Robo-Advisors vs Vanguard

This was bound to happen because fees for an in person advisor are astronomical. Robo-advisors or target funds are great for the fire and forget it investor. If you want to spend a small amount of time, you can save the .25% many of the robos charge and just reallocate on your own every quarter. A broker like TDA offers commission free trades for 100s of ETFs. Just so happens, most of these ETFs are the same ones Wealthfront and Betterment use.

Wealthfront's fees are on top of the fees of whatever ETFs they bought you.

If you're robo-investing, just use the Vanguard robo-investor directly. It has basically the same functionality and lower fees (about 0.15% once you count them crediting Vanguard fund expense ratios).

I started with Wealthfront and Betterment, but honestly I could just buy some mutual funds at Vanguard and pay 4 or 5 basis points in fees instead 25 (and then the same 4 or 5 basis points for what they buy).

Seems pretty similar to Betterment or a host of other providers (Personal Capital, etc). All these guys rely on the same thing: low-cost, large ETFs and the use of modern portfolio theory (MPT) to put together a balanced portfolio. The problem with all of them is the same - following MPT in 2007-2008 would have gotten you killed. All that being said, getting people to save and invest in general is a very good thing - so maybe there's the true value of the idea.

I love articles like this. I get so frustrated when I see colleagues hire a financial advisor that sells them a "managed portfolio" that is on-par with it's market comparable index and/or sell them on products like annuities that make no financial sense whatsoever. And they charge 1%-1.5% of assets under management which can be 10x what something like Vanguard would charge you.Personally, I use Betterment (a competitor to WealthFront) simply becasue I can set a target asse

I don't actually, mostly because I have been in school since I learned about it and haven't made any money since then to put in an account. Realistically, my understanding is that they are essentially using Vanguard ETFs. Their trick is that they actively manage your portfolio. If you are willing to spend the time to constantly rebalance your holdings (and have a good knowledge of ETF betas so you choose them correctly from the outset), then it is definitely better for you to do it you

I don't really see the advantage there over a service like Wealthfront or Betterfront, which offer automatic tax minimization, integrated handling of IRAs, and customizable stock-bond balances, or even just investing in Vanguard target date ETFs directly for similar returns with slightly lower fees.

I'd recommend vanguard.com . From what I can tell, wealthfront is largely repurchasing vanguard funds and selling them downstream.

Agree with the sibling comment -- you can achieve a good portfolio allocation with 3-4 ETFs. What Wealthfront and Betterment do is pick these funds for you, then charge you 0.25% year over year for the privilege of maintaining them. It's not the best deal for the investor because the work is not particularly hard -- "managing" your investments as a Boglehead would ideally involve logging into Vanguard once a year to rebalance.(In fairness, they do some other stuff which is more