I recently become interested in wealthfront, and plan to make the first real investment in my life. However, as I read more about mutual funds and ETFs, I realize that wealthfront is actually built upon on vanguard's mutual funds and ETFs.

The fees of wealthfront is higher than vanguard's mutual funds and ETF. Then I get a question: why pay more if I can buy from vanguard directly.

I find one answer to that wealthfront is more tax efficient. But this seems a minor reason to me. The other answer is that the minimum investment of wealthfront is smaller. I actually don't care about that.

Then what's the real advantage of wealthfront over vanguard?

  • 3
    Maybe none. People don't usually make a through research. Anecdote: You could get overpriced razors at your local grocers. Then some guys make the Dollar Shave Club and ship ~ $1 (&up) razors to your home. Then after some digging it seems you could get the same razor at a third of the price. Bottom Line: sometimes its selling convenience, sometimes it is just betting on lack of research. Oct 31, 2016 at 11:37

1 Answer 1


The Wealthfront website explains the services that it provides, and Vanguard doesn't provide most of those services so those extra services are the benefit of using Wealthfront.

It sounds like the question you want to ask is "Are the services provided by Wealthfront worth the additional fees that it charges?" That is a matter of personal preference more than anything else.

For me, I read the Bogleheads book, I manage all my investments in a portfolio of 4 ETFs, and I rebalance on a periodic basis. Regarding tax-loss harvesting, that adds a fair amount of complexity for small benefit that may not be worth the additional fees so I have stayed away from it. For me, the fees charged by Wealthfront aren't worth it.

For someone who doesn't want to deal with the hassle of setting up a portfolio of ETFs and rebalancing, Wealthfront seems like a good service. Its fees are much lower than many other options so you could do a lot worse.

It really comes down to whether you are a do it yourselfer with your investments or not.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .