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Wealthfront is an online financial advisory firm offering investing and financial planning serviceswith a heavy emphasis on asset allocation with low fees. They are considered a robo-advisor with automated investment management and providing holistic financial advice. The entire management program is based on the Modern Portfolio Theory (MPT)
Wealthfront was founded to “democratize access to sophisticated investment products.” By using software to make investing easier for new or experienced investors.
If you’re a beginner investor or an experienced investor looking for: a hands-off approach, lower management fees for small accounts, taxable accounts, automatic rebalancing, and a 529 college savings plan. It is also best for investors who don’t need to speak with an expert. Have accounts with other firms over $100,000? Wealthfront may not be the best option for you as there are cheaper alternatives available.
With their automated investing services, you can have individual and joint non-retirement accounts, Roth, traditional, SEP, and rollover IRAs, trusts, and 529 Plans.
Management Fee: 0.25% annually but the first $10,000 is managed free.
Retirement Planning – Offers tailored advice on how much to save and invest in the right tax-advantaged accounts. Accounts: Traditional IRA, Roth IRA, SEP IRA, 401(k) Rollover
Grow your savings – Invest some of your savings into long-term investment accounts without the restrictions of retirement accounts. Accounts: Individual, Joint, Trust
Plan for home ownership – Get a budget that keeps you on track to afford your dream home factoring in home prices and other ownership expenses.
Pay for college – Start saving money for college today for your children. It starts with tax-advantaged 529 plans designed for college expenses to pay for tuition, room and board, and books.
A line of credit: Emergencies happen but using money in investment funds can impact long-term investing goals. With Wealthfront, customers with at least $100,000 in their account can borrow up to 30% of their portfolios’ value without an application or a credit check and fees. There are interest charges.
Investments: The investment methodology includes giving investors a questionnaire to identify risk tolerance and offering exchange-traded funds. Wealthfront’s process is automated with algorithms that rebalance when dividends are reinvested or money deposited. A typical portfolio includes about eight asset classes but real estate is not included in taxable accounts.
Financial planning: Wealthfront offers a Path tool on mobile and desktop that helps people plan for retirement, a home purchase, college for kids, and investment strategy for your savings goals.
It only takes a few minutes to sign up for Wealthfront. There are three steps to get started. Account minimum is $500.