Wealthfront Review - Is This Robo-Advisor Worth It? - YouTube

Today we're going over Wealthfront, the investment robo-advisor

with low-costs, diversified portfolios, and a suite of excellent financial tools.

But is it the right robo-advisor for you?

For more investing guides, courses and reviews, visit InvestingApps.com

Hey, welcome back, guys.

This is Erik of EverydayInvesting.com, where I'm all about helping everyday

investors take control of their investing and their finances.

So I'd like to say thank you

to Wealthfront for sponsoring today's video, because today

we are going over an investment platform that really offers a lot of different

financial tools and services to everyday investors like you and I.

So for starters,

what is Wealthfront? Well, Wealthfront is actually one of the leading

robo-advisors for investors who want to put their investments on autopilot.

So if you want to take control your

finances, but you want a more more of a hands off approach to investing then

robo-advisors, are automated investing platforms that help you achieve that.

Available on iOS, Android, and desktop; Wealthfront's interface

can really help give you more of an in-depth overall look at your

overall financial picture. And while Wealthfront began its journey

primarily as a low-cost investment platform.

It's actually growing its portfolio

of tools to offer features such as automated financial planning,

high-interest cash accounts and even tax-saving strategies.

So this really makes the robo-advisor suitable for those who are looking

for more than just another investment platform.

Now, one interesting thing about Wealthfront is they actually use something

called Modern Portfolio Theory in designing their portfolios.

And essentially, they first assess your

risk tolerance, your time horizon, and then your investment goals.

They then create a portfolio that suits your investment criteria based

on the brief assessment that you take when you first sign up to the platform.

In simple terms, Modern Portfolio Theory emphasizes portfolio diversification

to help increase returns while also helping minimize losses.

Now, Wealthfront has a wide range

of investment options and strategies, including automatic portfolio rebalancing,

automatic dividend reinvestment and even tax-loss harvesting.

They also provide different financial planning products for retirement planning,

home buying, and even for planning for college education costs.

Of course though,

when it comes down to it, their automated investment portfolios are

still where the robo-advisor excels the most.

So you may be wondering, how does Wealthfront work?

Well, you can get started investing

on Wealthfront with as little as $500.

Your funds are then invested,

automatically invested into a mixture of exchange traded funds or ETFs.

And ETFs are essentially baskets

of related assets bundled together in a single investment.

And Wealthfront ETFs include exposure to various asset groups such as U.S.

stocks, international stocks, bonds, real estate, and even natural resources.

One of the greatest benefits of ETFs is

the instant diversification that they bring to your investment portfolio,

because instead of relying on a few single stocks' performances, your portfolio gets

exposure to hundreds of quality companies across various asset classes.

And this instant diversification,

along with the low cost of ETFs, really allows anyone to become a stock

market investor without having to really even overthink it.

Now, one of the big advantages with using

a robo-advisor is that they provide automatic portfolio rebalancing

and essentially Wealthfront achieves this by rebalancing your portfolio both

automatically and continuously to maintain your proper asset allocation.

So this means that once Wealthfront

determines your ideal asset allocation, if any particular asset becomes overvalued

or undervalued, it's automatic rebalancing feature will ensure your portfolio stays

consistent no matter how much you have invested.

So let's now take a second to talk about

the automated financial planning features on the Wealthfront platform.

So if you have multiple brokerages and bank accounts and keeping track

of everything can definitely become overwhelming, right?

Well, Wealthfront makes this easy

by letting you add external accounts to your Wealthfront dashboard.

So this makes it extremely convenient to track and monitor all of your financial

accounts, including those not managed by Wealthfront itself.

They make it easy to measure and track

your current net worth while also projecting your net worth in the future,

even making adjustments automatically as your finances change.

And this feature really helps give you more accurate insight and more

of a complete overview of your entire financial portfolio.

And as a result, you can better manage

and optimize your finances for any personal goals that you may have.

Speaking of goals,

this is another area where the robo advisor shines. Because after connecting

all your financial accounts to Wealthfront,

the home dashboard displays all of your assets and liabilities at a glance allowing

you to really see where you stand on achieving your goals.

So whether you're more interested in

saving for a house, taking time to travel,

or even saving for college or just expecting a large expense such as a new

car or a wedding, you can easily track all your financial goals in one central

location with Wealthfront's goal planning feature.

Let's now hop into the pricing and fees of Wealthfront.

So Wealthfront's fees are pretty straightforward.

There are no fees to buy or sell any of your investments.

Instead, they charge a fixed annual fee of 0.25% percent.

And this is a pretty competitive rate compared to mutual funds and financial

advisors who can charge anywhere from 1-3% in annual fees.

To put this in practical terms,

a 0.25% annual fee is only $1.04 per

month on a portfolio balance of $5,000.

But thanks to my friends over

at Wealthfront, they've been generous enough to offer viewers

of the Everyday Investing community a special promotion where you can get your

first $5,000 managed completely for free.

So if you would like to try out Wealthfront for yourself after the video,

be sure to claim your promotion down below by using my special partnership link,

which again, I'll put down below in the description box below this video.

You can also access mobile banking

on the platform in the form of a high interest cash account with no monthly

service fees, account fees or account minimum fees.

And with their cash account, you'll earn interest rates much higher

than the national average at your local bank.

Another benefit of Wealthfront cash

account is that you could also get paid up to two days early when you direct deposit

your paycheck, plus because it also comes with its own routing and account number.

You can also use it to pay bills

and easily access cash with the included Visa debit card.

Now, if you would like to learn more about

the Wealthfront cash account after this video.

Be sure to check out my full Wealthfront cash account review linked

down below this video.

You can easily open up a Wealthfront cash account with as little as $1.

And there's also no account minimum fees, like I mentioned earlier.

So this can really make it an ideal option for holding an emergency fund,

because not only does the cash account allow you to earn higher interest on your

uninvested cash, but you can easily transfer money between

your cash account and your investment accounts at any time.

Next up, I want to talk about Wealthfront features and benefits.

So the first one I want to cover is Wealthfront Autopilot.

So, as you know, Wealthfront is all about automation, and Autopilot

is their simple tool for helping you move

towards what they call self-driving money. The integrated feature tracks and monitors

your bank accounts, income, and expenses and automatically

transfers money above your monthly spending requirements straight into your

high-interest cash account or your investment account on Wealthfront.

The next feature we need to cover is their tax-loss harvesting. And tax-loss

harvesting is a strategy that takes advantage of stock market movements

to capture investment losses, which can help reduce your overall tax bill.

You see, this feature is available at no

additional cost for all taxable investment accounts on Wealthfront.

And essentially, capital losses can

help offset capital gains and Wealthfront's algorithms track daily capital loss

opportunities to ensure your portfolio is as tax-efficient as possible.

Another significant feature

with Wealthfront is their portfolio line of credit.

Now Wealthfront makes borrowing simple. Secured by your own investments,

a portfolio line of credit is essentially

a fast and convenient way to access cash at a low rate without having to sell your

investments and disrupt your long term investment goals. Available to investors

with $25,000 or more in a taxable investment account,

Wealthfront's portfolio line of credit allows you to borrow money against your

investment portfolio while also choosing your own terms of repayment.

And while the interest rates are low and you can set your own repayment terms

and your own payment schedule, it's important to keep in mind

that there are always risks to consider when taking out a loan.

For instance, whenever you take out a loan, your investments act as collateral.

So if your portfolio value ever decreases significantly, Wealthfront may have

to sell some of your investments to cover the loan.

So the next question you might be asking is, is investing on Wealthfront safe?

Well, as a member

of the Securities Investor Protection Corporation (SIPC) Wealthfront

investment accounts, are SIPC insured against brokerage failure.

Securities in members accounts are protected up to $500,000, including up to $250,000 in cash.

On the other hand, Wealthfront's separate cash account does

provide FDIC insurance up to one million dollars through their partner banks.

With that being said, guys, let's now hop into the pros and cons of Wealthfront.

The first pro with Wealthfront is

definitely their tax loss harvesting feature.

Wealthfront tax saving strategy definitely takes advantage of capital losses and uses

them in your favor to reduce your overall tax bill.

This is very beneficial

for investors with taxable investment accounts, and it's also a feature that's

just not available on many popular investing apps today.

The next pro is Wealthfront's financial overview.

Being able to connect your external bank and brokerage accounts to Wealthfront

allows you to easily monitor your overall finances all from a single dashboard.

So whether you're setting goals, tracking your net worth, or simply

monitoring your Wealthfront accounts, they make it very convenient to get a more

holistic view of your entire financial portfolio.

And the third pro is definitely

Wealthfront's high-interest cash account, because any time you can earn higher

interest on your uninvested cash than you could at a traditional bank,

that is definitely something to take advantage of.

Not only does the Wealthfront cash account come with no fees,

but it also comes with direct deposit, FDIC insurance through their partner banks,

and even a Visa debit card for quick access to your cash.

Now, what are the cons of Wealthfront?

Well, the first con would have to be limited portfolio customization.

While Wealthfront portfolios are well

built and diversified, you don't have a lot of control over

customizing what you invest in. Because the robo-advisor is built around ETFs,

you don't have the ability to invest in individual stocks until your account

balance reaches $100,000.

The second con is there are no fractional shares.

Wealthfront doesn't invest in fractional

shares of ETFs, and this means that you could have some uninvested cash sitting

on the sideline for some time until you have enough to buy a full share.

This is why it's always recommended to turn on automatic deposits so you can

reduce any time your money is sitting on invested.

Now, I want to briefly jump into who is

Wealthfront ideal for versus who is Wealthfront not as ideal for.

So for starters, I would say Wealthfront is ideal for investors who want a more

passive investing approach and a more passive investing experience.

If you want to grow your money through investing, but you don't want to have

to worry about the day to day price movements of the stock market a robo

advisor could be an ideal solution for you.

You see, Wealthfront's portfolios are low cost,

the app is easy to use, and the investments are completely managed by Wealthfront.

So if you're interested in a more,

"set it and forget it" investing approach, Wealthfront's automated tools like portfolio

rebalancing, dividend reinvestment, and tax loss harvesting make it easy for anyone

to invest without having to feel overwhelmed.

The robo-advisor is also ideal for those who want to access to a suite of growing

financial tools such as mobile banking, a portfolio line of credit, and even tax

saving strategies, as well as automated financial planning software.

Now, who is Wealthfront not as ideal for?

Well, I would say Wealthfront is not as

ideal for more active and hands on investors,

because while their portfolios are well-built and like I said,

cover many asset classes, they may not be a good fit for investors

who want to pick and trade individual stocks.

But even for those more active investors,

the good news is that Wealthfront still offers many helpful tools outside

of investing that you may want to take advantage of. Whether it's their high

interest cash account, or it's their competitive portfolio line of credit,

or simply the ability to monitor and track all your financial accounts from one

dashboard, Wealthfront really offers a little something for everyone.

So as mentioned earlier guys,

my friends over at Wealthfront have been generous enough to offer viewers

of Everyday Investing a special promotion where you can get your first $5,000

managed completely for free on Wealthfront.

So if you'd like to try any of Wealthfront's tools for yourself,

you can claim your special promotion through my exclusive partnership link down

below in the video description box beneath this video.

So let me know down below in the comments

what you think of Wealthfront or if you have any questions. And if you'd like

to see how Wealthfront compares to some of the other top investing apps today

ee sure to check out any of my other investing apps reviews right here.

And of course, if you're new to investing

and you need some help getting started, be sure to grab any of my free investing

guides or courses at InvestingApps.com

as always guys,

thank you for tuning in and I look forward to seeing you all in the next video.