Is Wealthfront at risk?
Wealthfront Cash accounts protected by $8 million of FDIC insurance through its member banks (and up to $16 million FDIC insurance for joint accounts)7.
Yes, the Wealthfront Cash Account is FDIC insured up to $8 million for individual cash accounts and $16 million for joint cash accounts through partner banks. Deposits to your Wealthfront Cash Account are covered through the FDIC-insured deposit sweep program through 10 partner banks.
Because Wealthfront Brokerage is a member of the Securities Investor Protection Corporation (“SIPC”), our customers are protected up to applicable SIPC limits if Wealthfront Brokerage were to go out of business and there were customer securities or funds unaccounted for.
In the unlikely event that Wealthfront fails, your money is protected up to 32 times more than the usual $250,000 insured by the FDIC. The additional coverage is made possible by Wealthfront's network of 32 partner banks.
Meanwhile, Wealthfront's equity allocation was boosted by a dedicated exposure to energy stocks (VDE) and the Schwab Dividend ETF, which both outperformed the S&P 500 index.
Our investing accounts have up to $500,000 in SIPC insurance
SIPC insurance covers up to $500,000 in total value per customer, half of which can be in cash. Wealthfront is a SIPC-insured brokerage, and thus your investing account at Wealthfront is covered by SIPC insurance.
Not very customizable. Like almost every robo-advisor, you don't get to pick individual stocks through Wealthfront. Beyond your risk tolerance, there isn't much you can customize unless you invest at least $100,000. At that point, Wealthfront lets you specify companies in which you don't want to invest.
Wealthfront security options are as thorough as traditional banks. Even though investment portfolios can lose value due to market fluctuations, Wealthfront guarantees SIPC insurance coverage on these accounts to protect you from broker-dealer failure. Similarly, cash accounts are protected by FDIC insurance.
Schwab doesn't charge management fees but requires you to hold cash in the portfolio. Wealthfront offers greater customization options and excellent digital financial planning tools at a lower account minimum and competitive fee. It really does depend on what you are looking for.
To connect your account, we partner with third-party providers to establish and maintain secure, read-only links on your behalf. These providers specialize in tracking financial data; they employ robust, bank-grade security and follow data protection best practices. Wealthfront does not store your account password.
Who is behind Wealthfront?
Wealthfront Inc. is an automated investment service firm based in Palo Alto, California, founded by Andy Rachleff and Dan Carroll in 2008. As of November 2023, Wealthfront had $50 billion AUM across 700,000 accounts.
Withdrawals typically take 1–3 business days from cash accounts and 3–4 business days from investment accounts. You'll receive an email confirmation when you request the transfer.
| Taxable | ||
|---|---|---|
| 1YR | Actual | 9.17% |
| 3YR | Actual | 4.89% |
| 5YR | Actual | 8.28% |
| Since Inception | Actual | 7.65% Since 08/22/2012 |
If you would like to invest around financial goals without having to select the actual securities to trade or when to trade, Wealthfront is the choice for you. Investors who would like to select their assets personally and build a financial plan based on their personal financial management should select Vanguard.
Learn more about how we review products and read our advertiser disclosure for how we make money. According to our research, Wealthfront is the best overall robo-advisor due to its vast customization options, fee-free stock investing, low-interest rate borrowing, dynamic tax-loss harvesting, and other key features.
Wealthfront uses multiple partner banks to ensure FDIC coverage of up to $8 million for your cash deposits. FDIC insurance coverage is limited to $250,000 per qualified customer account per banking institution. FDIC insurance is not provided until the funds arrive at the Program Banks.
Both Wealthfront and Schwab have had their run-ins with the SEC. In 2018, Wealthfront was fined $250,000 for making false claims regarding a tax-loss harvesting strategy it offers its clients. Wealthfront failed to manage the accounts properly and 31% of the participants faced penalties due to the mismanagement.
First off, putting all your eggs in one basket, even if that basket is woven by Wealthfront's algorithms, could scramble your financial plans if the basket takes a tumble. Wealthfront, like any robo-advisor, uses software to manage your investments across various asset classes - but that doesn't mean you're invincible.
We've partnered with Green Dot Bank, Member FDIC, to bring you checking features.
Your assets are held in a brokerage account in your name at Wealthfront Brokerage LLC, a subsidiary of Wealthfront Corporation. Please note that Wealthfront Brokerage LLC has partnered with RBC Clearing & Custody (RBC CC) for many clearing functions such as trade settlement.
What is the average account size for Wealthfront?
The average Wealthfront client trusts us with over $91,000.
It depends on what you're looking for. Robinhood offers more investment types, including cryptocurrencies and options. Wealthfront offers more account types, including SEP IRAs and 529 Plans. Both let you invest in individual stocks and ETFs, but only Wealthfront offers to manage your account for you (for a fee).
We convey funds to institutions accepting and maintaining deposits. Investment management and advisory services are provided by Wealthfront Advisers LLC (“Wealthfront Advisers”), an SEC registered investment adviser, and financial planning tools are provided by Wealthfront Software LLC (“Wealthfront”).
Depending on the status of your account, the money should arrive between 1-3 business days. Note: There is a daily ACH transfer limit of $250,000, so any loan request greater than that amount will be sent over multiple business days.
A focus on FDIC insurance and Treasury-only money market or bond fund options can help safeguard investments when a banking crisis threatens.
