$700 million Wealthfront is the only “robo-advisor” pioneer that is still totally human-free, and it’s doubling down by releasing an automated financial planning feature, called “Path,” which helps you understand when you’ll be able to retire, and how your current spending and saving impacts that.
Robo-advisors were built on the rise of low-cost ETFs, and the theory that the best way for most people to invest is to park their money in an account that broadly mimics the market, and use an algorithm to diversify the portfolio. The idea was to cut out expensive human investment advisors altogether, and thereby charge lower fees.
But as established players have jumped into the market, a “hybrid” system, which mixes humans and algorithms, has come into vogue.
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- $500 Minimum Deposit — Wealthfront requires only $500 to open an account, down from originally $5,000.
- First $10,000 Free — The first $10,000 you invest has no annual fees. After this, Wealthfront costs 0.25% annually. Wealthfront does have a special promotion with Investor Junkie that gives you $15,000 under management for free.
- Direct Indexing — Individually own 100 stocks of the largest US companies and two smaller-sized company ETFs to represent the broad US stock market. This is for over $100,000 in a taxable account. This further reduces your annual fees with Wealthfront and possible taxes.
- REIT and Natural Resource ETFs — Their asset allocation includes a REIT and a natural resources ETF for greater diversification.
- Single-Stock Diversification Service — A rebalancing option for primarily tech startup employees with ownership in one large stock.
- 529 College Savings Plan (New) — Free for the first $10k. Nevada residents get $25k for free. After these amounts, all-in fees are 0.43%–0.46% per year.
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