Wealthfront is a ‘smart’ robo-advisor with low fees no dummy could ignore.
The brains of this robo-advisor were created by former Vanguard executive and Princeton University professor Burton Malkiel – a father of passive index investing. Based on three decades of research on superior passive versus active investing returns, Wealthfront seeks to provide you with a long-term investment edge through its value-added products. This fiscal-minded robo-advisor seeks to improve your investment returns through tax saving strategies.
The famous academics at Wealthfront are not resting on their laurels. In 2017, Wealthfront added an Advanced Indexing product based on ‘smart beta’ factors proven over time to be drivers of long-term performance. Wealthfront’s value added products – Tax Harvesting, Direct Indexing, and Advanced Indexing are now bundled into the PassivePlus® product suite.
Assets Under Management: Over $5 billion
Client Profile: The average client is 37 years old and married with a joint income of $260,000, or $422,000 for premium clients.
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What do you need to start?
Click on Invest Now to start optimizing your investment portfolio with Wealthfront’s time-tested performance and tax-enhancing strategies.
What questions do they ask?
After answering the online assessment questions, a retirement portfolio based on your risk tolerance will be generated. Your portfolio will be generated in less than a minute from now. The questions cover your:
Is your priority to build a diversified portfolio, benefit from tax savings, to beat the market, or all of the above?
Next, the robo asks about your personal income, investments and other assets, and family status.
Do you seek to maximize gains, minimize losses, or both?
What would you do if your portfolio lost 10 percent of its value in a month?
Your investment plan with a detailed asset allocation will arrive within a few seconds in your email. To minimize your taxes, assets will be allocated into a taxable and non-taxable portfolio: a Taxable Investment Mix and Retirement Investment Mix, each diversified across up to 11 global asset classes. You will also receive your risk rating. You may update your rating monthly but are advised against changing your risk profile, and consequently your asset allocation. Remember the lesson from Malkiel’s popular 1973 book A Random Walk on Wall Street – “large advisory fees and substantial portfolio turnover” reduce investment results.