Where do you turn when you’re looking for a robo-advisor with medium to low account management fees and a low investment minimum? The good news—and the bad news—is that there are a lot of robo-advisors with low fees and minimums.
We’re here to help you make sense of your options. Today we’re putting Wealthfront and Fidelity Go head to head so that you can determine which robo-advisor meets your financial needs.
Wealthfront vs. Fidelity Go – Overview
Wealthfront is one of the premier robo-advisors and offers clients quite a few investment options. In addition to the traditional retirement accounts, Wealthfront clients can also invest in 529 college savings accounts and high yield cash accounts.
Beyond offering varied account types, Wealthfront takes great care to understand their investors. The Wealthfront sign-up process is amoung the most comprehensive. The Path digital financial advisor within the Wealthfront platform is designed to mirror a human financial advisor’s questions. Your risk tolerance, goals, and financial situation are accounted for before your portfolio is created.
Fidelity Go allows for flexible investment management. Fidelity Go offers more investment options than Wealthfront. Investors can choose automated investing or professional management for a portion of their portfolio. Actively managed portfolios have the chance of outperforming the market, though they do come with risks. Balancing a portfolio that combines passive and active management might be the winning strategy!
Wealthfront vs. Fidelity Go Comparison – Top Features
|Overview||Wealthfront offers a low fee digital investment portfolio management tool with the added potential to lower your taxes.||Automated investment advisor based on your risk tolerance and goals.|
|Minimum Investment Amount||$500||No minimum balance required.|
|Fee Structure||0.25%||0.35% AUM. |
The annual fee may be reduced via the application of a “variable fee credit,” the amount of which will vary based on the investments held in your account. All investment funds carry $0 management fees.
|Top Features||Automated investment management including rebalancing, daily tax-loss harvesting & portfolio review. Simple selling plan for those with company stock. For investors with more than $100K, tax-optimized direct investing service may lower taxes & increase returns. Path online financial advisor explains whether you’re “on track” for retirement.||FidelityGo sets up a diversified portfolio of ETFs from these categories; domestic stocks, foreign stocks, bonds, or short term investments. Short term investment category is distinct from many other robo-advisors & good for ready cash access. Regular rebalancing is available.|
|Free Services||Free portfolio review and home buying guide.||N/A|
|Contact & Investing Advice||Phone M–F 10 am–8 pm ET |
Live Chat (offline) 8 am – 8 PM EST Monday – Friday
|Investment Funds||Low fee, diversified stock & bond ETFs.||Combination of mutual funds and exchange traded funds (ETFs), depending on the investment strategy you select. Funds generally hold domestic stocks, foreign stocks, bonds, or short term investments. The majority of funds carry no management expense ratio.|
|Accounts Available||Individual & joint investment accounts. Roth, traditional, SEP & rollover IRAs. Trusts. 529 college savings plan accounts.||Individual & joint investment accounts. Roth, traditional & rollover IRAs.|
Wealthfront top features:
- Daily tax-loss harvesting
- Path financial planner – a comprehensive digital financial advisor
- 529 college savings accounts
- Direct indexing for larger accounts
- High yield cash management account
Fidelity Go top features:
- Predictions for likelihood of achieving target goals
- Automated suggestions for reaching financial goals
- Short-term investments available
- Only $10 required to start investing
- Offers actively managed funds plus passive index funds
Wealthfront vs. Fidelity Go – Who Benefits?
Investors who want their robo-advisor to be connected to a larger family of investment services would benefit from working with Fidelity Go. If you want your robo to include actively managed funds as well as the typical passively managed index funds, then Fidelity Go is the best option.
Fidelity Go is part of a full service financial management company which offers services such as life insurance, wealth management, and retirement services.
Fidelity Go would also benefit investors who like more frequent check-ins. On their website, Fidelity Go states that investors can expect summary emails and check-ins to ensure they are investing with your most up-to-date information possible.
That being said, those who are looking for tax-loss harvesting will benefit from Wealthfront. Wealthfront’s .25% investment management fee is also lower than Fidelity Go’s .35% fee. Although Fidelity does use several zero fee ETFs. Additionally, Wealthfront takes it up a notch by offering daily tax-loss harvesting for investors. Fidelity, on the other hand, does not offer this service at all.
Wealthfront’s new high yield cash account is enticing for investors seeking higher yields for short term cash.
When chooseing between Fidelity or Wealthfront, it’s best to consider your own financial needs.
Wealthfront vs. Fidelity—Fees and Minimums
Wealthfront requires a minimum initial investment of $500—a relatively low minimum.
While no-minimum investment robo-advisors do exist, in the grand scheme of things a $500 minimum investment amount is affordable.
Wealthfront is also middle of the road in terms of their management fees: .25% AUM. This fee puts them in line with other heavy hitters like Betterment and SigFig.
On the other hand, investors who don’t have $500 handy or want to test the robo-advisor market with a smaller initial investment will love Fidelity Go. You can get started with no minimum investment with this robo-advisor!
Fidelity’s management fees are higher than Wealthfront’s—.35% AUM. This fee is closer to robo-advisors like Vanguard and TD Ameritrade, both of which will also connect investors to a host of other financial services in connection with their larger institutions. However, Vanguard and TD Ameritrade charge only .30% AUM for their robo-advisor services.
Wealthfront vs. Fidelity Go -Deep Dive
Wealthfront and Fidelity Go are relatively affordable, with low (or no!) minimum investment requirements and fees well below those charged by traditional financial planners. So what really sets the two apart?
Wealthfront vs. Fidelity—Performance Awards
Fidelity Go performed better than Wealthfront during the first few months of 2019, earning second place in two categories (growth and balance) while Wealthfront took third in a single category (income).
Take these numbers with a grain of salt, as robo-advisor performance can fluctuate just as much as any other investment option out there. However, the fact that both robo-advisors have been ranked a top performer for multiple years shows they’re doing something right.
Wealthfront vs. Fidelity—Retirement Planning
In 2017, Wealthfront rolled out the Path Financial Planner, an in-depth retirement planning tool. This tool links your existing accounts to determine your current financial situation. It then looks at your goals, your financial choices, and factors outside of your control (like inflation and social security) and determines whether you are on the path to success.
If that isn’t enough, Path also helps investors allocate their savings across all platforms. This includes accounts held outside of Wealthfront.
Like many other robo-advisors, Fidelity Go manages and monitors your portfolio to ensure that your allocations and risk stay in line with your goals; however, they don’t have the sort of comprehensive retirement tool that Wealthfront does.
Wealthfront vs. Fidelity—Tax Loss Harvesting
Many robo-advisors offer tax-loss harvesting, though not all. Fidelity Go is in the latter category.
The Fidelity Go robo-advisor does not offer it.
This leaves Wealthfront as the clear victor in this category—if tax-loss harvesting is something you are interested in! Just remenber, that tax-loss harvesting only matters for taxable accounts, since IRA and other retirement accounts are not taxed while the investments are owned within the account. And, Roth IRA distributions aren’t taxed either if they meet certain conditions.
Wealthfront believes that their daily tax-loss harvesting is more beneficial than the TLH offered less-frequently by competitors.
Wealthfront vs. Fidelity Go – The Takeaway
Wealthfront has a higher initial investment requirement, which can put it out of reach of some beginning investors. That being said, at only $500 the Wealthfront minimum investment is still low. Coupled with their .25% AUM fee, Wealthfront is an affordable option.
Wealthfront’s benefits include frequent tax-loss harvesting and the Path Financial Planner tool, both of which work to ensure that clients stay on-track and supported throughout their investment process.
Fidelity Go is more accessible for first-time investors with no minimum investment requirement, but their .35% AUM fee, while still middle of the road for a robo-advisor, is higher than other no-minimum robos on the market. Although their zero management fee ETFs will slightly offset the higher management fee.
Fidelity Go might also make up for the higher fees due to its connection to Fidelity Investments, meaning that clients reap the benefits of joining the Fidelity family. They also offer account monitoring that keeps clients on track and have out-performed Wealthfront in two categories so far this year.
It’s a close contest between Wealthfront vs Fidelity Go. If you have a non-retirement investment account then Wealthfront’s tax-loss harvesting and lower management fee is a big draw. But, if you want access to the Fidelity platform, are interested in actively managed funds, and are comfortable with paying a slightly higher management fee, then Fidelity Go might be your choice.
Whether you choose Fidelity, Wealthfront or another robo-advisor, the best advice for building wealth is to begin investing today, for the long term!
Read the Complete Wealthfront Review
Direct Access: Wealthfront
Read the Complete Fidelity Review
Direct Access: Fidelity Go
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