Reviewed by
Stang Gappa
Reviewed by
Stang Gappa
Updated on May 29, 2024
Learn about our Editorial Process
Betterment offers an automated IRA as the largest independent online financial advisor, and pioneered "set-it-and-forget-it" portfolios for a low-fee.
Wealthfront offers an automated IRA with low-fees and a user interface that's simple and easy to use.
Betterment was one of the first companies to provide fully managed accounts for a low-fee, launching its extremely popular service in 2008. It’s commonly referred to as a “roboadvisor”, and it pioneered the category along with several other players like Wealthfront. Betterment has grown rapidly over the years and now manages almost $30 billion of investment assets.
Despite its growth and a broadening range of services, Betterment has retained its customer-first philosophy. At its core, Betterment offers an easy-to-use service that manages your money for you. This is often referred to as a “set-it-and-forget-it” portfolio and it’s best for those who don’t want to be actively picking investments in their retirement account.
Wealthfront is a great choice for investors looking for a robo-advisor account that allows them to set it and forget it. This is an automated investment platform with low fees. Since Wealthfront does not offer access to a human advisor, it’s ideal for people who are comfortable with software driving their retirement savings, or who are working with a financial advisor on their own to tackle their financial planning needs.
Wealthfront’s user-friendly website offers investors access to great planning tools that are helpful for both experienced and novice investors. Because these tools are integrated directly into the website’s user interface, they’re easier to access than similar tools offered by other brokers. Plus, Wealthfront features include automatic rebalancing and daily tax-loss harvesting to help you get the most bang for your buck, whether you invest in its low-cost index funds and mutual funds or buy fractional shares of individual stocks.
Wealthfront stands out from other robo-advisors thanks to its expert-curated investment options. When you set up your Wealthfront account, you’ll answer a series of questions about your financial situation, goals, and preferences. This is known as a risk tolerance questionnaire. It’s a common starting point when creating an investment portfolio.
Based on your answers, Wealthfront will calculate your risk score and create a portfolio for you. The money in your automated investing account will be allocated across a combination of asset classes like equities (stocks), fixed income (bonds), and international investments. Like other roboadvisors, Wealthfront tends to invest your money in exchange-traded funds (ETFs) and low-cost index funds that allow you to get easy access to a diversified mix of investments in these asset classes.
Wealthfront also separates out its investment options into categories based on your goals and preferences. For instance, you can choose to invest in ETFs focused on technological innovation or put your money into cryptocurrency trusts, or you can opt for socially responsible portfolio options that align with your values. While the funds themselves are pre-arranged (and therefore pre-diversified), you have a lot of say when it comes to where your money is going.
Betterment offers one of the best digitally managed IRAs in the market today. Their commitment to doing right by the customer and providing simple-to-use products make it a very good choice for people looking to have their retirement account handled for a low-fee.
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Wealthfront offers one of the best robo-advised IRAs on the market, with a wealth of different asset classes and sectors available to investors. Plus, it has additional offerings, including a college savings plan and an interest cash account that works like a checking account, that allow you to save and invest for a number of goals.
Wealthfront is a good choice for “set-it-and-forget-it” investors who want to keep all their financial accounts in one place. Just remember: Wealthfront advisers are not easily available for those looking for real, live, human interaction.
