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BETTERMENT VS WEALTHFRONT 馃搱 Which Platform Is The Best? - YouTube
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hello once again guys I hope you're
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having a fantastic day so in this video
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here we're going to be talking about the
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differences between wealthfront
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and betterment and I'm going to be
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honest with you guys there are not a lot
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of differences they're offering very
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similar services betterment was doing it
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first and then wealthfront came on the
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scene a couple of years later and so if
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you're doing your due diligence here
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you're looking at a Robo advisor and
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trying to decide which one to invest in
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hopefully this video will help you
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understand the differences between the
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two so first of all both of these are
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Robo advisors and Robo advisors are
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these automated investing platforms
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traditionally you would pay a financial
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advisor to look at your financial
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landscape figure out your risk tolerance
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and what assets you should be involved
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in and as a result you're either paying
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them a sales commission through the
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funds you are buying or you are paying
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them a flat fee if they're a fee-only
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financial advisor to tell you what you
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should be investing in and then your
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financial advisor is going to be
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continuing to change your allocations
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and rebalance and as you contribute more
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money they're gonna figure out where
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should I put that money
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now these Robo advisors are able to do
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the exact same thing as these financial
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advisors but because there is no human
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involved in this it's going to be
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significantly less expensive the other
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thing is that financial advisors
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typically only work with clients that
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have a certain amount of money to invest
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otherwise it's just not worth their time
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but with these two companies with
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betterment and wealthfront
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you can be investing with five hundred
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dollars in wealth fronts case or zero
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dollars minimum for betterment so you
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don't have to have a massive amount of
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money to get some guidance on what you
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should be doing with it so these Robo
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advisors are a low-cost alternative to
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the traditional financial advisor and
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the two most popular ones out there are
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betterment and wealthfront
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and I'm going to cover the differences
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between these two accounts for you now
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first of all the main one is that
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wealthfront has a $500 minimum to get
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started and betterment has a zero dollar
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minimum so if you have less than 500
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bucks and you want to get started
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betterment would be your option and if
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you guys are interested in opening an
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account with betterment or wealthfront
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I have links for both of them down in
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the description below they are affiliate
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links you
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do not have to use them but if you do it
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helps support my channel and it helps to
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allow me to make more videos like this
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educating people about investing the
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second difference is a little bit more
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technical but that is the fact that
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wealthfront allows direct indexing while
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betterment only allows you to be holding
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broad market ETFs
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now this is a service that is reserved
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for people with a $100,000 minimum so
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you have to be investing with
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wealthfront and you have to have over a
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hundred thousand dollars in your account
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but then you can take advantage of
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direct indexing and what that means is
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rather than investing in an S&P 500 ETF
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where you're capturing the whole market
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you're investing in all 500 of those
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stocks and holding individual stocks
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themselves and where that comes into
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play is with tax loss harvesting
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betterment offers daily tax loss
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harvesting wealthfront does the same
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thing but if you have over a hundred
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thousand in your account you can do
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direct indexing by those individual
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stocks and then they can sell individual
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stocks to take advantage of capital
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losses and cut down on your tax bill so
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essentially it gives you more
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opportunities to take advantage of small
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capital losses to offset your capital
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gains this is a service offered only by
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wealth front and not betterment so if
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you have a hundred thousand dollars or
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more to invest and you want to take
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advantage of direct indexing then wealth
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front is the way to go the third
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difference is that wealth front offers a
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service called tailored transfer where
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as you can actually transfer your assets
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if they're compatible into your wealth
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front account over time so traditionally
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let's say you have a bunch of individual
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stocks that you're holding you want to
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move that money over to a Robo advisor
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you're going to have to sell all of
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those stocks and then you're going to
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have to move that into cash move it into
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the new account and then have it be
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invested well when you do that you're
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exposing yourself to capital gains and
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maybe you don't necessarily want to sell
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these investments you still want to hold
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them but you just want them to be in
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your new account wealthfront allows you
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to transfer those assets in over time if
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they fit into your portfolio and they
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have to be compatible assets so if you
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have options where you have futures in
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there or you have penny stocks
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those are probably not going to be
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compatible with your wealthfront account
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you're gonna have to move those into
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cash and then move that cash into your
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wealthfront account but if you do have
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individual stocks they will be able to
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transfer those into your wealthfront
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account over time through something
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called taylor transfer and that is a
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feature that only wealthfront has to
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offer
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the fourth difference is that
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wealthfront offers the 529 college
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savings plan so if you are investing for
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college savings that is going to be
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something you can only do with
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wealthfront
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betterment does not support that type of
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account number five is that wealthfront
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offers a portfolio line of credit you
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have to have a hundred thousand dollars
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minimum in that account but once you
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have that you can actually get a line of
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credit and use your investments as
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collateral this is a service that only
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wealthfront has to offer so let's say
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you want to draw a line of credit to
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purchase a home or if you need that
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money for some reason without having to
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sell your investments you can actually
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borrow money and use your investments as
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collateral that is a feature that only
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wealthfront has available at this point
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in time and betterment does not offer
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that line of credit against your account
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and then finally betterment does offer a
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betterment premium it is a 0.4 percent
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annual fee rather than 0.25 and with
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that service you get unlimited access to
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financial planners you can call them up
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anytime and talk to them about your
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investments and so for people who want
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to have that in-person communication
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you're going to want to go with
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betterment other than that they are
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pretty much identical they're both
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offering Robo advisory services
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investing you in ETFs and they both
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charge a zero point two five percent
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annual fee for their services beyond
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that those are the only differences
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between the two accounts and then I
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don't remember if I mentioned this or
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not but betterment premium is for people
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with a hundred thousand dollars in their
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account or more so most of these
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differences are for people who have more
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than a hundred thousand dollars in their
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account if you have less then there's
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really no difference here and as far as
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which one to pick both of them are great
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but if you have more than a hundred
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thousand dollars to invest it may be
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these little things here and there that
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make you decide to go with one over the
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other but these are the only differences
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I found in these two
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but anyways guys thank you so much for
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watching this video if you are
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interested in opening account with
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wealthfront or betterment I have a link
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down in the description for both of them
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like I said they are affiliate links you
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do not have to use them but it certainly
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does help me out help support my channel
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and allows me to make more videos like
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this but thank you guys so much for
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watching I hope you have a great rest of
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your day and I will see you in the next
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video if you are interested in learning
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more about investing in the stock market
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I've created a free course just for you
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the link is in the description below
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here are a few other videos you might
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enjoy as well
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