Wealthfront vs Empower Investing Features
Wealthfront and Empower provide a range of sophisticated features for direct and automated investing, portfolio management, customization, research, and other investor options.
Below are the key features each platform offers, with screenshots taken by our team:
Empower | Wealthfront | |
|---|---|---|
Investing Options | Thousands of assets via automated investing | 1,500 stocks, ETFs, and REITs |
Account Types | Brokerage, Retirement, College 529s, Trust | Brokerage, Retirement, College 529s |
Financial Planning | Yes | Yes |
Automated Investing | Yes | Yes |
Tax Loss Harvesting | Yes | Yes |
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Automated Investing
Wealthfront's automated investing platform, often referred to as a robo-advisor, leverages advanced algorithms and technology to manage investment portfolios with minimal human intervention.
The process begins with an account setup where users complete an online questionnaire that aseses various factors, including financial goals, risk tolerance, time horizon, and other personal financial details.
Based on your risk profile, Wealthfront builds a diversified portfolio using low-cost index funds. These funds track specific market segments, offering broad exposure without the need to pick individual stocks. This diversification helps spread risk and smooth out market bumps.
Similar to Wealthfront, Empower designs an investment portfolio tailored to individual requirements and long-term goals. This feature utilizes Monte Carlo simulations to evaluate the likelihood of achieving these goals.
This customization considers personal preferences and tax situations, allowing for requests for specific asset allocations, including the addition or exclusion of individual stocks, replacement of ETFs, and specialized tax-influenced strategies.
Another feature is “Smart Weighting,” which allocates assets based on sector, style, and asset rather than market capitalization. This approach aims to offer a higher risk-adjusted return compared to traditional market cap-weighted allocations.
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Financial Planning
Wealthfront offers a robust suite of tools and features that help users plan for various financial objectives, such as retirement, buying a home, or funding education.
Wealthfront's financial planning is seamlessly integrated into its investment management service, allowing users to benefit from a holistic approach to their finances.
The platform's Path tool is central to its financial planning capabilities. It uses real-time data and sophisticated algorithms to create personalized financial plans based on users' specific circumstances.
For savings goals, Wealthfront offers automated saving features that analyze cash flow and recommend optimal savings strategies.
Before considering investing with Empower, you can link your financial accounts to utilize their free budgeting platform, which resembles other budgeting apps like Mint.
This feature allows you to immediately view your monthly cash flow, changing budget, and net worth.
Another aspect of Empower that stands out is the goal planning feature. After setting your financial goals, you benefit from ongoing monitoring with a financial advisor, who provides opportunities for revisions as your circumstances evolve.
Empower also offers a comprehensive dashboard that includes a retirement planner page. By entering basic information such as your age, income, and savings behavior, you can quickly obtain a retirement projection.
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Self Investing Options
Wealthfront offers an efficient and intuitive approach to investing in individual stocks, equipped with features that make stock investing more accessible and effective. Customers can begin investing in individual stocks with as little as $1, thanks to the availability of fractional shares.
Wealthfront categorizes stocks into pre-built collections like blue chip, tech, semiconductor, and cloud computing.
These collections simplify the investment process by grouping together stocks with common traits or business models, helping investors make smarter decisions more swiftly.
On the other hand, Empower Investment Account is a brokerage account designed for individuals who want to investing in specific stocks and ETFs.
There are no account fees and you can trade stocks and many mutual funds commission-free. They offer a wide range of investments including stocks, bonds, ETFs, and mutual funds. You can choose to manage your own investments or get help from a financial advisor (extra fee).
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Additional Features Worth Mentioning
The Socially Responsible Investing option by Empower was particularly beneficial. This portfolio focuses on companies with high environmental, social, and governance (ESG) standards.
Additionally, the Empower app enables users to set alerts and notifications, ensuring they stay updated on any chnages in net worth, investments and account activities.
Wealthfront also offers an Automated Bond Ladder, investing in US Treasuries to earn more on extra cash. Treasuries are exempt from state and local income taxes.
Wealthfront's referral program offers a rewarding benefit: when you invite an eligible person who then opens and funds an Automated Investing Account, both you and your friend will receive $5,000 in assets managed for free as long as your friend continues to be a Wealthfront client.
Fees
Both platforms don't charge a fee if you trade stocks or ETFs. However:
- For their investment management services, Empower charges an annual management fee that is a percentage of the assets they manage for you. The annual fee is 0.49% – 0.89% For private clients: First 3M – 0.79%, Next 2M – 0.69%, Next 5M – 0.59%, Over 10M – 0.49%. For primary and premium clients – 0.89%.
- Wealthfront, on the other hand, charges an annual advisory fee of 0.25% when if you use the automated portfolio to manage your investments.
Does Any Of Them Offer Advisory Services?
Only Empower offers comprehensive advisory services designed to help individuals achieve their financial goals.
Empower does offer Advisory Services through Empower Advisory Group (EAG). These services are designed to help individuals, especially with retirement planning, by providing personalized strategies and recommendations.
Empower offers a range of options depending on your comfort level with managing your own investments.
For those who want professional management, Empower offers services like My Total Retirement or the Professional Management Program, where advisors handle the investment decisions.
For the more involved investor, Empower provides Online Investment Advice, which validates your investment choices and offers suggestions based on your goals and Empower's available investment options.
Wealthfront vs Empower Banking Options
Wealthfront offers more advanced banking features than Empower. Let's compare these options side by side:
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Both Offer High Savings Rates
Empower Personal Cash offers a high-yield cash account with a Earn up to 4.00% APY. With no account fees or minimum balance requirements, this account provides flexible access and unlimited monthly transfers.
Users can set up direct deposit, and funds are protected with up to $5 million in aggregate FDIC insurance.
Empower | Wealthfront | |
|---|---|---|
Savings APY | Earn up to 4.00% | 4.25% |
Wealthfront offers its cash account through partner banks, providing up to $8M in FDIC insurance and a 4.25% APY without any minimum or maximum balance requirements.
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Only Wealthfront Cash Management
Wealthfront's Cash Management Account combines the best features of a high-yield savings account and a checking account. There are no monthly maintenance fees or ATM charges, and the account can be opened with just $1.
The Wealthfront mobile app allows you to manage your account, track your spending, and transfer funds on the go. Customers can pay bills and make purchases directly through popular payment platforms like PayPal, Apple Pay, Google Pay, Cash App, and Venmo.
When it comes to cash management and banking options, Wealthfront wins as Empower doesn't offer features like cash withdrawals or deposits, payment apps integration or the options to Pay bills or send and deposit checks like you can do with Wealthfront.
Bottom Line
Wealtfront vs. Competitors: How Does It Stack Up?
Wealthfront and Acorns offers advanced automated investing options, appealing investing features and banking options. Here's our comparison:
