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.
We protect your cash with FDIC insurance through our partner banks. Your cash is insured by the Federal Deposit Insurance Corporation (FDIC).
In January 2022, UBS, a Switzerland-based wealth management conglomerate, agreed to acquire Wealthfront for a purchase price of $1.4 billion. This acquisition was intended to help UBS grow in the US market and allow the large firm to access Wealthfront's technological prowess.
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.
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.
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.
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.
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.
We've partnered with Green Dot Bank, Member FDIC, to bring you checking features.
Wealthfront is not a bank, but the funds in your Wealthfront Cash Account are FDIC insured up to $8 million through our partner banks where we sweep your deposits. This means you can benefit from more FDIC insurance without the hassle of dealing with multiple banks yourself.
Is Wealthfront at risk?
Like other savings accounts, money deposited in the Wealthfront Cash Account is not subject to investment risk.
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.
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.
We invest your money across the right mix of asset classes for your risk tolerance. To maintain this diversification, we automatically rebalance your portfolio.
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).
The bottom line is: we've been good for our clients' bottom lines. Investors in Wealthfront's Classic Automated Investing Account, with a risk score of 9, watched their pre-tax investments grow an average of 8.19% every year since we started.
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.
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.
Wealthfront is very clear on its target audience: young people—primarily Millennials—who have less than a million dollars to invest and are comfortable delegating management of their portfolios.
Is Wealthfront a fiduciary?
As an SEC-registered investment advisor, Wealthfront assumes the full fiduciary standard of service for our clients, meaning we always have to act in their best interests and deliver the best possible service we can, with no conflicts of interest.
About Wealthfront
The company currently oversees more than $50 billion for over 700,000 clients in the US.
Yes. The Wealthfront Cash account is FDIC insured for up to $8 million per depositor.
Wealthfront was founded in 2008 by Andy Rachleff and Dan Carroll and launched automated investing services in 2011. It is a pioneer in using automation to craft low-cost investment portfolios for Americans. The company also uses elements of artificial intelligence in its financial planning software.
Fee-free ATM access applies to in-network ATMs only. For out-of-network ATMs and bank tellers a $2.50 fee will apply, plus any additional fee that the owner or bank may charge.
