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Wealthfront vs. Betterment: Which Broker Is Right for You?

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Ben Gran
By: Ben Gran
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Ben Gran

Ben Gran is a freelance writer based in Des Moines, Iowa. He has written for regional banks, fintechs, and major financial services companies. Ben is a graduate of Rice University.

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If you're thinking about opening a new brokerage account, considering Wealthfront vs. Betterment should be top of mind. Both of these robo-advisors give you easy, low-cost ways to invest in stocks and other financial assets.

Here's a high-level overview of the Wealthfront vs. Betterment matchup, with details on how each brokerage platform could be a good fit for your investment goals.

Wealthfront vs. Betterment: At a glance

Offer


Rating
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Commissions $0 per trade, management fee 0.25%

 $0 per trade, management fee of $4 per month or 0.25% per year
Account Minimum $500 $0
Next Steps
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Wealthfront vs. Betterment: Commissions & fees

Wealthfront and Betterment are both on The Ascent's list of best robo-advisors. Both platforms offer low-cost automated investing, with no commissions or trading fees.

Betterment requires its customers to pay a management fee of $4 per month (or 0.25% per year), and serves as an automatic financial advisor that helps manage your money. Betterment makes it easy for you to invest your money in diversified, low-cost portfolios of exchange traded funds (ETFs) that are built by investment experts.

This investment approach makes Betterment a great choice for hands-off investors who don't want to pick stocks. Betterment also provides automatic rebalancing of your ETF portfolios based on your investment goals and time horizon. As a Betterment customer, you can "set it and forget it" with your investments -- let Betterment's platform and the power of the global economy do the work for you.

Wealthfront's automated investing account charges a 0.25% annual management fee, similar to Betterment, and gives you automatic investing with personalized portfolios based on your risk tolerance, time horizon, and investing goals. And if you use Wealthfront's stock investing account to choose your own stocks and build your own portfolio, you won't pay any commissions or trading fees.

If you prefer to be more "hands on" in building your portfolio, choosing investments, and making trades, Wealthfront could be a better choice than Betterment. But both of these robo-advisors offer advanced features for automatic, personalized, low-cost investing, with just a 0.25% annual fee (or $4 per month for some Betterment customers).

READ MORE: Best ETF Brokers

Wealthfront Betterment
Stock & ETF commissions $0 $0
Options commissions N/A N/A
Crypto commissions Crypto trusts charge expense ratios of 0.12%-2.5% 1% annual fee plus 0.15% per trade
Mutual fund commissions N/A N/A
Account transfer fee $0 $75
Account maintenance fee $0 $0
Data source: Wealthfront and Betterment.

Wealthfront vs. Betterment: Investments available

Wealthfront and Betterment both offer low-cost, automated investing with personalized portfolios built by experts. But there are a few big differences in how you can invest.

Wealthfront offers 239 investment categories across 17 asset classes, including stock and bond ETFs, U.S. and global stock ETFs, and emerging market ETFs. You can choose to invest in specific portfolios, such as socially responsible ETFs, commodity ETFs (like energy, precious metals and lithium), or sector ETFs (like healthcare and real estate). Wealthfront also offers two cryptocurrency trusts.

In addition to Wealthfront's robo-advisor portfolios, you can buy individual stocks and fractional shares on Wealthfront. You also can choose to customize your Wealthfront portfolio with your own personal touches, even if you want to start by using the recommended portfolios from the Wealthfront platform.

These features make Wealthfront a better fit if you want a more "hands on" approach to investing. Betterment is a better fit if you want to do passive investing in diversified exchange traded funds, while letting the robo-advisor do most (or all) of the work.

Betterment customers are not allowed to buy individual stocks, bonds, or funds on its platform. If you want to use Betterment, you must "buy in" to the idea of Betterment's expert-built diversified ETF portfolios, and be comfortable letting Betterment do the work.

LEARN MORE: Best Options Trading Platforms

Wealthfront Betterment
Stocks and ETFs Yes Yes (not individual stocks)
Fractional shares Yes No
Options No No
Mutual funds No No
CDs No No
Bonds Yes (not individual bonds) Yes (not individual bonds)
Futures No No
Crypto Yes Yes
Currencies No No
Data source: Wealthfront and Betterment.

Alternatives to Consider

We recommend comparing brokerage options to ensure the account you're selecting is the best fit for you. To make your search easier, here's a short list of our best trading platforms of 2024.

Account Fees Account Minimum
Logo for SoFi Active Investing
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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$0 for stocks, $0 for options contracts $0
Open Account for SoFi Active Investing
Logo for Robinhood
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4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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$0 for stocks, ETFs, and options; $5 monthly for Robinhood Gold $0
Open Account for Robinhood
Logo for E*TRADE
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Commission-free; other fees apply $0
Open Account for E*TRADE

Wealthfront vs. Betterment: Account types available

Wealthfront offers a few types of investment accounts:

  • Automated investing accounts (taxable, 0.25% management fee, automated personalized portfolios)
  • Stock investing accounts (taxable, zero-commission trading for hands-on investors who want to buy individual stocks and fractional shares)
  • Automated bond portfolios (taxable, short-term investment account that can offer higher yields than a savings account)
  • Traditional IRAs
  • Roth IRAs
  • SEP IRAs
  • Rollover IRAs
  • 529 college savings accounts

Wealthfront and its bank partners also offer powerful FDIC-insured banking features through the high-yield Wealthfront Cash Account. The Wealthfront Cash Account is paying 5.00% APY currently, and offers debit card access and online bill pay with unlimited transfers.

Like Wealthfront, Betterment is also more than "just" a brokerage, with a few other banking accounts in addition to the usual investment accounts. If you wanted to move most of your everyday banking activities to Betterment, you probably could.

Betterment offers several investment accounts:

  • Betterment taxable brokerage account
  • Traditional IRAs
  • Roth IRAs
  • SEP IRAs
  • Rollover IRAs
  • Crypto accounts
  • Trust accounts

Other accounts you can get from Betterment's bank partners include:

  • Betterment Cash Reserve (5.00% APY)
  • Betterment Checking
  • Betterment Visa Debit Card (with cash back rewards)

LEARN MORE: Best IRA Accounts

Wealthfront Betterment
Taxable brokerage Yes Yes
Joint tenant Yes Yes
Margin Yes No
Robo-advisor Yes Yes
Traditional IRA Yes Yes
Roth IRA Yes Yes
SEP IRA Yes Yes
Custodial No No
Checking Yes -- debit card and online bill pay Yes
Savings Yes Yes
Credit card No No
Data sources: Wealthfront and Betterment.

Wealthfront vs. Betterment: Mobile app and trading platforms

The Wealthfront robo-advisor platform is available for desktop or mobile, and gets high ratings on the App Store (4.8 stars) and Google Play (4.8 stars).

The biggest way that Wealthfront's platform stands out from other brokerages (and from Betterment) is that Wealthfront offers a special account called the Wealthfront Automated Bond Portfolio, where you can put money that you might need in the next one to three years, and potentially earn higher yield than you could get from even the best savings accounts.

Betterment's robo-advisor platform is also easy to access online via desktop or mobile app; the Betterment app gets almost-as-high ratings on the App Store (4.7 stars) and Google Play (4.6 stars).

The biggest difference between Betterment and some other robo-advisors is that Betterment offers help from real human financial advisors. If you sign up for Betterment Premium (which requires an annual fee and minimum assets) or pay for a one-time package of services, you can meet with a Certified Financial Planner™. Wealthfront does not offer access to financial advisors.

Final take

Wealthfront is a better fit for people who want a wider range of investment options and some "hands-on" investing, such as buying individual stocks. The Wealthfront Automated Bond Portfolio account is an intriguing way to earn yield on short-to-medium term savings that aren't a good fit for investing in CDs or stocks.

Betterment is a better choice for simple, automatic investing, and if you like Betterment's assortment of expert-built ETFs. Betterment can also serve as your home base for everyday banking, with its high-yield Betterment Cash Reserve account and checking account with a rewards debit card.

Don't choose these robo-advisors if you want to be a day trader. But if you want to save for retirement and build wealth for short-term or medium-term goals, Betterment and Wealthfront are both excellent choices for online brokerages.