Wealthfront vs. E*TRADE Core Portfolios: Which Is Right for You? (2024)

Wealthfront is a robo-advisor that dates back to 2008 and has been known as a pioneer in digital investment management, while E*TRADE Core Portfolios was created in 2016 by one of the first online brokerages, which dates back to the 1990s. In 2020, E*TRADE was acquired by Morgan Stanley, in an all-stock transaction. Both have made our list of thebest robo-advisors of 2024, with Wealthfront winning best overall and best for goal planning, best for portfolio construction, and best for portfolio management, while E*TRADE Core Portfolios is our winner for best for mobile.

E*TRADE Core Portfolios has taken a simpler and straightforward approach that allows customers to self-guide through a basic goal and risk profiling section to create a self-running portfolio that will automatically rebalance, allow for changes, and invest in socially conscious funds. A big addition for E*TRADE Core Portfolios in 2024 is tax-loss harvesting and an improved asset depth. Wealthfront is also a self-directed and automated program, but its Path software is designed to electronically provide a full investment advisor type of experience that includes the ability to see a much more complete financial picture through account aggregation. We will take a deeper look at these two digital investment management platforms to see which is a better fit for you.

Account Setup

Account setup at both E*TRADE Core Portfolios and Wealthfront is straightforward and simple to do, with both brokers requiring a minimum investment of $500 to fund a digitally managed portfolio.

E*TRADE Core Portfolios

E*TRADE Core Portfolios allows anyone to run multiple scenarios and view potential portfolios without any type of registration. Moreover, investment advisors are available during the day to assist customers with establishing an account, although the focus of this assistance is getting up and running instead of true investment advice. E*TRADE’s focus on ease of use allows investors to run through the questionnaire and portfolio selection process very quickly—existing E*TRADE customers could have a Core Portfolios account created in minutes with a transfer from an existing account.

Wealthfront

The account setup and portfolio creation process at Wealthfront is just as easy but requires the establishment of an account by entering a name, email, and phone number. You don’t have to fund an account in order to set one up. Once an account has been established, you go through a preliminary questionnaire that gathers information such as your overall portfolio goal and standard questions about age, income, net worth, and risk tolerance. This initial questionnaire, along with the choosing between classic, socially responsible, or direct indexing (available for accounts with $100,000 or more) leads to your portfolio recommendation. The portfolio will be funded once the account is linked to a bank account and the account balance reaches $500 or more. Once a bank account has been linked to the Wealthfront account the user gains access to Path, a comprehensive digital financial planning tool.

With Wealthfront, the process is certainly more involved, but not overly so, as it’s still account setup, portfolio selection, and account funding. The payoff for the longer process at Wealthfront is access to Path, which goes far beyond E*TRADE’s Core Portfolio offering but is addressed later in our matchup. There is also additional work for you if you decide to sync multiple accounts with Wealthfront to maximize the Path financial planning software.

Account Setup Verdict: E*TRADE Core Portfolios

Overall, we give E*TRADE an edge in account setup, primarily because you don’t have to sign up and open an account to take the profile questionnaires and see potential portfolios. With Wealthfront, you can view their classic portfolio but you need to create a profile to view other recommendations.

Account Types

Both E*TRADE’s Core Portfolios and Wealthfront offer commonly used accounts, but only Wealthfront offers trust and 529 plan accounts under its digital investment advisory.

Wealthfront

• Individual taxable accounts
• Joint taxable accounts
• Custodial accounts
• Traditional individual retirement accounts (IRAs)
• Roth IRA accounts
• Simplified employee pension (SEP) IRA accounts (for the self-employed and small businesses)
• Rollover IRA
• Trust accounts
• 529 Plan Accounts
  

E*TRADE Core Portfolios

• Individual taxable accounts
• Joint taxable accounts
• Custodial accounts
• Traditional IRA accounts
• Roth IRA accounts
• SEP IRA accounts
• Rollover IRA

Account Types Verdict: Wealthfront

Wealthfront has the edge in this category because it offers digitally managed accounts for trusts and 529 plans. In practice, however, this is a tie unless you are specifically looking to open one or both of Wealthfront's additional accounts.

Account Services

Cash Management

E*TRADE Core Portfolios allows customers to set up automated recurring deposits with an amount that is easy to increase or decrease. While margin is not available, borrowing against the portfolios is supported for accounts. E*TRADE's current rates range from 7.3% to 10.4% depending on the account balance. Moreover, individual holdings from other E*TRADE accounts cannot be included in Core Portfolio accounts. E*TRADE charges termination fees of $75 for full withdrawals and $25 for partial withdrawals (the fee for partial transfers is waived for accounts with more than $5,000 in assets); these fees do not apply when transferring funds to other E*TRADE accounts.

While E*TRADE Core Portfolios offers checking account and credit card services, these are handled outside of the robo account so transfers from the Core Portfolio would be required. Cash in the Core Portfolios account, typically allocated as 1% of the portfolio, will be swept into a money market account that pays a low interest rate until there is a portfolio rebalancing.

Wealthfront also allows for automated deposits and borrowing up to 30% of the portfolio’s value at interest rates ranging between 7.65% and 8.90%. Wealthfront does not charge fees for transfers and allows portfolio assets to be transferred to a separate cash management account. For accounts with $100,000 or more, individual securities and ETFs can be incorporated into the automated portfolio through direct indexing.

Cash services are also supported at Wealthfront, although they do not offer a credit card. Wealthfront’s cash management offers check writing, a debit card, mobile-based deposits, and bill payments, and is easy to move money into from your investment account. The cash management account currently pays 5.00% interest.

Cash Management Verdict: Wealthfront

Overall, Wealthfront gets a slight edge with account services and cash management. It doesn’t charge termination fees, and its lending rates are lower for accounts with less than $500,000. It also offers a higher interest rate on its cash account.

Goal Planning

E*TRADE Core Portfolios

Goal planning tools on E*TRADE’s Core Portfolios are lacking, seemingly because they have made a conscious decision to have a streamlined digital investment management platform. As such, Core Portfolios only has a handful of drop down questions and there is no ability to customize for individual investors. In addition, Core Portfolios accounts can only be set up for one goal.

Wealthfront

Wealthfront, in contrast, won our category for best goal planning in the digital investment advisory space because they provide an opportunity to aggregate accounts so you can see a full picture of your wealth, finances, and goals. Further, Wealthfront’s automated financial advisor program, Path, is a sophisticated tool that replicates a human financial advisor, asking you multiple questions about various life goals. Path is equipped to answer more than 10,000 questions, such as how much you can spend on a house in a particular city, how early you can retire, and other potential goals such as paying for a child’s education or a wedding. Path then helps track the progress of the goals with charts and graphs to show the cost of overall goals. This summary information changes as the relevant variables change, and Path also has the ability to project the impact of inflation, projected income changes, and market performance. This allows Path to build a financial plan that outlines the required savings to meet all your financial goals.

Goal Planning Verdict: Wealthfront

When it comes to goal planning, Wealthfront offers much more than E*TRADE’s Core Portfolios.

Portfolio Construction

Wealthfront has an edge over E*TRADE because they offer more investment vehicles including real estate investment trusts (REITs) and cryptocurrency funds, as well as flexibility for customers to customize their portfolio. E*TRADE Core Portfolios has closed some of the distance in a subtle way, however, as it has expanded the asset classes from funds covering large U.S. and foreign stocks to a deeper global pool as part of its integration with Morgan Stanley. This also led to the introduction of a 100% equity option in Core Portfolios without any bond allocation. All that said, Wealthfront still offers unique crypto exposure while E*TRADE Core Portfolios does not.

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