Two of the most popular automated investing advisors are Betterment and Wealthfront. They offer many options for your portfolio and other services to their clients.

Both platforms have their benefits and drawbacks. But they are both excellent choices for managing your investments. With either one, you will pay a low annual fee to have them take care of everything for you. The only thing you’ll have to do is make regular deposits to your account.

But what if you’re new to Robo advisors, or you’re considering switching from another one? If you’re looking for information on Robo advisors, you’ll probably find information about Betterment and Wealthfront. So, look at these two big players in the Robo advisor space and see which one might better fit your portfolio.

Which is Better: Wealthfront or Betterment?


Betterment is the original Robo advisor. It also has the most significant number of clients who use a Robo advisor. Betterment is based in New York City and started operations in 2008.

Betterment is an online financial platform that manages all parts of your portfolio for you. When you sign up for the program, you fill out a questionnaire that helps you identify your investment goals. How much risk do you want to invest in attaining your goals? Based on that information, Betterment creates a portfolio of stocks and bonds that meets your investor profile.

They do not invest your money in individual securities but rather in exchange-traded funds (ETFs), each representing a different asset class. You can get exposure to the entire global financial markets using just a few ETFs.

You don’t have to do anything except fund your account and let Betterment take care of the rest. The company has an A+ rating from the Better Business Bureau and scores high marks from users on the App Store and Google Play.


Wealthfront is a company that competes with Betterment. It is based in Redwood City, California, and launched operations in 2011. Wealthfront has over $24 billion in assets under management.

Wealthfront is a Robo advisor that works like Betterment. You answer some questions to create your portfolio. Wealthfront will use a few ETFs to spread your money across different asset classes. But on more significant accounts, they also add individual stocks to get more benefits from tax-loss harvesting.

Wealthfront’s primary investment strategy, like most robot advisers, is based on Modern Portfolio Theory (MPT), which emphasizes asset allocation above individual security selection.

Like Betterment, all Robo advisors offer complete investment management for a low annual fee. All you have to do is fund your account regularly.

Wealthfront has a rating of F from the Better Business Bureau because they have not responded to complaints. However, they have 4.9 stars out of 5 from over 9,000 App Store users and 4.8 stars out of 2,700 Google Play users.

Investment Strategies Betterment vs. Wealthfront

Betterment Investment Strategy

Betterment has two plan levels: Digital and Premium. The Premium Plan requires a minimum account balance of $100,000, while the digital Plan is available to all account balances. Like other Robo advisors, Betterment offers more than just managing an essential portfolio of stocks and bonds. For example, those who choose the Premium Plan can access live financial advisors. However, there are many other services and plans from which customers can choose.

Basic portfolio mix

You can invest your portfolio in up to six stock asset classes/ETFs and eight bond asset classes/EFTs.


  • US Total Stock Market
  • US Value Stocks Large Cap
  • US Value Stocks Mid Cap
  • US Value Stocks Small Cap
  • International Developed Markets Stocks
  • International Emerging Markets Stocks


  • US High-quality Bonds
  • US Municipal Bonds
  • US Inflation-Protected Bonds
  • US High-Yield Corporate Bonds
  • US Short-term Treasury Bonds
  • US Short-term Investment-Grade Bonds
  • International Developed Markets Bonds
  • International Emerging Markets Bonds

Use of value stocks

Value stocks are investments in companies considered fundamentally sound, even though their stock prices may be low compared to other companies. These stocks will likely outperform the general market once the investment community realizes their value.

Betterment tries to do better than the stock market as a whole. It includes the S&P 500, as well as other indices.

Smart Beta

It is an investment strategy that Betterment employs, which has the potential to produce better returns than the general market. This portfolio, in particular, is managed by Goldman Sachs. Smart Beta uses active portfolio management with higher risk and rewards, looking for companies that are high quality with low volatility, strong momentum, and good value.

Since this investment entails more risk, it requires a minimum portfolio size of $100,000.

Socially Responsible Investing (SRI)

It is an investment option that Robo advisors are starting to offer. Betterment, on the other hand, will only invest a portion of your account in SRI. It means that ETFs in the International Emerging Market Stocks and US Value Stocks ETFs will replace large Cap sectors focused on socially responsible investing.

Flexible Portfolios

You can select this option if you desire more control over your investment portfolio. It allows you to change the weights of individual asset classes in your portfolio allocation. It is intended for more experienced investors and allows you to raise allocations in asset classes that you anticipate will outperform the market.

BlackRock Target Income

Betterment provides this 100% bond portfolio to customers seeking income and principal protection. There is some risk that you will lose money if the bond’s value falls. However, it is intended to be as simple as possible. You can even select your desired amount of risk and return. It will not produce the long-term returns of a stock portfolio. Still, it will provide a consistent income that can benefit retirees.

Tax-loss Harvesting

Tax-loss harvesting is a year-end strategy where you sell assets that have lost money to reduce the taxes you have to pay on money you make from other investments. Betterment offers this service to all customers, but it’s only valid for people with taxable accounts, not those with tax-sheltered retirement plans.

Betterment Everyday Cash Reserve

If you want to add a cash option to your investment portfolio, you can do it with Betterment Cash Reserve. The account has FDIC insurance for up to $1 million. Transfers are unlimited, and the minimum deposit is $10.

Betterment Checking

The Betterment Checking account allows you to manage your money in the way that best suits your financial goals. This account comes with a debit card that you can use to pay in person or online. You’ll also have FDIC insurance on your money, which guarantees your money is protected even if the bank fails.

Wealthfront Investment Strategy

Wealthfront charges 0.25% of your account balance each year, while Betterment charges 0.15%-0.35%. Wealthfront has also added more investment options for you to choose from.

Basic Portfolio Mix

Wealthfront uses 11 different types of assets to create its portfolios. These include four stock funds, five bond funds, real estate, and natural resources.

The allocation looks like this:


  • US Stocks
  • Foreign Stocks
  • Emerging Market Stocks
  • Dividend Stocks


  • Treasury Inflation-Protected Securities (TIPS)
  • Municipal Bonds (on taxable investment accounts only)
  • Corporate Bonds
  • U.S. Government Bonds
  • Emerging Market Bonds


  • Real Estate
  • Natural Resources

Use of Alternative Investments

Wealthfront makes real estate and natural resource investments. Real estate invests in businesses that have exposure to commercial real estate, apartment complexes, and retail space. Natural resources are stored in ETFs that represent that industry. The combination of the two provides greater diversification than a portfolio made purely of stocks and bonds, owing to their ability to guard against inflation. These industries have the potential to outperform the broader financial markets.

Smart Beta

The Smart Beta option is a way to do better than the traditional financial markets. It means that you don’t base how much money you put into a firm on its size. You might put more money into some companies and less money into others. But you need at least $500,000 to invest this way.

Wealthfront Risk Parity

It is another investment strategy for investors with more money and a willingness to take more risks. This strategy has been shown to provide higher long-term returns but may use leverage to increase those returns.

Stock-level Tax-loss Harvesting

You can employ tax-loss harvesting to reduce your tax bill if you have a taxable investment account. However, if your account is larger, you can use a more aggressive strategy called Stock-level Tax-loss Harvesting. It involves buying and selling stocks to take advantage of tax losses. Using individual stocks makes buying and selling securities easier without paying too many capital gains taxes. The required minimum investment for this strategy ranges from $100,000 to $500,000, depending on the specific Plan.

Wealthfront Path

It is a software-based financial advisor. It offers tools to assist you in planning for retirement, saving for a down payment on a property, or saving for your children’s college tuition. The apps run what-if scenarios to help you make projections based on different savings levels for your specific goals.

The service is free to use but doesn’t offer live financial advice.

Wealthfront Cash

You can start a Wealthfront Cash Account for as little as $1. There is no risk, no fees, and your account is FDIC guaranteed up to $1 million. The account now yields an APY of 2.55%, making it a secure location to keep your cash assets.

Set up a direct deposit with Wealthfront Cash to receive your paycheck up to two days early. They’ve also added the possibility to invest directly into the market from your Wealthfront Cash account in minutes. It means you can get paid before and start investing immediately, giving you a few more days to invest each year.

Wealthfront Portfolio Line of Credit

The Wealthfront Portfolio Line of Credit is similar to a home equity line of credit. You can borrow up to 30% of your account’s value for any purpose. There is no need to prequalify since your investment account completely secured the line of credit.

You will be automatically granted a line of credit if you have a non-retirement account balance of $25,000 or more. You can request cash against the line using your smartphone and receive it in as little as one business day. Depending on your account size, the current interest rates charged on the line range from 2.45% to 3.70% APR.

Betterment vs. Wealthfront: Retirement Planning

One of the most common applications of Robo advisers is the management of retirement funds. It includes all types of IRA accounts, just like they do with taxable accounts. But each robot advisor also offers some level of retirement planning.

Betterment Retirement Planning

Betterment is suitable for people who want to make money from their investments. They have regular portfolios, but they also have options for people who want to focus on income. The BlackRock Target Income option focuses on getting the most interest income possible.

One of the benefits of Betterment is the ability to link your 401(k) to your investment account. Betterment cannot administer the 401(k) (unless your company chooses to do so through their 401(k) management plan). Still, they can coordinate the activity in your employer’s Plan with your Betterment retirement account(s).

You can join the Premium plan, and access live financial counselors if you have at least $100,000 in your Betterment account.

Betterment also offers a Retirement Savings Calculator to help you know if you are on track for your retirement. You answer four questions. They can inform you if your existing retirement plan, including your estimated Social Security income, will provide you with the required income when you retire. If it isn’t enough, they will show you how much more you need to invest regularly.

Wealthfront Retirement Planning

Wealthfront Path can help you plan your retirement. You start by linking your financial accounts to the program. This way, Wealthfront Path can understand your finances better. Then, based on how much money you are regularly contributing. And how much you will need in retirement; the program will give you recommendations to help you reach your goals.

The Path will look at your spending patterns and how much money you save each year on average. The interest rate you’re earning on your savings and how much you contribute to investments and retirement funds. The Path will also look at the fees you’re paying on your investment and retirement accounts. Loan accounts are analyzed too.

All your financial information will be collected and analyzed to make future predictions. In addition, you’ll get tips on how much you should contribute to retirement and what your asset allocation should look like. Plus, because the service is linked to your financial accounts, it will give you real-time updates on whether or not you’re meeting your retirement goals.

Betterment Pros & Cons

There is no requirement for a minimum initial investment or account balance.

  • The fee structure was reduced for more outstanding account balances.
  • Value stocks are used to outperform the overall market.
  • You get unlimited access to licensed financial planners on account balances of $100,000.
  • A complete retirement planning bundle.
  • Limited investment diversification due to the absence of alternative asset classes such as real estate and natural resources.
  • If you choose the Premium plan, the annual management charge increases from 0.25% to 0.40%.
  • The lower charge structure for significant account balances does not apply until you reach a minimum balance of $2 million.

Wealthfront Pros & Cons

  • Alternative assets in your account include real estate and natural resources. It provides more diversification than a portfolio comprised solely of stocks and bonds.
  • The initial investment is only $500. That is not zero, but it is a reasonable starting point for most modest investors.
  • A flat fee of 0.25% is applied to all account balances.
  • Wealthfront Risk Parity provides larger accounts with more efficient tax-loss harvesting options.
  • The Wealthfront Portfolio Line of Credit allows you to borrow up to 30% of the value of your non-retirement accounts at highly low-interest rates and without a credit check.
  • There is no reduction in management fees for higher account balances.
  • The Path retirement planning tool is an automated system that does not provide live financial advisor guidance.
  • The Better Business Bureau gave it a low rating.

Wealthfront vs. Betterment: How Are They Different?

Using a Robo-advisor is an excellent place to start if you lack investment knowledge. Robo-advisors are services that help you invest your money. Wealthfront and Betterment are two of the most popular Robo- advisors. They have different benefits and drawbacks, to determine which is better for you, you might want to try both.

3 Important Differences Between Wealthfront and Betterment

When comparing the two, it is critical to know the differences between Wealthfront and Betterment. By looking at the different features, you can determine which will most likely meet your particular needs.

1. Features

Wealthfront and Betterment are both Robo-advisors. They both offer features such as tax-loss harvesting and automatic rebalancing. It means that they help you reduce the taxes you pay when making changes to your plan and also rebalance when needed. However, you should be aware of some differences between the two services.

Wealthfront offers a 529 plan. It is something not many Robo-advisors offer, and it sets Wealthfront apart. Betterment doesn’t offer a 529 plan choice, so if you want to save for college, Betterment won’t be much help.

Betterment offers human help with specific financial planning goals. You can pay a flat fee to get personalized guidance from a certified financial planner. Wealthfront focuses on using Path, and its advice engine is designed to help you independently work through these planning issues. Depending on your situation, you might like the idea of more access to human advice. Indeed, once your balance reaches $100,000, you can decide to pay a higher management fee and have unlimited access to a human wealth advisor through Betterment.

Wealthfront offers a portfolio line of credit. That is a way for you to borrow money at a lower rate if you meet specific requirements. The investments in your portfolio secure the line of credit, so it is possible to get a reasonable rate without having a high credit score.

2. Fees

Wealthfront charges .25% annually on all account sizes, while Betterment charges between .15%-.35% depending on your account size.

Betterment charges different fees for different account balances. If your account balance is $100,000, you can pay a higher management fee to get more personalized advice. Betterment also offers discounts for very high account balances. For example, you can pay .15% for a basic account or .30% if you want more personalized advice and access to planners.

3. Expense ratios

A fee charged by a fund is referred to as an expense ratio. Wealthfront and Betterment use ETFs, meaning you will have to pay this fee on top of the management fee.

Wealthfront usually charges between .06% and .13% for their funds. Betterment also uses low-cost funds. The ETFs they use have fees from .07% to .17%. However, some ETFs might have different fees.

User Experience


Betterment and Wealthfront have easy-to-use websites. Because they are both legacy digital investment managers, this should not come as a surprise. Users can access most of the features from the dashboard with one or two clicks each. Betterment investors can monitor their progress and adjust their goals using the dashboard.

Mobile App

Wealthfront and Betterment both offer apps for Android and iOS devices. The Google Play store reviews for both apps were not very good, but the reviews for the iOS app were more positive. We found that both apps were equally well-designed and could be used as the only platform for mobile-only investors.

Customer Service

Wealthfront does not have a chatbot on its website. Additionally, their phone customer service number is not as publicized as Betterments. We found that Betterment’s customer service was better than Wealthfront’s.

Is Betterment right for you?


  • No account balance minimums, only $10 to get started
  • Goal-based planning, tax-loss harvesting, charitable giving, socially responsible investing, and crypto investing are available
  • Access to certified human advisors
  • Mobile app with external account syncing options


  • You’ll have to pay to consult a human advisor unless you have the premium plan.

Is Wealthfront Right for You?


  • The low annual fee for investment accounts; crypto trust investments available
  • Tax-loss harvesting, portfolio lines of credit, and 529 college savings plans are available; you can choose your ETF portfolio allocation.
  • A cash account lets you earn 0.85%
  • Mobile app and investing and retirement tools


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

Wealthfront vs. Betterment: Which Investment App Should You Choose?

You should choose an investment app that is right for you. Wealthfront and Betterment are both good apps, but they have different features. You should consider what you need before deciding which one to use.

Wealthfront can be a good choice if you want to use a Robo-advisor to help plan for college and save money using a 529. Wealthfront can also provide an alternative way to access capital if you need a line of credit based on your portfolio.

On the other hand, if you want access to a basic account and goals-based tools, then Betterment might work better for you. Betterment offers a variety of tools designed to support goals-based planning. Additionally, it’s possible to switch your money between accounts easily. Betterment is ideal for beginners with little money because it has no minimum investment requirement.

Bottom Line

You probably know there is no clear winner between these two popular Robo-advisors. They are both excellent choices. The decision will come down to what features and benefits one offers that better suit your personal preferences and investment style. Betterment and Wealthfront are excellent services with many options for investments. They will be able to meet your needs as you get wealthier.

For example, you may start with an essential managed portfolio. Still, you’ll eventually want to invest in riskier options as your wealth grows. You’ll also enjoy the flexibility of high-interest cash investments and low-cost or free financial or retirement advice.

Frequently Asked Questions About Wealthfront or Betterment

What Is Better Wealthfront or Betterment?

Betterment and Wealthfront are two top Robo-advisors. Betterment is cheaper and has access to human advisor consultations. Wealthfront is better for people who want more investment customization options, access to index funds and ETFs, and exposure to crypto assets.

Is Wealthfront the Best Robo-Advisor?

Wealthfront is a market leader in the Robo-advisor industry. Wealthfront has a comprehensive suite of investment management tools and products.

Is Wealthfront Better Than Vanguard?

Vanguard is a good choice for most investors because it offers access to stocks, ETFs, options, mutual funds, and more. If you want Robo-advice and do not want to be involved in your investments, Wealthfront is a better option.

Who Has Better Returns, Betterment or Wealthfront?

Wealthfront’s average annual investment return is just under 8.8%. Betterment’s average annual investment return is 8.52% for its tax-advantaged portfolios and 7.62% for its taxable portfolios.

Can You Lose Money With Wealthfront?

If the value of the securities you bought using margin drops. Wealthfront might require you to add more money to your account, so they don’t have to sell the securities.

Is Wealthfront Safe?

Yes. Wealthfront offers insurance for investment accounts up to $500,000. The firm also offers FDIC insurance for cash accounts up to $1 million per account. The limit for joint accounts is $2 million.

Is Betterment Good for Beginners?

Betterment is a good investment option for beginners because it allows you to get started with a small amount of money. Betterment invests your money automatically into a portfolio that fits your risk tolerance, so you don’t need to know much about stock picking.

Is Wealthfront Good for Beginners?

Wealthfront is a good investment choice if you have at least $500. You don’t need to know much about stock picking to start.

Are Wealthfront Fees Worth It?

Wealthfront charges a .25% management fee for its services. It is in line with what other Robo-advisors charge. It may be worth it if you’re looking to have someone else manage your investment portfolio.

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