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Wealthfront vs. Acorns
The ideal robo-advisor depends on the size of your portfolio.
Both of these robo-advisors have an impressive suite of account options and similar features. Ultimately, the choice hinges on how much you plan to invest and what type of account you want.
Which one is better?
Choose Wealthfront if you have less than $5,000 in your portfolio.
Choose Acorns if you have more than $5,000 in your portfolio.
Both Wealthfront and Acorns are well-equipped to serve passive investors with an extensive range of account options and educational blogs to help investors expand their knowledge. The biggest difference between these platforms is their fee structures: Wealthfront charges a percentage-based fee, while Acorns charges a flat monthly rate.
The fee structures for both of these platforms play a pivotal role in how far your money can go. The choice boils down to the size of your portfolio. For investors with less than $5,000 on hand, Wealthfront is the more competitive option. And for investors with portfolios of $5,000 and up, Acorns rates are ideal.
If you have $1,000 in your portfolio and open a Wealthfront account, its 0.25% annual fee means you’ll pay $2.50 in annual fees. Take that same $1,000 portfolio to Acorns, and its $1-monthly fee becomes a $12 annual fee.
Wealthfront’s percentage-based fee scales based on how much you have to invest. No matter how big or small your portfolio, you’ll pay 0.25% in annual fees. The same goes for Acorns: its flat rate remains the same no matter the size of your portfolio.
Acorns’ flat rate becomes advantageous for investors with larger portfolios, and the tipping point sits close to the $5,000 mark. Investors with less than $5,000 save more in management fees by signing up with Wealthfront. But if you have more than $5,000 to invest, Acorns is more competitive.
How do Wealthfront and Acorns compare?
A breakdown of features, fees, feedback and more for these two platforms:
Wealthfront is an investment firm that removes the guesswork from investing. It helps you build a financial plan and reach your goals with the help of automated investments.
Acorns is a robo-advisor that offers individual investment accounts, retirement accounts, custodial accounts — even a checking account that comes with a free Visa debit card. It’s best suited to buy-and-hold investors who want their money managed for them.
Annual fee
0.25%
$1/month
Minimum deposit to open
$500
$0
Benefits
Automatic deposits. Investors can set up weekly, biweekly, monthly or quarterly automatic deposits.
Risk parity. Software aims to minimize investment risk by diversifying its investor funds across multiple asset classes.
Portfolio line of credit. Investors with at least $100,000 in their portfolio who don’t hold a tax-advantaged retirement account gain automatic access to a line of credit that allows them to borrow up to 30% of their account value with rates from 4.05% to 5.3%.
Path investment plan. Analyze your financial habits to devise a long-term retirement investment plan.
Round-up feature. Automate your savings goals by rounding purchases up to the nearest dollar and investing the difference.
Fractional investing. Buy a portion of a stock to make the most of every dollar.
Both Wealthfront and Acorns are equipped to help passive investors allocate and diversify their assets. With so many features in common, the biggest factor is the size of your portfolio.
Acorns allocates investor funds across a mix of stocks, bonds and ETFs.
Yes, investors can set up recurring investments on a daily, weekly or monthly basis.
Wealthfront investors can withdraw $250 or more as often as they’d like as long as their account balance stays above $500.
Yes, new investors must select the transfer option during signup to move assets to Wealthfront. Existing investors simply follow the steps after clicking Transfer/rollover on their account dashboard.
Shannon Terrell is a writer for Finder who studied communications and English literature at the University of Toronto. On any given day, you can find her researching everything from equine financing and business loans to student debt refinancing and how to start a trust. She loves hot coffee, the smell of fresh books and discovering new ways to save her pennies.
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