Wealthfront vs. Vanguard | Vanguard Personal Advisor or Wealthfront Robo Advisor?
Investing or proper management of your personal finances may be a priority for you at this point, whether you are looking to invest for your children’s college education or make investments toward retirement.
Learning about the different types of robo-advisors can help you make the best decisions in regards to your money and investments.
There are plenty of portfolio management software options out there, all with varying degrees of human interaction, and all focused on helping you invest and grow your wealth.
When it comes to debating between fully automated portfolio management software and personal interaction, two of the biggest players in the investment industry are Wealthfront and Vanguard.
While both occupy similar spaces within the investment industry, they offer two very different sets of services, with Wealthfront as a fully automated service and Vanguard as a personal advisory service.
Making the decision to be your own Vanguard personal investor by forgoing Vanguard Personal Advisor services can be cost effective, since you will not need a middleman to make investments for you.
The same is true when considering Wealthfront’s automated portfolio management software — without an advisor on the other end, investing costs drop down significantly.
Even if both of these portfolio management software options sound appealing, you may be asking yourself, “Who are these companies? Why should I trust them with my hard earned money?”
In this brief overview, you will learn the key differences between Wealthfront vs. Vanguard.
Our Vanguard vs. Wealthfront comparison is meant to provide you with enough information to help you make the best decision for your unique investment management software needs.
Comparison Review List
The list below is sorted alphabetically (click any of the names below to go directly to the detailed review section):
High Level Comparison Table
Vanguard vs. Wealthfront | Fee Structure | Minimum to Open |
| Vanguard | $2-$25 per trade 0.30% annually | Share price for investing $50,000 for advisement |
| Wealthfront | 0.25% for assets over 10,000 | $500 |
Table: The above list is sorted alphabetically
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Wealthfront vs. Vanguard | Wealthfront Review
Wealthfront helps you create a diversified portfolio and uses your risk score and your new account’s tax status to develop an asset allocation customized for you.
The newer of the two companies, founded in 2011, Wealthfront’s robo investing software monitors investments and manages funds around-the-clock.
For new investors, this is the perfect solution — this allows investors to skip the middleman and rely on affordable, reliable software programming for robo investing.
Before diving into our Wealthfront vs. Vanguard comparison, we will give a comprehensive Wealthfront review of the core features that we deemed particularly compelling when comparing Vanguard vs. Wealthfront, listed below.
Wealthfront Review: Expert Experience
With a team consisting of PhD advisors, CFAs, data scientists, designers, and software engineers led by Charles Ellis and Burton Malkiel, Wealthfront is one of the most popular robo investing platforms with a notably user-friendly interface.
Malkiel serves as Chief Investment Officer and is the author of A Random Walk Down Wall Street and The Elements of Investing.
Ellis serves as an advisor and is the former Chairman of the CFA Institute. He is the author of 16 books, including co-author of The Elements of Investing with Malkiel.
When comparing Wealthfront vs. Vanguard, this is a particularly important aspect — Wealthfront has financial investment leaders at their helm, which certainly shines through in their automated investment management software.
Wealthfront Review: How Does Wealthfront Work?
To get a better value from this review of Vanguard vs Wealthfront, you need to know how each one of these robo-advisors works.
The Process
You can open an account with Wealthfront if you are a U.S. citizen, age 18 or older. The site will allow you to open multiple accounts so you can simultaneously save for retirement and your child’s college expenses.
When you open an account with Wealthfront, a risk score is created through Wealthfront’s software program calculator. The robo advisor software then develops a customized portfolio for you that aligns with your personal goals and risk preferences.
From that point onward, Wealthfront’s automate investing software takes over. The investment management software will automatically rebalance and manage your portfolio, making investing into a hassle-free process.
With the highly individualized plans and constant monitoring and rebalancing of funds, Wealthfront’s automated investment management software will show you exactly where your money is going and how your investments are performing.
Wealthfront Review: Accessibility
When comparing Wealthfront vs. Vanguard, it’s important to look at how accessible Wealthfront investments are.
In fact, a great benefit of using Wealthfront’s automated investment management is that users have complete access to their investment accounts at any time.
With greater accessibility, investors can:
- Review & make account changes at any time
- Avoid scheduling phone calls or making appointments with an advisor
- Link directly to outside accounts via Wealthfront
- Stay focused on long-term investment goals
Wealthfront Review: Mobile & Desktop App
By using the Wealthfront app on both desktop and mobile devices, you have a snapshot of the Wealthfront performance at your fingertips 24 hours a day, seven day a week.
The Wealthfront app is available on iTunes and Android, so you know where your investments stand from any device, tablet, or phone.
Wealthfront Review: Accounts
The following are non-retirement and retirement accounts you can open with Wealthfront:
- Individual accounts
- Joint accounts
- Trust accounts
- Traditional, Roth, and SEP IRAs
- 401(k) rollovers
- 529 College Savings Plan
A diversified portfolio may include U.S. and foreign stocks, emerging markets, dividend stocks, municipal bonds, and natural resources.
Offering fully automated investment management and financial planning across 8 different account types, Wealthfront boasts being the future of investing.
Wealthfront Review: Fees
The fees vary between Wealthfront vs. Vanguard, with Wealthfront commonly attributed as the more affordable of the two.
Wealthfront charges an annual advisory fee of 0.25 percent on all accounts, regardless of size.
Wealthfront does offer a discount on the advisory fee when you refer a friend. If your friend creates an account with Wealthfront, the company will waive fees on $5,000 for both you and your friend.
To open an account with Wealthfront, an account minimum of $500 is required. This minimum amount gives you access to the portfolio of low-cost index funds, according to the company.
You also receive Wealthfront’s daily tax-loss harvesting service to offset taxes. If you want access to the company’s Tax-Optimized Direct Indexing Service, then you will need to provide a minimum of $100,000.
Wealthfront Review: Advantages to Wealthfront
Taking a look at the Vanguard vs. Wealthfront comparison, Wealthfront offers several advantages:
- The robo-advisor is easy to use and device-responsive.
- The company relies on nationally recognized experts for advice, design, analysis, and engineering.
- You have control of your portfolio at your fingertips 24/7.
- Low advisory fees make investing affordable and accessible.
- You can qualify for a refer-a-friend discount.
Wealthfront also offers a tax-loss harvesting service, and is the only automated investment service to offer Direct Indexing. For investors that meet the minimum balance requirements of over $100,000, this is certainly a valuable feature.
Wealthfront vs. Vanguard: Ratings
Wealthfront is not BBB-accredited, though it carries a rating of A-.
This simply means the BBB does not have enough information to give the newer company a rating. It is not due to complaints or Wealthfront returns, products, or services.
In fact, there is only one Wealthfront review listed on the Better Business Bureau, and although it isn’t exactly positive, the absence of official complaints seems to point to an overall satisfaction with the investment management software.
Vanguard vs. Wealthfront | Vanguard Personal Investor Review
Although not a fully automated service, one of the largest Wealthfront competitors is Vanguard.
Vanguard has been around since 1975, and the company name means “in the forefront,” which is fitting as the company moves into digital investing.
With $4 trillion in global assets, the company continues to grow. Currently, there are more than 20 million investors across the globe, and the company employs approximately 15,000 people, including Vanguard financial advisors.
In the U.S. alone, you can find offices in Pennsylvania, North Carolina, Arizona, and Washington, D.C. The company bases its endeavors on its stability, reliability, and expertise.
Our Vanguard review found that the ability to get personalized advice from a human advisor is one of the biggest draws to becoming a Vanguard personal investor.
As a Vanguard personal investor, you can easily get advice and make changes to your portfolio to improve performance.
Vanguard Review: How Does Vanguard Work?
To get a better value from this review of Vanguard vs. Wealthfront, you need to know how each one of these robo-advisors works.
The Process
Vanguard is the only client-owned investing company and provides you with a personal Vanguard advisor. Since the company does not have any stockholders, the funds are priced at cost, which equates to higher returns for you.
The company reports that “the average expense ratio for Vanguard mutual funds and ETFs (exchange-traded funds) is 82 percent less than the industry average.”
Image Source: Wealthfront vs. Vanguard
When you open a Vanguard account, you decide the type of plan you need. Are you saving for retirement? Your child’s college expenses? Do you need to rollover a 401(k) or open an IRA?
Our Vanguard review found that the online application process takes about 5-10 minutes. To complete the application, you’ll need access to your banking information as well as employer information, as required by law.
Once you’ve chosen the appropriate fund and investments, you can add money to get started. You can customize your Vanguard investments or allow Vanguard’s software to do it for you.
You can move funds from your bank account to your Vanguard account quickly and easily, and you may be asked to add a beneficiary to the account.
Vanguard Review: Accessibility
The Vanguard app is similar to the Wealthfront app in that both allow you to make transactions and gain access to your account from any mobile device.
When comparing Vanguard vs. Wealthfront, our Vanguard review found that the mobile app allows investors to:
- View balances, performance, prices, returns, transactions history, & cost basis
- Buy, sell, or exchange
- Mobile check investment
- Research funds, ETFs, stocks, and get the latest financial news
You can use the mobile check service on an existing Vanguard account and not for funding a new account.
The mobile check investment service allows you to endorse and send the check using your cell phone’s camera electronically. Our Vanguard review found that investors can send funds by electronic check for:
- Individual accounts
- Traditional IRAs
- Roth IRAs
- Rollover IRAs
- Joint accounts
- UGMA and UTMA accounts
- Trust accounts
Related: Betterment Review – Returns, Fees, and All You Need to Know
Vanguard Review: Accounts
As a Vanguard personal investor, the Vanguard Personal Advisor services can help you manage your investments with an array of non-retirement and retirement investment accounts. These include:
- Roth & Traditional IRAs
- SEPs, SIMPLEs, & i401(k)s
- Deferred Annuities
- 529 College Savings Plans
- UGMA & UTMA accounts for minors
- Individual & Joint accounts
If you choose to open a Vanguard 529 Plan or a state specific plan, you will need to see what tax breaks you are eligible to receive. The tax breaks may offset your costs.
Vanguard also offers mutual funds, ETFs, stocks, bonds, and CDs. Once you open an account, you can make automatic withdrawals and investments as well as contact your personal Vanguard advisor to answer questions and create a financial plan.
As a Vanguard personal investor, utilizing the help of Vanguard Personal Advisor services can improve your savings for retirement or college, building an emergency fund, or preparing for a life event, like the addition of a new baby.
Vanguard Review: Fees
When it comes to fees, how does Vanguard stack up with comparing Vanguard vs. Wealthfront?
First and foremost, our Vanguard review found that the investment platform does not charge commission fees to buy or sell their mutual funds or ETFs.
Still, there are a few specific fees associated with Vanguard investment services, with a sampling included below:
Our Vanguard review found that the fee will be $20 per year unless you are registered for the website and receive documents electronically.
The fee is also waived if you are considered a Voyager, Voyager Select, Flagship, or Flagship Select Services client with Vanguard. As an additional note, most of these mutual funds require a minimum of $3,000 investment.
Vanguard 529 College Savings Plan
You can expect to pay 0.19 percent for an age-based portfolio or between 0.19 percent and 0.49 percent for an individual portfolio. If your balance dips below $3,000, there will be an additional $20 annual fee.
Vanguard Financial Advisor
The personal service you receive from a Vanguard professional will be assessed a 0.30 percent fee.
According to Vanguard, this Vanguard advisor service is less than one-third of the industry average.
Popular Article: Betterment vs. Wealthfront vs. Vanguard – Ranking & Review
Vanguard Review: Advantages
Let’s take a look at the advantages and disadvantages of opening accounts at Vanguard vs Wealthfront.
Vanguard is unique in that it is the only client-owned investing company, so its members take home more at the end of the day.
When comparing Vanguard vs. Wealthfront, the company boasts a few other key features:
- The company is well-known for decades of stability and reliability in the industry.
- When you create an account, you are provided with a Vanguard financial advisor.
- The Vanguard app accepts checks submitted with your cell phone for free to fund a Vanguard investment.
- You can open UGMA and UTMA accounts for minors as a custodian.
- Vanguard offers lower costs on average.
As with all investment companies, there are a few drawbacks to using Vanguard, including not being able to do all of your transactions 100 percent online without input from a Vanguard financial advisor.
That said, if you choose not to enroll in Vanguard Personal Advisor Services, there are plenty of tools and features that keep Vanguard as a competitive investing service, even if it is not automated.
Features like automatic investing, electronic banking, mobile access, and investing tools are all great ways to manage your investments without enlisting the help of an actual advisor.
Vanguard Review: Ratings
Vanguard is not accredited by the Better Business Bureau (BBB); however, their rating is an A.
In the last three years, Vanguard has received 77 complaints that are now closed, with 68 of those being about problems with a product or service.
The rating is an A due to the ratio of the number of complaints and the size of the investing company and the length of time Vanguard has been operating.
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Conclusion: Choosing between Wealthfront vs. Vanguard
Choosing between Wealthfront vs. Vanguard will be a personal choice, dependent primarily on whether or not you need a Vanguard financial advisor to help you make investments.
Both companies offer unique services that may fit your financial planning needs. Research Wealthfront vs. Vanguard online, and compare the two investing companies with competing portfolio management software.
You’ll find that there are plenty of robo advisors for automated, robo investing (like Wealthfront), and plenty of investment management software options that provide personal advisory services (like Vanguard Personal Advisor services).
No matter which type of portfolio management software you choose, the most important step is to take a close look at your investment goals to find the best tools for your unique financial situation.
Read More: Wealthfront vs FutureAdvisor – Rankings & Review
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