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Wealthfront vs. Vanguard
Consider your investing budget and type of financial planner when choosing between these two platforms.
Wealthfront and Vanguard are two investment platforms with competitive fees. Wealthfront is solely a robo-advisor, while Vanguard offers a few financial services. But how much you invest may determine which platform is better for you.
Which one is better?
- Choose Wealthfront if you’re investing between $500 and $3,000.
- Choose Vanguard if you’re investing at least $3,000.
Wealthfront and Vanguard have similar offerings — even down to the account types. They both curate securities with low expense ratios for your portfolio based on research, your risk tolerance and your financial goals.
While Wealthfront has a lower minimum account requirement of $500, it has a higher annual robo-advisor fee — 0.25% to Vanguard’s of 0.15%. Having a higher account balance unlocks a few fancier investment strategies, but you end up paying more in fees. For example, an account with $500 has an annual fee of $1.25, but a $500,000 account, which qualifies for a smarter weighting strategy, costs $1,250 per year.
Vanguard rivals Wealthfront with a low fund fee and a lower advisory fee for its robo-advisor service. But you’ll need a minimum account of $3,000. And unlike Wealthfront, that only supplies financial advice through its software, Vanguard lets you call an adviser and discuss your financial situation if you can afford $50,000 in managed assets. Your advisor implements tax-savings strategies as an added perk.
How do Wealthfront and Vanguard compare?
|Overview||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.||Vanguard is an investor-owned brokerage that specializes in low expense ratio ETFs. Its tiered investment services are best suited to long-term investors with high account balances, as it offers a personal advisor service for investors with at least $50,000 on hand. Investors that purchase its mutual funds and ETFs don’t pay commissions and become part-owners of the company.|
|Minimum deposit to open||$500||$0|
|Tools and research|
|Reputation and customer reviews|
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Wealthfront and Vanguard are two robo-advisors with advisory fees lower than the industry standard. And their low expense ratios may make them attractive options for buy-and-hold investors.
Wealthfront also offers banking services and a diverse suite of investment accounts. It might be a good option if you want a low-fee portfolio with a relatively low account balance.
Vanguard is better suited for investors with higher account balances. Fractional shares make sure all your money is working for you, and a financial advisor can keep you on track with your financial goals.
If you want an investment platform with no account minimum, take a look at a few other options.
Frequently asked questions
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