wealth for its users.

Keep in mind, however, that you’ll need a minimum balance of $100,000 to use US Direct Indexing (formerly known as stock-level tax loss harvesting) and risk equalization. You will need at least $500,000 for smart beta strategies. Wealthfront says the smart beta aims to increase your returns by weighting your portfolio investments more strategically.

With the tax loss harvest, the


robot advisor

It aims to reduce your taxes by limiting losses to your portfolio. The same goes for its direct indexing strategy in the US, except that strategy strives to offset losses in stocks within an index, according to Wealthfront. However, a risk equalization fund is strictly aimed at maximizing your risk-adjusted returns.

Investment types

ETFs, Index Funds, and Crypto Trust Funds

Investment types

ETFs, Index Funds, and Crypto Trust Funds

Positives

  • Low annual fees for investment accounts; Crypto trust investments available
  • Tax Loss Harvest, Portfolio Credit Lines, 529 College Savings Plans Available
  • cash account
  • Mobile app and investment and retirement tools

Negatives

  • You need at least $100,000 to use additional investment strategies
  • No access to a human advisor


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  • Consider if: You are balancing several goals and want to simplify your finances.

Is Vanguard Right For You?

Dating back to 1975, Vanguard is an online brokerage with individual and joint accounts, automated investment accounts, managed portfolios, trusts, trust accounts, IRAs, and more.

Unlike Wealthfront, Vanguard offers a wide range of self-directed investment accounts. This means that you will be making trading decisions for your account, unlike those who use automated advisors.

The online brokerage also offers commission-free stocks, ETFs, and options, and you don’t need to meet the minimum account size requirements to trade with a self-directed account. You will mainly encounter minimum account balance for automated and advisor-guided Vanguard accounts, Vanguard Digital Advisor and Vanguard Personal Advisor Services.

Minimum account

$0 ($3,000 for Vanguard Digital Advisor; $50,000 for Vanguard Personal Advisor services)

expenses

0% (0.20% to 0.30% for professionally managed portfolios)

Investment types

Stocks, ETFs, options, bonds, mutual funds, and CDs

Minimum account

$0 ($3,000 for Vanguard Digital Advisor; $50,000 for Vanguard Personal Advisor services)

expenses

0% (0.20% to 0.30% for professionally managed portfolios)

Investment types

Stocks, ETFs, options, bonds, mutual funds, and CDs

Positives

  • Commission-free stocks, ETFs, and options
  • Brokerage, automated and advisor-managed accounts are available
  • Thousands of low cost mutual funds
  • Multiple resources with expert analysis and market insights
  • Many retirement accounts and services for pension plan participants

Negatives

  • Options contract fees are higher than other discount brokers (Vanguard fees $1 per options contract)
  • There are no separate trading platforms for advanced traders; No broken arrow
  • No cryptocurrency


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  • Promotion: None at this time.
  • App Store Rating: 4.7 iOS / 1.8 Android
  • Consider If You: A long-term focused investor looking to access a variety of account types and investment options.

Wealthfront vs.Vanguard – Frequently Asked Questions (FAQ)

Is Vanguard better than Wealthfront?

Vanguard offers a wide range of Wealthfront investment and account types. In addition, its product selection includes both self-directed investment accounts and automated or advisor-directed accounts. It is a better choice for many investors.

WelthfrontOn the other hand, it is suitable for automated investors who want to create wealth through automated investment accounts. Additionally (and because Wealthfront is only designed for automated advice), you’ll be able to take advantage of tax harvesting and direct indexing strategies, Crypto Investmentsand much more.

The best option for you depends on your investment goals and preferences.

Is Wealthfront Worth the Fee?

This depends on what you are looking for. If you want the option to invest in assets like ETFs, index funds, and crypto funds (and don’t mind the $500 minimum fee and 0.25%), Wealthfront is a competitive option. The platform also offers tax harvesting, direct indexing, and much more.

Costs also include fund fees that range from 0.06% to 0.13%. Interest rates on portfolio lines of credit (this product allows you to borrow up to 30% of your investment account) range from 3.15% to 4.40%.

If you plan to save your child’s education costs, you can unlock it automatically 529 . plan. The fees for these accounts can be as high as 0.46%, but you will get tax-free withdrawals in the process.

Can you lose money with Wealthfront?

yes. Like any investment platform that offers investments, no security you buy is immune to market volatility and


volatility

.

How much money do you need to open a Vanguard account?

You do not need to meet a minimum to open a self-guided Vanguard brokerage account. When it comes to automated investing, though, you’ll need at least $3,000 for Vanguard Digital Advisor and at least $50,000 for Vanguard Personal Advisor Services.

Is Vanguard good for beginners?

Both accounts are great options for beginners or those who don’t want to trade without expert insights. The first, Vanguard Digital Advisor, invests your money in a diversified mix of Vanguard ETFs. Expense ratios represent the additional annual fees that funds charge investors, while Vanguard’s ETFs have an average of 0.6%


expense ratio

. Additionally, this account has a minimum account balance of $3000 and 0.20% annual fee.

Vanguard Personal Advisor ServicesOn the other hand, it combines automated portfolio management with individual advisor guidance. The account gives you access to Vanguard


Asset Allocation Consultant

Consultant, and has a minimum annual fee of $50,000 and 0.30%.

On the retirement side, Vanguard One Ops Wealthfront. Wealthfront only offers Traditional IRAs, Roth IRAs, and SEP IRAs. Vanguard offers these accounts in addition to simple IRAs, 401(k)s, and multiple all-in-one retirement funds.

In addition, it contains many resources – such as the Investor Education Library and the “News and Perspectives” hub – that help newcomers and beginners familiarize themselves with investing.