Betterment and Wealthfront are two of the oldest, biggest, and best robo-advisors around. They have been in competition ever since the two have existed and offer similar products.

That makes choosing one over the other a confusing proposition. In this guide, we’re going to help you select one by comparing the two robo-advisor giants side-by-side.

Both are worthy of consideration for any investor looking for an excellent robo-advisor. In fact, Betterment and Wealthfront are two of the best in the business. Each continues to innovate and refine its product offerings to provide more and better options to their clients.

Let’s start with a review of Betterment vs. Wealthfront…

Betterment vs. Wealthfront

The table below provides a side-by-side comparison of the basic features of Betterment vs. Wealthfront:

Minimum Initial Investment$0$500
Advisory FeeDigital: 0.25%
Premium: 0.40%
0.25% on all balances
Available Account TypesIndividual & joint taxable accounts; traditional, Roth, rollover & SEP IRAs; trust accountsIndividual & joint taxable accounts; traditional, Roth, rollover & SEP IRAs; 529 college savings & trust accounts
Automatic RebalancingYesYes
Automatic Dividend ReinvestmentYesYes
Tax-loss HarvestingYesYes, plus stock level tax-loss harvesting (Direct Indexing)
Asset Classes(13) 6 stock, 7 bond classes(11) 4 stock, 5 bond, 2 alternative classes
Socially Responsible InvestingYesYes
Interest-bearing Cash ReserveYesYes
Debit CardYesYes
Portfolio Line of CreditNoYes
Special FeaturesGoldman Sachs Smart Beta, BlackRock Target Income, Flexible Portfolio, Financial Advice Package, Premium clients have unlimited phone access to CFPsRisk Parity Fund, Cryptocurrency Trusts, Add/Delete ETFs from your portfolio, Smart Beta ($500,000+ balances), Import tax data into TurboTax
Human Financial AdviceYesNo
Customer ServiceMonday – Friday, 9:00 AM – 6:00 PM, Eastern TimeMonday – Friday, 8:00 AM – 5:00 PM, Pacific Time
Mobile App AvailabilityiOS & Android devicesiOS & Android devices
Current PromotionNoneFirst $5,000 managed free

About Betterment

Launched in 2010, Betterment is generally considered to be the first robo-advisor. A robo-advisor is an automated, online investment service that provides complete investment management at a low fee compared with traditional, human investment advisors.

This is done using computer algorithms and is based on what is known as Modern Portfolio Theory (MPT). This is an investment strategy that emphasizes asset allocation over individual security selection. The robo-advisor determines the optimal mix of asset classes and invests in each through exchange traded funds (ETFs). These are low-cost, index-based funds that hold hundreds or thousands of individual securities, tracking particular asset sectors, like US and foreign stocks and bonds.

Betterment has continued to improve their product line since their founding. While they started with basic investment management, they’ve since expanded its product menu to include more specific portfolio types, cash reserves and banking, and even live financial advice.

The company serves more than 650,000 investors, with $32 billion in assets under management.

About Wealthfront

Wealthfront began operations in 2011 and has been a more than worthy competitor of Betterment. As a robo-advisor, Wealthfront also provides automated, online investment management, based on MPT. The company has grown rapidly, and now has over 450,000 investors with more than $26 billion in assets under management.

Like Betterment, Wealthfront has steadily evolved and expanded its product menu. They provide tax-loss harvesting, a cash reserve and banking option, Smart Beta and socially responsible investing portfolios, and they even enable investors to change the investments in their portfolios.

What’s more, Wealthfront offers all its services at no additional cost. The company has a single pricing plan for all portfolio sizes, making the fee calculation simple.

Main Features of Betterment vs. Wealthfront

Plans & Pricing

Betterment offers its Digital plan, with an annual advisory fee of 0.25%. Investors with at least $100,000 have the option to choose the Premium plan. It has an annual advisory fee of 0.40%, but offers unlimited access to financial planners, as well as in-depth advice on investments held outside Betterment.

Wealthfront offers one plan with a 0.25% annual advisory fee on all balance levels. However, the first $5,000 is managed for free through the current promotion.

Available Accounts

Betterment and Wealthfront each offer individual and joint taxable accounts, trust accounts, and traditional, Roth, rollover, and SEP IRAs. The only difference between the two is Wealthfront also offers accounts for 529 college savings plans.

Wealthfront is one of the few robo-advisors offering this plan. Since it’s sponsored through Nevada, residents of the state receive the first $25,000 in the account managed for free.

Wealthfront charges its usual fee of 0.25% to manage the account, plus an additional 0.07% in administrative fees.

RELATED: The Best Retirement Plans and How to Get Started Planning Your Retirement

Tax-loss Harvesting

Both platforms offer tax-loss harvesting for taxable investment accounts (there is no need for the service with retirement accounts, since they’re tax-sheltered). That’s a strategy in which losing investments are sold to generate tax losses to reduce gains (and taxes) on winning investments. (The investments sold are later replaced with a comparable fund to maintain target asset allocations.)

Betterment also offers their Tax-Coordinated Portfolio, which aims to boost after-tax returns by an average of 0.48% per year. The strategy focuses on asset location. For example, investments expected to generate taxes at higher rates are held in tax-sheltered retirement accounts. Assets expected to be taxed at lower rates are held in taxable accounts. It’s generally recommended for investors who are in higher federal tax brackets, though it can benefit anyone with a healthy balance in both taxable and tax-advantaged investment accounts.

Wealthfront also offers stock level tax-loss harvesting, known as U.S. Direct Indexing. You’ll need a minimum account balance of $100,000 to take advantage of this feature. As a robo-advisor, Wealthfront invests your money in ETFs. But with Direct Indexing, you can instead invest in individual stocks. This is considered an enhanced form of tax-loss harvesting because individual stocks offer more flexibility in taking advantage of capital losses.

Asset Classes

As is typical of robo-advisors, both platforms invest your portfolio in broad asset classes, each represented by a single ETF. The asset classes used by each are as follows:


Stocks (6):

• U.S. Total Stock Market
• U.S. Large-Cap Value Stocks
• U.S. Mid-Cap Value Stocks
• U.S. Small-Cap Value Stocks
• International Developed Stocks
• Emerging Market Stocks

Bonds (7):

• Short-Term Treasuries
• U.S. Short-Term Bonds
• Inflation Protected Bonds
• U.S. Municipal Bonds
• U.S. High Quality Bonds
• International Developed Bonds
• Emerging Market Bonds


Stocks (4):

• U.S. Stocks
• Foreign Developed Market Stocks
• Emerging Market Stocks
• Dividend Growth Stocks

Bonds (5):

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

Alternative assets (2):

• Real Estate
• Commodities

Cash Reserve/Banking Features


Betterment Cash Reserve is currently paying 0.10% APY on all account balances. Your account is covered by up to $1 million in FDIC insurance for individual accounts, and $2 million for joint accounts. There are no account fees.

There are also no limits on how often you can move money into and out of the account, and withdrawals are completed in 1 to 2 business days. You can set separate allocations for specific savings goals, like emergency savings or accounts for upcoming spending.

The Cash Reserve also gives you access to both spending analysis and guidance to help you better manage your money.

Betterment also offers its no fee checking, which comes complete with a Visa debit card for daily spending. ATM fees and foreign transaction fees are automatically reimbursed, and the account imposes no overdraft fees. Cash back rewards are available on specific merchant purchases, like Walmart, Sam’s Club, Duncan, Staples, and Adidas.

However, FDIC insurance on Betterment Checking is limited to $250,000 per depositor.


The Wealthfront Cash Account similarly offers FDIC insurance coverage up to $1 million on individual accounts, and is currently paying 0.01% on all account balances. There are no account fees, including transfer and overdraft fees.

The account can be used to pay bills, send money, and deposit checks. You can also instantly transfer funds into your Wealthfront investment account. Funds transferred from the account will arrive in an external bank account in one to three business days. You can also create savings categories, like an emergency fund or the down payment on a car or home.

Wealthfront Cash Account comes with a Visa debit card that can be used fee-free at over 19,000 ATMs.

Portfolio Line of Credit – Wealthfront Only

The Wealthfront Portfolio Line of Credit is automatic with an individual, trust or joint investment account with balances of at least $25,000 (but not retirement accounts). The line of credit enables you to access up to 30% of the balance of your account at any time and for any purpose.

Because you’re borrowing money from yourself, there’s no credit check required, and funds can be available in just one business day. Interest on the line ranges between 2.40% and 3.65% APR, which is far below the rates charged by credit cards or personal loans.

Financial Advice – Betterment Only

Betterment offers regular phone access to financial advisors for its Premium plan clients. The Premium plan requires a minimum investment of $100,000. The financial advisors can provide personal financial advice, relating to both your Betterment account and non-Betterment accounts.

Betterment can also incorporate your employer-sponsored retirement plan into your overall portfolio mix. It can’t manage the plan for you, but it can provide advice on how to better allocate your plan, as well as coordinate the plan with your Betterment investments.

Wealthfront does have financial professionals available, including CFP®s, referred to as Product Specialists. But their function is to provide support and advice only for your Wealthfront account. They don’t provide general advice pertaining to your overall financial situation.

Smart Beta

Both platforms offer a Smart Beta option. Smart Beta is a strategy designed to increase expected returns by weighting the securities in your portfolio more intelligently.

Betterment offers its Goldman Sachs Smart Beta portfolio, which has the goal of outperforming market capitalization portfolios using Goldman Sachs ETFs. The strategy configures costs, value, and diversification in a different way than Betterment’s core portfolio. It overweighs exposure to certain securities, like real estate investment trusts, while also offering tax-loss harvesting.

Wealthfront offers a Smart Beta option on account balances of $500,000 or more. The strategy is available at no additional fee. Wealthfront uses a proprietary investment strategy to determine weighting of stocks in your portfolio that includes value, momentum, dividend yield, market beta, and volatility.

Other Portfolio Options

Betterment offers the following additional portfolio options:

BlackRock Target Income: designed primarily for retirees, this portfolio focuses on income generation and capital preservation by using a diversified 100% bond basket to minimize stock market volatility. It offers four different risk levels, enabling investors to accept higher risk in exchange for higher returns.

Flexible Portfolios: designed for experienced investors, giving them an opportunity to adjust the individual asset class weights in their portfolios.

Wealthfront offers the following additional portfolio options:

Risk Parity Fund: investors with at least $100,000 can choose this option, which offers potentially higher risk-adjusted returns.

Cryptocurrency Trusts: Wealtfront offers two trusts, one based on Bitcoin and the other on Ethereum.

Add/Delete ETFs from your portfolio: Wealthfront allows you to add or delete ETFs from your account. You can also change the risk level and the investment allocations within your investment mix. This option is available on all account types.

RELATED: 7 Best Crypto Exchanges With Low Fees and Top Security

Who Betterment is Best For?

The two robo-advisor giants are closely matched. Not only do they have similar product offerings, but when one rolls out a new one, the other typically follows. But there are some differences that may attract you to one or the other.

You may prefer Betterment if…

  • You don’t have money to open an account. Betterment allows you to open an account with no money at all, then to begin investing as you accumulate funds.

  • You like to invest in value stocks. These are stocks in companies that are considered undervalued compared to their peers. For that reason, they hold the potential to outperform other stocks in the sector. Betterment offers value stocks in three of their six stock asset classes.

  • You like the idea of unlimited access to financial advisors. Of course, you’ll need a minimum of $100,000 to invest under the Premium plan to get this benefit. But if you qualify, it will provide more comprehensive investment management than you will get with most other robo-advisors.

  • Retirees and others looking for a safer income option. Betterment offers their BlackRock Target Income portfolio, investing only in bonds and offering four different risk profiles, depending on your needs.

Who Wealthfront is Best For?

You may prefer Wealthfront if…

  • You like having alternative assets in your portfolio. Wealthfront will include portfolio positions in both real estate and commodities. This option is available with all plan types and all portfolio sizes.

  • You like a simple fee structure. Wealthfront offers across-the-board pricing, at 0.25%, regardless of portfolio size or plan. This is unlike Betterment, which has a 0.40% fee on their Premium plan.

  • Small investors. Wealthfront will waive its advisory fee for the first $5,000 in your portfolio. This will provide a slight advantage to smaller investors by improving net investment returns.

  • Parents and grandparents looking to open a 529 college savings plan for a child or grandchild. Wealthfront is one of the few robo-advisors to offer these tax-advantaged plans to help you save for a child’s college education. This option is not available with Betterment.

  • You like the idea of having access to a low-cost line of credit against your portfolio. With an account balance of at least $25,000, Wealthfront will provide you with a low interest line of credit against your portfolio, enabling you to borrow up to 30% of the value of your account instantly without a credit check.

  • You want to invest in cryptocurrencies on the same platform where you hold your other investments. You can do this using the Cryptocurrency Trusts that invest in Bitcoin and Ethereum, two of the biggest cryptocurrencies in the space.

Summary: Betterment vs Wealthfront

Betterment and Wealthfront are among the best robo-advisors in the industry, and you really can’t go wrong with either. Each offers a wide variety of products and services, so you’ll need to carefully evaluate which comes closest to meeting your own individual investment needs and preferences.

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