Betterment and Wealthfront are both top robo-advisors, but the best option for you depends on whether you want access to a financial planner

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Betterment vs. Wealthfront: The biggest differences

Betterment and Wealthfront are two of the first investment platforms to offer automated investment advice. Created to simplify the investing process, robo-advisors use software and computer algorithms to manage your finances and investment portfolio for you. These platforms offer an alternative for investors who may not want to consult financial firms or use active/day-trading brokerages.

Both also provide an array of wealth-building solutions, including investing accounts, retirement accounts, savings accounts, and more. And you can passively invest in ETFs with both robo-advisors through web platforms and mobile apps.

But the two advisors offer slightly different pricing structures, investment portfolios, and account features. Keep reading to see how Betterment and Wealthfront compare.

Betterment and Wealthfront’s features and fees vary. Keep reading to see which automated app is best for you.

Is Betterment right for you?

Betterment is an independent automated advisor with more than $29 billion in assets under management. It offers automated individual and joint taxable accounts, trust accounts, and retirement accounts, and checking and cash reserve accounts. 

Betterment provides two investing account options: A digital plan and a premium plan. The digital account is the least expensive and carries a 0.25% annual fee. This account invests your money in stock ETFs and bond ETFs, and it offers features such as tax-loss harvesting, automatic rebalancing, fractional shares, goal-based planning, socially responsible investing, and human advisor access.

Tax-loss harvesting lets you write off, or claim, investment losses on your tax return, lowering the amount you owe in taxes. Betterment uses tax-loss harvesting to sell and reinvest any losses into securities that align with your current portfolio.

The digital plan is free to set up, but you’ll need at least $299 for a one-time advisor consultation. However, with the premium plan, you’ll get unlimited access to financial professionals.

The premium account has a $100,000 minimum — and you’ll incur a 0.40% annual fee — but you’ll get access to all of the features of the digital plan plus more. Specifically, you’ll have unlimited access to certified financial planners and in-depth investment advice.

In addition, Betterment offers several retirement accounts (traditional IRAs, Roth IRAs, SEP IRAs, and Roth IRA conversions),  401(k)s for businesses, and an investing platform for advisors.

Betterment could be a good fit if you’re looking for specific goal-based investing and retirement strategies. The platform offers five types of taxable goals: retirement savings, retirement income, safety net, major purchase, and general investing. You can also adjust these goals at any time.


could also be a good option if you’re looking for an investment app with human advisor access. But Betterment may not be the right fit if you’re looking for other specialty accounts like college savings plans.

Is Wealthfront right for you?

With more than $20 billion in client assets, Wealthfront offers investing accounts, retirement accounts, portfolio lines of credit, 529 college savings plans, and cash management accounts.

Wealthfront’s investing account provides tax-loss harvesting, financial planning tools, and access to an array of index fund investments. And, with larger balances (you’ll need at least $100,000 for stock-level tax loss harvesting and risk parity), you can take advantage of its PassivePlus portfolio features such as stock-level tax-loss harvesting, risk parity, and smart beta strategies (this feature has a $500,000 minimum).

According to its website, Wealthfront’s stock-level tax-loss harvesting aims to harvest even more losses and lower your tax bill by searching for movements in individual stocks within the US stock index. Risk parity is an asset allocation strategy that strives to enhance your risk-adjusted returns.

Smart beta, on the other hand, works to increase your returns by using portfolio diversification and other specific tactics for selecting securities.

As for its account types, Wealthfront supports individual, joint, and trust investing accounts. The advisor has a $500 minimum deposit requirement, and investing accounts include a 0.25% advisory fee and fund fee that ranges from 0.06% to 0.13%.

Its automated features also apply to retirement accounts — including traditional IRAs, Roth IRAs, SEP IRAs, and 401(k) rollovers — and education savings plans.

One distinguishing feature of Wealthfront is that it offers portfolio lines of credit. This allows you access to quick cash by letting you borrow up to 30% of your investment account at your disposal. And you can pay back what you’ve borrowed, with interest, whenever you decide. Wealthfront’s interest rates currently range from 2.40% to 3.65%.

Unlike Betterment, Wealthfront also offers a 529 College Savings plan that lets you set aside money for your child’s education. The account — which can be opened in any state — has fees ranging up to 0.46%. And you can make withdrawals without paying federal taxes.

In addition to its college savings plan, Wealthfront offers a free cash account that carries a 0.10% APY.

Wealthfront is slightly more expensive than Betterment, but this robo-advisor could be a good choice if you’re interested in using products like education savings plans, portfolio lines of credit, and high-yield cash accounts.

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Betterment vs. Wealthfront: Which is right for you?

Betterment and Wealthfront both require a 0.25% management fee for their standard investing accounts. Both investing platforms also provide tax-loss harvesting and wealth-building tools.

In addition, each robo-advisor offers individual and joint investment accounts, trust accounts, IRAs, and high-yield cash accounts; one of the biggest differences between the two is that Wealthfront offers a 529 college savings plan and portfolio lines of credit.

Unlike Betterment, Wealthfront requires a minimum account balance of $500 for its investment accounts. In addition to the 0.25% management fee, you’ll have to pay an investment fund fee ranging from 0.06% to 0.13%. And Wealthfront doesn’t offer financial planner access like Betterment does. 

Betterment and Wealthfront solely operate online. Both advisors provide competitive customer support and help centers, but Betterment may be a more suitable fit if you prefer lower fees, stronger goal-focused investment strategies, and human advisor access.

Wealthfront could be a stronger option for those who want additional features and products such as lines of credit, college savings plans, high-yield cash accounts, and stock-level tax strategies.

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