Wealthfront vs. Schwab Intelligent Portfolios: Which Is Best for You? (2024)

Wealthfront and Schwab Intelligent Portfolios are distinct enough to make the choice rather easy regarding which is best for you. If you don’t have the $5,000 minimum required by Schwab Intelligent Portfolios, then Wealthfront’s $500 account minimum is an easier bar to clear. In terms of fees, however, Schwab Intelligent Portfolios has no fees compared to 0.25% at Wealthfront.

Both robo-advisors offer some level of portfolio customization, and Schwab's Intelligent Income option is a find for those seeking sustainable cash flow. Knowledgeable Wealthfront users can put their own stamp on the portfolio by adding additional exchange-traded funds (ETFs). Wealthier investors might lean toward Schwab’s Intelligent Portfolio Premium with Certified Financial Planner access and low subscription pricing. For those looking for access to more traditional support, the 24/7 customer service and branch access available at Schwab is also enticing. We will compare both digital investment advisors to help you decide which is best for you.

Account Setup

Wealthfront

The Wealthfront account setup process is quick. Users complete an initial questionnaire that assesses goals, timeline, and risk level. You can create an account with your name, email, address, phone number, and password. No Social Security number is required to view the suggested Core portfolio, which is a nice benefit. The Core offer includes U.S. and international stock and bond ETFs along with a real estate ETF—another plus not found on some competitors' platforms. Users can check out alternate portfolio choices before transferring funds into the account.

You will need a $500 minimum to begin investing at Wealthfront. The management fee of 0.25% of assets under management is near the average digital advisory cost. No financial planners are available at Wealthfront, although the well-trained customer service representatives each have, at a minimum, a Series 7 investment license. More sophisticated investors can add to existing portfolios or create a new portfolio from a choice of 200-plus ETFs and cryptocurrency funds.

The well-regarded Path digital financial planner, available to clients and the public, enables users to link external accounts and receive high-level digital financial planning guidance.

Schwab Intelligent Portfolios

To set up an account, Schwab Intelligent Portfolios guides users through 12 questions spanning investing goals, timeline, and risk tolerance. Your responses inform a customized investment portfolio containing ETFs and a cash allocation. You must open and fund an account to view the actual names of the tailored portfolio ETFs. This drawback is partially offset by Schwab’s choice of low-fee, diversified funds for Intelligent Portfolios.

The barrier to entry is a $5,000 account minimum, steeper than many digital investment managers. Making up for the high account minimum, however, is the fact that Schwab Intelligent Portfolios doesn’t charge an investment management fee. Some investors will take issue with the higher than average cash allocation within each portfolio as it can contribute to performance drag over time. In especially conservative portfolios, the cash allocation can reach 30%, but investors with greater risk tolerance will find cash allocations of 6% within Schwab’s global and U.S.-focused strategies.

The Schwab Intelligent Portfolios interactive tool provides potential best- and worst-case scenario investment returns based on investment strategy and risk tolerance level. Although Schwab Intelligent Portfolios' basic version doesn’t include investment advisors, you can visit a branch or speak with a well-qualified customer service representative for basic guidance.

Account Setup Verdict: Wealthfront

Onboarding is easy at both platforms. That said, we like the opportunity to view specific ETFs before funding an account at Wealthfront, so it gets the edge in this category.

Account Types

Most investors will find sufficient account types at either platform. Wealthfront has a high-interest cash account, which requires an additional sign-up. Schwab requires a new account for its checking account with a debit card. Other account differences include a 529 college account at Wealthfront and Schwab’s custodial and SIMPLE individual retirement accounts (IRAs).

Wealthfront

• Individual taxable
• Joint taxable
• Traditional IRA
• Roth IRA
• 401(k) rollover IRA
• Simplified employee pension (SEP) IRA
• Trust
• 529 college saving plan
• High-interest cash

Schwab Intelligent Portfolios

• Individual taxable
• Joint taxable
• Traditional IRA
• Roth IRA
• SEP IRA
• SIMPLE IRA
• Revocable living trust
• Custodial

Account Types Verdict: Tie

The basic account types are available at both Wealthfront and Schwab, so this category is effectively a tie. If you are looking for a 529 plan, choose Wealthfront. Those seeking a custodial account or SIMPLE IRA should select Schwab.

Account Services

Wealthfront

Investors who open an account with Wealthfront will have access to all of the expected financial products and services available at a major financial firm. Presently, Wealthfront customers have the usual auto deposits along with cash accounts, debit cards, and lending.

Schwab Intelligent Portfolios

Schwab Intelligent Portfolios sticks with investment management without checking, debit cards, or lending products within the robo-advisory. But with a click, Intelligent Portfolios users can sign up for banking, lending, self-directed investing, and more within the larger Schwab financial services universe.

Cash Management

Wealthfront

Wealthfront Cash management requires a separate sign-up. The fee-free, high-yield checking account is available to anyone, whether they have a Wealhtfront investment account or not. Top features include goal-based saving, a fee-free ATM debit card, bill pay, and direct deposit. Wealthfront Borrow provides account holders with at least a $25,000 account value the opportunity to borrow up to 30% of their holdings for low interest rates without a credit check. Uninvested funds in a Wealthfront account are swept into a money market fund currently yielding 5.13%.

Schwab Intelligent Portfolios

Schwab Intelligent Portfolios doesn’t offer cash management within the robo-advisory platform, but access to cash management is quite straightforward. Anyone can open a Schwab high-yield checking account with debit card, banking, and brokerage services.Schwab Intelligent Portfolios does hold a larger amount in cash than most robo-advisors that strive to be fully invested except for enough to cover fees. That said, it also offers a cash sweep to Schwab Government Money Fund - Sweep Shares, yielding 4.92%.

Cash Management Verdict: Tie

At both Wealthfront and Schwab, you need to set up separate accounts for cash management. The distinction between the two is that Wealthfront’s cash management is more integrated with its investment services.

Goal Planning

Wealthfront

Winner of our Best for Goal Planning overall category, Wealthfront is superb for mapping your future plans. Choose from goals such as large purchases, college planning, and retirement. Your progress is updated automatically on the dashboard. The Path digital financial planner provides the opportunity to try out multiple goal-based scenarios. The tool can answer more than 10,000 financial planning questions, including “When can I retire?”, “How much should I save for a home down payment?”, and “Can I afford a new car?”. For a large majority of people, the Path is an effective replacement for a human financial planner in most situations.

Schwab Intelligent Portfolios

At Schwab Intelligent Portfolios, goal planning includes choices such as retirement, college, home down payment, long-term wealth, and income. Users can access Schwab’s interactive tool to assess how changes in the market, contribution rates, and other factors will impact the likelihood of achieving goals. All Schwab clients can access its digital financial planning tool, which helps you clarify your goals and create a personalized investment strategy.

Users seeking a digital investment advisor with financial planner access can sign up for Schwab Intelligent Portfolios Premium. Clients with $25,000 or more gain access to a Certified Financial Planner on an as-needed basis, along with automated investment management for the subscription pricing of $30 per month and a one-time setup fee of $300.

Goal Planning Verdict: Wealthfront

Both Wealthfront and Schwab Intelligent Portfolios offer top-notch goal-planning and advice options. As mentioned, however, Wealthfront’s Path digital financial planning tool is almost a match for a live financial planner, so we give it an edge here for having comprehensive digital advice within the platform.

Portfolio Construction

Wealthfront

Wealthfront's investment portfolios are created by an investment management team using modern portfolio theory (MPT). The investment team blends a variety of asset classes represented by ETFs to match the risk appetite of a given investor. Wealthfront's standard portfolio options include:

• Classic portfolios with diversified, low-fee index funds
• The Socially Responsible portfolio, focusing on socially responsible ETFs
• Direct Indexing with individual stocks ($100,000 account minimum)
• The Automated Bond portfolio, meant to create cash flow

Schwab Intelligent Portfolios

Schwab Intelligent Portfolios also uses an investment management team to build its portfolios. The team uses a combination of 51 ETFs to generate 80 variations to match the range of investor goals, time horizons, and risk tolerance using modern portfolio theory. Schwab doesn't offer a socially responsible version of its portfolios.

Portfolio Construction Verdict: Wealthfront

Both Schwab Intelligent Portfolios and Wealthfront use ETFs to represent the typical range of assets including U.S. and international stocks, bonds, REITs, and commodities. Wealthfront gets a slight edge here for having socially responsible and direct indexing options.

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