- Matter: Betterment vs Wealthfront Fees
- Reviewed by: Janet Berry-Johnson, CPA
- Revealed on: October 25, 2016
- Final modified: October 25, 2016
- Betterment Supplies as much as 6 months of service free in case you enroll right here.
- Make sure to try our Betterment Evaluation for extra data
Because of Robo-advisors, buyers don’t must have giant portfolios or rent a financial advisor to obtain the very best returns potential. Expertise permits them to cost a fraction of what conventional managers cost, but nonetheless, present customized recommendations and portfolio administration beforehand reserved just for the rich. But even Robo advisors come at a value and the charges differ by platform. Right here’s a comparability of the charges charged by Betterment vs. Wealthfront.
Betterment by no means expenses commerce charges for getting or promoting securities or depositing or withdrawing out of your account.
Administration charges are primarily based on the account balance. Account balances of $1 to $9,999 pay a fee of 0.35%, so long as the investor implements a $100 per 30 day automated deposit. Without the automated deposit, Betterment expenses are $3 per 30 days.
Accounts with a balance of $10Okay to $99,000 are charged a 0.25% fee. Accounts with balances of $100Okay and up are charged 0.15%. No recurring deposit is required for account balances of $10Okay and up.
Betterment has no account minimums and buyers are by no means charged a low-balance fee, aside from the $3 per 30 days fee for having an account balance underneath $10Okay without the $100 per 30 days automated deposit.
Like Betterment, Wealthfront by no means expenses charges for getting or promoting securities or transaction charges for deposits or withdrawals.
The place Wealthfront excels is with account balances underneath $10Okay, as these are managed without cost. For account balances above $10Okay, Wealthfront expenses a 0.25% annual advisor fee. Nevertheless, in case you invite family and friends to open an account, for everyone that indicators up, Wealthfront will waive charges on an extra $5,000 of belongings.
Wealthfront does require a minimum balance of $500 to open an account.
The Underside Line
Each Betterment and Wealthfront provide portfolios of low-cost ETFs, which have charges embedded in their prices. It’s essential to know that irrespective of which Robo-advisor you select, ETFs have their very own inherent charges.
One other benefit loved by shoppers of each Wealthfront and Betterment is that charges are charged per consumer, not per account. So in case you have a $50,000 taxable account plus a $60,000 IRA with Betterment, you’ll fall into the 0.15% tier.
As a result of Wealthfront waiving administration charges on the primary $10,000 of belongings, they could be a greater possibility for buyers beginning out with none present belongings to roll in. For buyers who can transfer belongings to get their account balance over $100,000, Betterment presents a decreased annual advisor fee.