Betterment vs. Wealthfront: Which Is Better for You?

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It can help to have a service that guides your portfolio choices when investing. Betterment and Wealthfront are two popular investing advisement services — but which is better?

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Here’s what you need to know about Betterment vs. Wealthfront to invest.

Betterment vs. Wealthfront: Advanced Features

When it comes to features, both Betterment and Wealthfront are impressive. But each service has a few differences in what they offer.

Wealthfront is exclusively digital, while Betterment has both all-digital and digital plus human advisor investing options.

For digital investing services, Betterment and Wealthfront both charge a 0.25% annual management fee on the amount you invest. However, Betterment’s higher-tier Premium service with digital investing plus unlimited over-the-phone access with its team of certified financial planners incurs a management fee of 0.40% per year. A minimum account balance of $100,000 is required to enroll in this option.

Here are the notable features of both services. 


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Betterment vs. Wealthfront: How To Get Started

Both Wealthfront and Betterment offer a diversified ETFs portfolio with different asset classes. Getting started on both platforms is quite simple and takes under five minutes.

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Wealthfront asks you a few questions about your risk tolerance and how long you want the investment plan to be. The service shows you the exact portfolio before funding your account. Wealthfront also lets users add or remove certain ETFs from their accounts. Moreover, investors can choose different themes, like socially responsible investing and technology.

Likewise, if investors don’t want to put their money in certain companies, they can create a restricted list to ensure those stocks don’t end up in their portfolio.

Meanwhile, Betterment uses the Modern Portfolio Theory to provide nine types of portfolios. Your options include:

General Investing

Socially Responsible Investing

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All Cash or All Bond

Other Investing Options

Flexible Portfolio: Users can weigh this portfolio based on their preferences, although it’s constructed using the asset classes of a standard portfolio. 

It’s easy to get started — you just need to create an account by entering your email and choosing a password. After that, the website asks you for your legal first and last name. You also have to enter your phone number since Betterment uses it for two-factor authentication. 

Betterment vs. Wealthfront: Tax Strategy

Betterment offers the following tax strategies: 

Meanwhile, Wealthfront offers the following tax strategies: 

Which One Is Better: Wealthfront or Betterment? 

Betterment is an ideal option for users with a low balance, who want to invest for retirement, who intend to remain hands-off or who need automatic rebalancing. If you want to use goal-oriented tools, Betterment works for you. Meanwhile, Wealthfront is more customizable, suitable for taxable accounts and helps college students manage their savings plans for the long run.

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Cynthia Measom and Amber Barkley contributed to the reporting for this article.

Information is accurate as of Sept. 23, 2022.