Recruitment is a crucial determinant of growth and success for real estate brokerages. Like your customer, the recruitment process can be visualized as a sales funnel, where potential recruits enter at the top, and the best-suited agents emerge at the bottom as ideal members of your team or brokerage. Understanding and optimizing each stage of this funnel is critical to streamline recruitment and attract top-tier talent. With that in mind, let’s break down a successful real estate recruitment funnel and how to optimize each stage:
1. Awareness
At this stage, potential recruits become aware of your brokerage and what it stands for. Think of this as your core brand narrative. Would an agent from the outside be impressed?
Optimization Tips:
Brand presence: Ensure your brokerage has a robust online presence, including an updated website and active social media profiles.
Content marketing: Establish yourself as a thought leader. Share insightful articles, market analyses, and success stories to position your brokerage as an industry thought leader.
2. Interest
Once aware, agents begin to show interest in what your brokerage offers. They may sign up for newsletters, follow you on social platforms, or attend webinars.
Optimization Tips:
Engaging content: Regularly post relevant content that addresses common questions or challenges agents face. Turn your brokerage into a solution.
Webinars and workshops: Organize events that showcase your brokerage’s expertise and the benefits of joining your team. Highlight subjects that are not inherently a sales pitch but naturally put your team in the best possible light.
3. Consideration
At this point, agents are actively considering joining your brokerage. They might reach out with queries, ask for meetings, or seek feedback from current agents.
Optimization Tips:
Testimonials: Share success stories and testimonials from your current agents. Real-world experiences can be the compelling piece of content you can share.
Transparent communication: Be clear about commission structures, growth opportunities, and your support to your agents. A lack of communication can make someone feel they made the wrong decision.
4. Intent
Agents are on the verge of making a decision. They’ve likely narrowed down their options and are comparing the benefits of various brokerages.
Optimization Tips:
Personalized outreach: Always use personalized communication to address any remaining concerns or questions they might have.
Showcase Technology: If your brokerage uses advanced tools and technologies that can simplify their workflow, highlight them without overwhelming them.
5. Decision
The crucial stage is where agents decide to join your brokerage. They’re convinced that your brokerage aligns with their goals and aspirations. The first 90 days are critical.
Optimization Tips:
Smooth onboarding: Ensure the onboarding process is seamless. From paperwork to training, every step should be organized and efficient.
Welcoming environment: Create a welcoming atmosphere, introducing new agents to the team and integrating them into your brokerage culture.
6. Retention
While technically outside the recruitment funnel, retaining agents is as essential as recruiting them. It’s about keeping them engaged and satisfied.
Optimization Tips:
Continuous training: Offer regular training sessions and development programs.
Feedback loop: Encourage agents to share feedback and act upon constructive suggestions.
Conclusion
A successful real estate recruitment funnel is more than just attracting potential agents; it’s about guiding them through a journey from awareness to decision, ensuring they feel valued and informed at every stage. By understanding the anatomy of this funnel and optimizing each step, brokerages can ensure they attract and retain the industry’s best talent, setting the stage for sustained growth and success.
Jim Turner is CEO of Brokerkit, a growth platform for brokers.
Redrock cuts its own list of required skills to five and does allude to the need for math – yet in the most casual way. The top skill listed is “working with numbers,” which doesn’t exactly sound like a grasp of abstract algebra or advanced calculus is needed. “While there’s lots more to being a … [Read more…]
[Editor’s Note: Geek Estate Offers are special offers members of the Geek Estate Mastermind]
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When embarking on the exciting journey of buying a new home in Washington, there’s a crucial step that should never be overlooked: the home inspection. A home inspection is a complete assessment of a house’s condition. Whether you’re buying a house in Tacoma or hunting for homes in Spokane, a thorough inspection can mean the difference between a smooth transition into your dream home and unexpected post-purchase challenges. That’s why we reached out to Washington home inspectors to get their best insights. Here’s what they had to say.
Why should you get a home inspection in Washington?
“Every home has its quirks, but some are more consequential than others,” says Isaac McPhee of Strong Foundations Home Inspection. “In any real estate transaction, one of the most important questions is whether the home has any hidden surprises waiting to cost the buyer (or seller) significant amounts of money. Home inspections exist to shine light on the home’s true condition, to limit potential surprises, and to provide peace of mind. As inspectors, we exist to provide peace of mind, and it’s hard to put a price on that.”
Homeowners often overlook seemingly minor cracks and defects. According to Matt Johnson of INW Home Inspection, an experienced home inspector will investigate these further. He adds that around 5% of the time, what may seem like a minor problem, reveals a structural issue.
“A home inspection is the best way to ensure that you have all the information you need to make an informed decision on your prospective home,” says Hunter Taylor of Centurion Home Inspection.
Are there any specialized inspections that Washington buyers should consider?
While a standard home inspection is typically advised for all homebuyers, prudent purchasers take extra care by arranging for specialized home inspections, particularly for older properties or those with unique attributes. Covering everything from the roof to the foundation, there are a variety of specialized inspections worth considering before finalizing your home purchase.
“A thorough home inspection including an infrared scan of the critical areas is essential to understanding the condition of the home you are investing in,” says Gregg Spear of Spear Home Inspection Inc. “Adding a sewer scope can help identify unknown defects in the building sewer line that could become a future problem for you.”
In addition, Gal Zamir of AirGanic recommends getting your insulation inspected. “We highly recommend having a dedicated inspection for Insulation levels throughout the crawl space and Attic and a detailed HVAC system inspection, this will allow you to have a full understanding of your potential home energy consumption and Indoor air quality levels.”
“Consider requesting a separate sewer scope during your home inspection, as it’s not usually included,” says Carmin Dalziel of Dirt Cheap Sewer. “Overlooking sewer problems could lead to significant post-purchase costs. Opting for a camera scope of the sewer system helps you make well-informed decisions before buying.”
Lindsey Smith of Top Notch Home Inspection says that you should choose an inspector with a structural pest inspection license. “Given the state’s climate and potential pest challenges, this license ensures that the inspector is qualified to identify and address any pest-related issues alongside general structural concerns,” Smith says. “This dual expertise will provide you with a comprehensive assessment of the property’s condition, aiding your decision-making process and potentially preventing future financial burdens.”
Are home inspections required in Washington?
In Washington, home inspections are not legally required by the state for the sale of a property. However, they are highly recommended and often considered a prudent step in the home buying process. A thorough inspection can uncover potential issues that might not be evident during a casual walkthrough, helping buyers make informed decisions about the condition of the property.
How much does a home inspection cost in Washington?
The cost of a home inspection in Washington can vary based on factors such as the size of the property, its location, and the specific services offered by the inspector. On average, home inspection costs in Washington typically range from around $200 to $600. It’s important to remember that while cost is a factor, the quality and thoroughness of the inspection are equally important considerations.
Can you sell a house in Washington without an inspection?
Yes, you can sell a house in Washington without a formal inspection being legally mandated. However, it’s worth noting that many buyers in the state often request or expect an inspection as part of the due diligence process. Opting for a pre-sale inspection before listing your home can provide you with a better understanding of its condition, potentially allowing you to address any issues upfront and present the property in a more favorable light to potential buyers.
Tips for getting a home inspection in Washington
“Before a home inspection, it’s essential to invest time in researching reputable and experienced inspectors,” says Liberty Inspection Services. “Check reviews, seek recommendations, and confirm their licensing and certification. Understand that an inspector evaluates visible areas, but hidden issues might demand additional investigation. If feasible, join the inspection to directly comprehend the property’s state and potential concerns.”
Andy Sanchez from Inspect NW says to always make sure your inspector is licensed. “The WA State Dept of Licensing has Standards of Practice set forth for licensed home inspectors. These are guidelines that basically state what inspectors are required to inspect. Also, make sure you attend the inspection if you can. This allows the inspector the opportunity to convey their findings in a manner that you will be able to understand when you are reading the final report. Also, ask questions; if you think of anything concerning to you prior to the inspection write it down.”
“Using a home inspector referred by your broker can present a potential conflict of interest,” says Lawrence Karwoski of Advanced Inspection Services Inc. “While your broker may have good intentions, it’s important to remember that their primary goal is to close the deal, which might influence their recommendation as they typically have experienced many inspectors. To ensure an unbiased inspection and accurate assessment of the property’s condition, it’s generally recommended to find and hire your own independent home inspector. This way, you can be more confident that the inspection report will be impartial and thorough, without any potential pressures or biases that might arise from using a recommended inspector.”
Washington home inspections: the bottom line
Buying a home is a major decision. Before you commit to purchasing your dream home, taking the step to have a thorough Maryland home inspection can provide invaluable peace of mind. By identifying potential issues and ensuring the property’s condition aligns with your expectations, this inspection adds an extra layer of confidence to your investment.
Every time that the Bitcoin price surges, the subsequent flurry of press attention seems to bring in more and more people interested in getting their piece of the Bitcoin pie. While there are multiple ways to make money off Bitcoin, such as investing and mining, trading Bitcoin can be another way to participate in the Bitcoin ecosystem.
Trading is a bit more difficult than just buying some Bitcoin and holding it; however, Bitcoin trading can potentially be very profitable, even for beginner traders that are just starting to learn. Types of Trading There are different types of trading strategies people use when trading Bitcoin.
Day trading is more frequent and involves taking advantage of short-term price movements (throughout the day).
Scalping is even more short-term than normal day trading as it focuses on shorter trading periods. The belief is that by making continuous, small profits throughout the day, one can make more profit in the long-term while mitigating risk from longer-term price swings.
Swing trading can be thought of as “medium-term” trading and involves taking advantage of swings in price cycles. For example, when you think that price is swinging up or down, you buy or sell until you believe that the swing is over.
Margin trading involves trading with borrowed funds. It is only recommended for experienced traders. While margin trading lets you trade with higher amounts (and potentially profit more), it is dangerous because losing money also means having to pay back the lender.
Trading Analysis – Fundamental vs. Technical Traders also perform different types of analysis to determine the best trades.
Fundamental analysis involves looking at the overall crypto market, news about Bitcoin, Bitcoin’s underlying technology, Bitcoin’s team, and so on – these “fundamentals” affect Bitcoin’s value, which thus can be predicted by traders.
Technical analysis bases price predictions more on market statistics, such as past price movements and patterns as well as trading volumes. Believers in technical analysis look for patterns and trends when making trading decisions. It’s not the fundamentals or events that matter as much as what the price action is telling you.
Of course, many traders employ both fundamental and technical analysis in making their trading decisions. Once you’ve carried out enough research and analysis on the Bitcoin market and decided on the type of trading to get involved with, it is high time to move further.
Getting Started with Bitcoin Trading Choose an Exchange There is no official exchange for Bitcoin. Instead, users have to choose one from the many options that are out there. Here are some factors that you should consider when choosing an exchange for trading Bitcoin:
1. Location. Certain exchanges are more popular in different regions. For example, some exchanges are popular amongst traders in Europe mostly, while others can be in high demand among the US citizens. Moreover, exchanges may only be open to citizens of certain countries, which limits your options. 2. Liquidity. Liquidity is also important to consider if you are trading large volumes. The higher the liquidity in the market – the easier you can buy or sell Bitcoin. 3. Fees. Look for exchanges with relatively low fees, especially if you are trading frequently. Most trading platforms base their fees on the taker-maker model. “Maker” is someone who “makes” liquidity by putting an order on the market, such as by placing a sell order. “Taker” takes an order off market, such as by placing a buy order. 4. Trustworthiness. Of course, since you are entrusting these exchanges with actual money, it’s important to find the one that you can rely on. For example, choose exchanges that haven’t been hacked and are reliable during times of peak trading.
One of the platforms that fulfills the above criteria is CEX.IO, a UK-based exchange with over 5 years of operation. In order to start trading at CEX.IO, you need to sign up for the exchange and fund your account with any preferable fiat currency, such as USD, EUR, GBP and so on. There are different ways that you can deposit money to your CEX.IO account – credit card and bank transfer. Once you’ve funded your CEX.IO account, go to the Trading page and make use of the many advanced features that CEX.IO presents.
Study the market and place an order Once you get to the Trading page for your appropriate trading pair (e.g. BTC/EUR), you’ll be presented with a candlestick trading chart, a type of price chart that can be adjusted for different time periods. This is a good way to study a short-term behaviour of traders within the particular platform and predict further market trends.
Next is a market depth chart. Market depth shows supply and demand for Bitcoin at different prices. One side shows demand (the buy or bids side), while the other shows supply (the sell or asks side). Hovering over any single point on the chart will show how many people are willing to buy or sell at a certain price. For example, hovering over a certain point on the bids part of the chart might show that there are 500 bids to buy Bitcoin at $5,000 per BTC. Thus, you could technically sell 500 people some $5,000 BTC.
Basically, this information will be enough to make a balanced decision and proceed to placing an order within the trading platform of your choice. Any trading platform features an order book which lists the current bids and asks for Bitcoin, any active orders you have, and the market’s trade history.
That’s about it! The first steps to Bitcoin trading are taken, though…
Words of Wisdom to the Beginner Traders
“Don’t Leave All Your Funds on the Exchange” Don’t leave all your Bitcoins on an exchange; transfer them to a hardware, desktop, or other form of a more secure Bitcoin wallet. Just leave a small amount on the exchange for further trading.
“Many (or All) Cryptocurrencies Could Fail” Many compare the cryptocurrency to the dot-com bubble, which popped after most investors realized that many early Internet-based companies were worthless. Bitcoin and other cryptocurrencies, too, could suffer from a huge drop in value.
Be sure to take some of your profits off the table eventually unless you are 100% sold on the future of Bitcoin.
“Research Tax Considerations” Other issues that could affect the market include regulation, such as governments taking an anti-Bitcoin stance or imposing tax on Bitcoin trading. Tax considerations for Bitcoin trading are beyond the scope of this article, but still do your own research.
Please note that nothing in this article is meant to be tax advice and is only informational in nature.
Of course, Bitcoin trading is vastly complicated and we’re just scratching the surface. While this guide might have been easy to read, Bitcoin trading isn’t easy. Like anything else, you have to invest time and money to get good at it.
Good luck out there!
Allison Halliday is a Realty Biz News contributing writer. She handles International Real Estate and is a seasoned blogger.
Nestled within the heart of the Lone Star State, Dallas stands as a testament to sophistication and modernity. Within this vibrant Texan city lies a world of luxury homes, each adorned with a distinctive set of features that encapsulate the essence of high-end living. From sleek, modern designs that seamlessly blend with the urban landscape to timeless estates nestled in the tranquil outskirts, Dallas boasts an array of sought-after elements that define the luxury real estate market.
Whether you’re considering living in Dallas or searching for a home in the city, you’ll be captivated by the myriad of amenities and features the luxury market offers. From breathtaking panoramic views to updated kitchens equipped with top-of-the-line appliances, join us as we delve into the world of the most coveted luxury home features in Dallas.
Top neighborhoods with luxury home features in Dallas
Preston Hollow, Highland Park, University Park, Bluffview, and Devonshire are all areas in the Dallas housing market known for their luxury homes with high-end features where homebuyers are willing to pay premium prices.
Highland Park and University Park top the list for most expensive markets, with homes selling for a median price of nearly $3.2 million and $2.7 million, respectively. The high price tag is for good reason as these homes feature meticulously crafted architecture, spacious interiors, and upscale finishes. Tree-lined streets, manicured gardens, and proximity to cultural amenities characterize these exclusive areas, offering a blend of prestige and comfortable sophistication.
Homes in Preston Hollow, known for their sprawling estates, lush landscapes, and architectural grandeur, saw a median sale price of nearly $1.3 million. Bluffview homes, with a median sale price of almost $2 million, exude timeless charm, featuring elegant designs, scenic vistas, and lush surroundings.
1. High-end finishes
High-end finishes are a popular luxury home feature in Dallas. Expect fine marble or hardwood flooring, custom cabinetry, and top-tier appliances in gourmet kitchens. Spa-like bathrooms feature deluxe fixtures, soaking tubs, and spacious walk-in showers. Intricate crown molding and coffered ceilings adorn living spaces, while smart home systems offer advanced automation. Expansive windows invite natural light and reveal manicured outdoor spaces with lavish pools and landscaping. These homes often showcase grand entrances, wine cellars, and entertainment areas, combining upscale materials and meticulous craftsmanship for an unmatched luxurious living experience.
2. Top-of-the-line appliances
Luxury homes in Dallas are adorned with top-of-the-line appliances that redefine culinary excellence. Gourmet kitchens showcase brands like Sub-Zero, Wolf, and Miele, elevating cooking to an art form. Indulge in professional-grade ranges, built-in espresso makers, and wine refrigerators that cater to the connoisseur’s desires.
3. Backyard oasis
You’ll often find that a backyard oasis in Dallas, TX, is a common home feature among luxury homes, often featuring amenities like a resort-style pool with cascading waterfall, soothing spa, and lush landscaping. Alfresco kitchens, fireplaces, and lounges create spaces for leisure and entertaining. High-end finishes, like premium outdoor furniture and artistic lighting, enhance the ambiance. Thoughtful design elements offer privacy, such as elegant pergolas or tall hedges, and the inclusion of natural rock features adds an organic touch, seamlessly blending opulence with nature. This sanctuary goes beyond a typical yard, fostering a seamless connection between indoor and outdoor living, and providing a serene escape from the city’s bustle in a lavish, harmonious setting.
4. Media room
A staple of luxury homes in Dallas, the media room offers an immersive escape into entertainment opulence. Thoughtfully designed for cinematic experiences, it boasts state-of-the-art audiovisual systems, oversized screens, and plush seating, akin to a private theater. Custom acoustic treatments ensure optimal sound quality. Smart technology allows effortless control of lighting, sound, and streaming services. This dedicated space goes beyond mere movie nights, offering a haven for sports enthusiasts and gaming aficionados. The media room encapsulates the modern definition of leisure, inviting residents to revel in high-end comfort and endless entertainment possibilities within the confines of their prestigious Dallas abode.
5. Smart home features
Smart home technology is a popular luxury home feature because it provides homeowners with a sense of convenience and security. A state-of-the-art smart security system, complete with remote-access cameras, provides peace of mind through real-time monitoring and control, ensuring the safety of the residence even from afar.
Heated floors epitomize comfort and luxury, offering a warm embrace during chillier months. A personalized coffee bar adds a touch of everyday indulgence, allowing residents to start their day with bespoke brews tailored to their preferences.
These features reflect a lifestyle that seamlessly integrates technology into the fabric of daily life, enhancing comfort and efficiency. The ability to manage security, climate, and amenities remotely through intuitive interfaces elevates the living experience.
6. Location
For luxury homeowners, location is paramount. Proximity to cultural hotspots, fine dining, and premium amenities is essential for providing the convenience homebuyers are willing to pay premium prices for. Large lots offer seclusion and the potential for personalized outdoor sanctuaries, complementing opulent interiors. These factors harmonize to create a refined environment that not only showcases the residence itself but also extends a sense of community and the promise of lasting value in the competitive realm of luxury real estate in Dallas.
7. Landscaped grounds
Luxury homes in Dallas boast captivating views of meticulously landscaped grounds, where nature becomes a living masterpiece. Expansive windows frame scenes of lush gardens, serene water features, and manicured lawns, seamlessly merging indoor and outdoor aesthetics. These vistas not only infuse each space with natural beauty but also offer a sense of tranquility and connection to the environment. Whether enjoyed from the comfort of elegant living areas or from private terraces, these stellar views accentuate the opulent living experience.
Luxury home features in Dallas: final thoughts
These exceptional features stand as testament to a lifestyle where elegance, innovation, and comfort are woven together seamlessly. From media rooms that transport you to cinematic realms to backyard oasis that merge nature’s beauty with architectural brilliance, these luxury home features enhance the lifestyle and elevate the experience of homeownership.
If you’re in the market for a luxury home, your Redfin Premier agent is equipped to offer valuable insights into the local market, including insight into the neighborhoods, highly sought-after amenities, pricing trends, and available luxury properties.
Just as every corner of the U.S. boasts its distinct charm, it also presents a unique set of challenges for potential homeowners. Whether you’re eyeing a home off the warm shores of Orlando, Florida, and the potential of underlying damage from hurricane seasons, or setting your sights in a picturesque house in Katy, Texas, where foundational concerns often take the spotlight, being well-prepared is paramount.
Navigating the realm of home buying can be both exciting and daunting, especially when it comes to the Lone Star State. Before taking the plunge into homeownership, one essential step that can’t be overlooked is a comprehensive home inspection. Consulting with seasoned professionals who are well-versed in the region’s nuances is key to understanding the potential pitfalls that may lie ahead. In Texas, a state known for its diverse geography and climate, home inspectors have encountered a range of issues that warrant careful consideration. In this Redfin article, we delve into some crucial tips and aspects to watch out for when it comes to a home inspection in the vast expanse of Texas. From foundation worries to pest problems, here are five things to look out for to help you safeguard your investment in the Lone Star State.
1. Cracking soil
“Cracking soil is a big problem in the Summer because the dry environment is impacting foundations. The expansive soils along the coastal region can expand and contract as much as 10%. That may not seem like much until you look at the entire footprint of the house: 10% can cause soil separation and structural damage,” warns Grace Home Inspection Services
“However, don’t start by calling a foundation repair contractor. The first thing you should do is carefully water your foundation. Many of the problems may be eliminated by this alone. After the return of rain and the saturating of the parched soils, you may find it worthwhile to continue watering while monitoring your foundation and the house for changes.”
Courtesy of Grace Home Inspection Services
2. Mold and rot
“The most, or rather the easiest thing, is to just use your nose. Things like wood rot have a very distinctive smell, and mold also has a very distinctive smell. Once you know those smells, you can identify wood rot the moment you put your head in a crawlspace. It’s at that moment you just have to figure out where it is,” says Advanced Home Inspections. “Additionally, the most common place where we find water damage is where decks are attached to the house. So, it’s always a good idea to keep an eye on that area, knowing that it’s a potential failure point.”
3. Weather changes and pest problems
“Weather conditions like hurricanes and flooding directly impact our region. Coastal homes face higher risks due to their proximity to the coast. We inspect for signs of previous flooding and assess wind-rated certifications in certain counties,” shares Before You Buy Inspection Services.
“Periodic flooding is a reality we deal with. While most flooded homes are properly restored, it’s worth noting that some opportunistic and less reputable companies tend to surface after natural disasters, providing subpar quality in their repairs.
Pest infestations and termite damage, prevalent in our Gulf Coast area as well, warrant specialized inspections. Leaks and indications of insects should be addressed.”
Courtesy of Before You Buy Inspection Services
4. Foundation issues
“Living in the Gulf Coast Area of Texas comes with its own set of challenges, and among them, foundation problems and termite infestations stand out. Our unique soil and climate conditions create an environment that’s conducive to the development of these issues,” notes AM Solutions LLC.
“One unmistakable sign of potential foundation problems is the separation along the brick veneer expansion joint. Similarly, a termite tube—typically found on the foundation grade beam—serves as an indicator of potential termite infestation. These signs are crucial and require further evaluation by either a Licensed Structural Engineer or a Licensed Pest Operator before making any purchasing decisions.”
Courtesy of AM Solutions LLC
5. Identifying water damage
“Given the high humidity levels, floods, and occasional severe freezes such as those experienced in February 2021 that led to burst pipes, being aware of mold damage is of utmost importance, often remaining concealed,” recommends Dunn Inspection Services.
“Our examination includes an assessment of the exterior foundation. If the footing is low or the soil is high, and if the grade exceeds the siding or bricks, there’s a strong likelihood that mold is present within the structure. Additionally, termite damage is highly probable in such cases. In older homes, deteriorated moisture barriers in perimeter walls are common. We meticulously search for indicators like texture alterations, warped molding, and water stains on interior walls.
Modern residences with energy-efficient systems, such as sprayed insulation in attics and high-efficiency HVAC systems, can inadvertently foster conditions conducive to mold growth. I pay close attention to elevated humidity levels in these conditioned attic spaces and watch for telltale signs, like components of the HVAC system or ductwork showing rust. Inspect furnace filters closely and check the interior of the return for any signs of water marks or stains.
Always bear in mind that mold spores are both invisible and potentially toxic. While inspecting the property, rely on your sense of smell. Is there a musty odor? Do you notice an excessive number of air fresheners?
For peace of mind and to safeguard your family’s health, the wisest course of action is to engage a licensed and qualified consultant to conduct air quality testing for hidden mold before making a purchase.”
Betterment and Betterment are not only two of the most popular robo advisors in the industry, but they may very well be the most innovative in the field. Though they represent two of the first robo advisors, both have built out their platforms and now offer robust portfolio options and other services to their clients.
Though they each have their own nuances–and specializations–you really can’t go wrong with either platform. Each will take complete control of your portfolio, managing every aspect of it for a very low annual fee. When you sign up with either service, your only responsibility will be to fund your account on a regular basis.
But what if you’re either new to robo advisors or you’re considering a switch from another one? If you’re researching robo advisors, the information will inevitably lead to Betterment and Wealthfront. So let’s take a look at the two heavyweights in the robo advisor space and see which might be a better fit for your portfolio. Listen to the Podcast of this Article
About Betterment
Betterment is not only the original robo advisor, but its also the largest independent robo (along with Wealthfront), with $21 billion in assets under management. The company is based in New York City and began operations in 2008.
As a robo advisor, Betterment is an automated, online investment platform that handles all aspects of investment management for you. When you sign up for the service, you complete a questionnaire that will help determine your investment goals, time horizon, and investment risk tolerance. From that information, Betterment creates a portfolio of stocks and bonds to meet your investor profile.
They dont actually invest your money in individual securities, but instead through exchange-traded funds (ETFs), each representing a specific asset class. They can build an entire portfolio for you through about a dozen funds that will give you exposure to the entire global financial markets.
All this is done for a low annual management fee. Your only responsibility will be to fund that your account on a regular basis and let Betterment handle all the management details for you.
Better Business Bureau rates Betterment as A+, which is the highest rating in a range from A+ to F. The company also scores 4.8 stars out of 5 by more than 20,000 users on the App Store, and 4.5 stars out of 5 by more than 4,500 users on Google Play.
About Wealthfront
Wealthfront is, with Betterment, the largest independent robo advisor, and Betterment’s primary competitor. In fact, with over $24 billion in assets under management, its now slightly larger than Betterment. The company is based in Redwood City, California, and launched operations in 2011.
As a robo advisor, it works much the same as Betterment, creating a portfolio for you based on your answers to a questionnaire when you open your account. Wealthfront will also manage your account using a small number of ETFs spread across various asset classes. But on larger accounts, they’ll also add individual stocks to get greater benefit from tax-loss harvesting.
Like Betterment and virtually all robo advisors, Wealthfronts basic investment strategy is based on Modern Portfolio Theory (MPT), which emphasizes asset allocation over individual security selection.
Similar to Betterment, and really all robo advisors, your account will receive full investment management for a very low annual fee. Your only responsibility will be to fund your account on a regular basis.
Unfortunately, Wealthfront has a Better Business Bureau rating of F, due to unanswered complaints. However, the company gets 4.9 stars out of 5 from more than 9,000 users on the App Store, and 4.8 stars out of 5 by more than 2,700 users on Google Play.
Investment Strategies Betterment vs Wealthfront
Betterment Investment Strategy
Betterment offers two plan levels, Digital and Premium. Premium is available for minimum account balances of $100,000, while Digital is open to all account balances. Like many robo advisors, Betterment has evolved past building and managing a basic portfolio comprised of a mix of stocks and bonds.
For example, if you choose the Premium Plan, you’ll have access to live financial advisors. But there are many other services and plans to choose from.
Read More: Betterment Promotions
Basic portfolio mix
Your portfolio will be invested in as many as six stock asset classes/ETFs and eight bond asset classes/EFTs.
Stocks:
US Total Stock Market
US Value Stocks Large Cap
US Value Stocks Mid Cap
US Value Stocks Small Cap
International Developed Markets Stocks
International Emerging Markets Stocks
Bonds:
US High-quality Bonds
US Municipal Bonds
US Inflation-Protected Bonds
US High-Yield Corporate Bonds
US Short-term Treasury Bonds
US Short-term Investment-Grade Bonds
International Developed Markets Bonds
International Emerging Markets Bonds
Use of value stocks
Notice that three of the six stock asset classes involve value stocks. This is a specialization of Betterment and represents a time-honored stock market investment strategy. Value stocks are investments in companies with stock prices that are low in relation to their competitors by various standard measurements. But the companies are deemed to be fundamentally sound, and therefore likely to outperform the general market once the investment community realizes the true value of the stocks.
In this way, Betterment makes an attempt to outperform the general market, such as the S&P 500 or even some broader indices.
Smart Beta
This is another investment strategy Betterment uses with the potential to outperform the general market. This specific portfolio is managed by Goldman Sachs. Smart Beta is a form of active portfolio management, which seeks high-quality companies with low volatility, strong momentum, and good value.
Since its a higher risk/high reward type of investing, it requires a minimum portfolio of $100,000.
Socially responsible investing (SRI)
This is an investment option increasingly being offered by robo advisors. However, with Betterment only a portion of your portfolio will be invested in SRI. They replace the ETFs in the International Emerging Market Stocks and US Value Stocks Large Cap with ETFs that specialize in socially responsible investing in those sectors.
Learn More: The Pros and Cons of Socially Responsible Investing
Flexible Portfolios
If you want more control over your investment portfolio, you can choose this option. It allows you to adjust the individual asset class weights in your portfolio allocation. Its also designed for more advanced investors and gives you an opportunity to increase allocations in asset classes you believe are likely to outperform the market.
BlackRock Target Income
For investors looking for income and safety of principal, Betterment offers this portfolio, which consists of 100% of bonds. There is some risk of principal in this portfolio but it’s designed to be minimal. You can even choose the level of risk and return you want. It won’t provide the type of long-term gains you’ll get from a stock portfolio, but it will offer the kind of steady income that will work especially well for retirees.
Tax-loss Harvesting
Tax-loss harvesting is a year-end strategy in which asset classes with losses are sold (and later replaced with comparable ones) to offset gains in winning asset classes. The strategy helps to defer taxable capital gains on growing asset classes.
Betterment makes this strategy available on all account balances. However, it’s only offered on taxable accounts since it’s completely unnecessary for tax-sheltered retirement plans.
Betterment Everyday Cash Reserve
If you’re looking to add a cash option to your investment portfolio, you can do it through Betterment Cash Reserve. The account is eligible for FDIC insurance up to $1 million. The minimum deposit is $10, and offers unlimited transfers, both in and out of your account.
Betterment Checking
The Betterment Checking account gives you the flexibility to manage your money in a way that best fits your financial goals. You’ll get this account with a debit card and you can use it to pay in person or online. You’ll also get FDIC insurance on your money.
The Betterment Checking account is an innovative way to manage your money. It’s faster, more secure, and requires zero minimum balance requirements. You can now deposit checks using their streamlined mobile app. Just take a picture and deposit checks will be there for you on the other side.
Wealthfront Investment Strategy
Unlike Betterment, Wealthfront has a single plan for all investors, with an annual management fee of 0.25% on all account balances. And like Betterment, Wealthfront has expanded its investment options menu in many different directions.
Basic Portfolio Mix
Wealthfront uses 11 asset classes in the construction of its portfolios, including four stock funds, five bond funds, plus real estate and natural resources.
The allocation looks like this:
Stocks:
US Stocks
Foreign Stocks
Emerging Market Stocks
Dividend Stocks
Bonds:
Treasury Inflation-Protected Securities (TIPS)
Municipal Bonds (on taxable investment accounts only)
Corporate Bonds
U.S. Government Bonds
Emerging Market Bonds
Alternatives:
Real Estate
Natural Resources
Use of Alternative Investments
Wealthfront includes real estate and natural resources in its portfolio composition. The real estate sector invests in companies that provide exposure to commercial property, apartment complexes, and retail space. Natural resources are held in ETFs representing that sector.
The combination of the two offers a stronger diversification away from a portfolio comprised entirely of stocks and bonds, largely because they offer protection in an inflationary environment. It’s possible for these sectors to perform well when the general financial markets are not.
Smart Beta
The Smart Beta option attempts to outperform the general financial markets. The strategy deemphasizes market capitalization in the creation of a portfolio. For example, rather than using the capitalization allocations of certain companies within the S&P 500, the strategy might increase some allocations and decrease others. It’s more of an active investment strategy and requires a minimum investment portfolio of $500,000.
Wealthfront Risk Parity
This is another investment strategy for investors with larger accounts and a greater appetite for risk. Its been shown to provide higher long-term returns, but it may use leverage to increase those returns.
Stock-level Tax-loss Harvesting
Tax-loss harvesting is available on all taxable investment accounts. But Stock-level Tax-loss Harvesting is available to larger accounts to provide more aggressive tax deferral.
This is a fairly complex investment strategy, but it involves the use of individual stocks to take greater advantage of tax-loss harvesting. The use of individual stocks will make it easier to buy and sell securities to minimize capital gains taxes. Depending on the specific plan, the required minimum investment ranges between $100,000 and $500,000.
Wealthfront Path
This is a software-based financial advisory, providing you with financial planning tools. They can help you plan for retirement or saving for the down payment on a house or a college education for one or more of your children. The apps run what-if scenarios, that can make projections based on various savings levels for each of your specific goals.
Though it doesn’t offer live financial advice, the service is free to use.
Wealthfront Cash
You can open an interest-bearing cash account with Wealthfront Cash Account with just $1. There’s no market risk, no fees, unlimited free transfers, and your account is FDIC insured for up to $5 million. The account currently pays 4.30% APY and provides a safe, cash investment to go with your stock portfolios.
And now, Wealthfront Cash allows you to get your paycheck up to two days early when you set up a direct deposit. They’ve also implemented the ability for you to invest directly into the market within minutes, straight from your Wealthfront Cash account. That means you can get paid early and immediately invest – giving you about extra days of investing each year.
Read more: Wealthfront Cash Account review
Wealthfront Portfolio Line of Credit
Much like a home equity line of credit, the Wealthfront Portfolio Line of Credit is secured by your investment account. You can borrow up to 30% of the value of your account for any purpose. There’s no prequalification since the line of credit is completely secured by your investment account.
The line of credit is automatic if you have a non-retirement account balance of at least $25,000. You can request funds against the line on your smartphone and receive them in as little as one business day.
Current interest rates paid on the line range between 2.45% and 3.70% APR, depending on the size of your account.
Retirement Planning Betterment vs. Wealthfront
One of the most common uses of robo advisors is the management of retirement accounts. Both Betterment and Wealthfront can manage all types of IRA accounts, similar to the way they do with taxable accounts. But each also offers some level of retirement planning.
Read More: Best Robo Advisors Find out which one matches your investment needs.
Betterment Retirement Planning
Betterment is strong in this category because in addition to their regular portfolios, they also offer income-specific investment options, like their BlackRock Target Income and Everyday Cash Reserve. The Target Income option in particular focuses on maximizing interest income, which is exactly what most people are looking for in retirement.
One of the advantages Betterment offers is that you can connect your 401(k) with your investment account. Betterment cant manage the 401(k) (unless chosen to do so by your employer through their 401(k) management plan), but they can coordinate your Betterment retirement account(s) with the activity in your employer plan.
And of course, if you have at least $100,000 in your Betterment account, you can enroll in the Premium plan and have access to live financial advisors.
But Betterment also offers its Retirement Savings Calculator to help you know if you’re on track for your retirement. By answering just four questions, they’ll be able to determine if your current retirement plan will provide the income you’ll need in retirement, taking your projected Social Security income into consideration. If it isn’t, it’ll let you know how much more you need to invest on a regular basis.
Wealthfront Retirement Planning
You can take advantage of Wealthfront Path to help you with retirement planning. You’ll start by linking your financial accounts so the program can get a better understanding of your finances. Recommendations to help you reach your goals are made based on the amount of regular contributions you’re making and the income you will need in retirement.
Path will analyze your spending patterns, your average annual savings rate, the interest you’re earning on those savings, as well as your investment and retirement contributions. It will also analyze the fees you’re paying on your investment and retirement accounts. Loan accounts are analyzed as well.
The information is assembled, and future projections are made. You’ll be given advice on any needed increases in savings for retirement contributions, as well as asset allocations. And perhaps best of all, since all your financial accounts are linked to the service, it will provide continuous updates on your progress toward your retirement goals.
Betterment Pros & Cons
No minimum initial investment or account balance requirement.
Reduced fee structure on larger account balances.
Use of value stocks seeks to outperform the general market.
Unlimited access to certified financial planners on account balances over $100,000.
Comprehensive retirement planning package.
Limited investment diversification, excluding alternative asset classes, like real estate and natural resources.
The annual management fee rises from 0.25% to 0.40% if you select the Premium plan.
The reduced fee structure on large account balances doesn’t kick in until you reach a minimum of $2 million.
Wealthfront Pros & Cons
Your account includes alternative investments, like real estate and natural resources. This offers greater diversification than a portfolio invested only in stocks and bonds.
The minimum initial investment is just $500. That’s not zero, but it’s an amount most small investors can comfortably start with.
Flat-rate fee of 0.25% on all account balances.
Larger accounts get the benefit of more efficient tax-loss harvesting strategies through Wealthfront Risk Parity.
The Wealthfront Portfolio Line of Credit lets you borrow up to 30% of the value of your non-retirement accounts at very low interest and with no credit check.
There’s no reduced management fee for larger account balances.
The retirement planning tool (Path) is an automated system and does not provide advice from live financial advisors.
Poor rating from the Better Business Bureau.
Bottom Line
We’ve covered a lot of territory and details in this side-by-side comparison of Betterment vs Wealthfront. The summary table below should help you to be able to compare the various services each offers with a quick glance.
Category
Betterment
Wealthfront
Minimum initial investment
Digital: $0 Premium: $100,000
$500
Promotions
Up To 1 Year Free
First $5,000 Managed Free
Management fees
Digital: 0.25% up to $2 million, then 0.15% above Premium: 0.40% to $2 million, then 0.30%
0.25%
Available accounts
Individual and joint taxable accounts; traditional, Roth, rollover and SEP IRAs; trusts and nonprofit accounts
Individual and joint taxable accounts; traditional, Roth, rollover and SEP IRAs; trusts and 529 accounts
Rebalancing
Yes
Yes
Dividend reinvestment
Yes
Yes
Tax-loss harvesting – on taxable accounts only
Yes
Yes
Socially-responsible investing
Yes
Available through Smart Beta ($500,000 minimum) and Stock-level Tax-Loss Harvesting ($100,000 minimum)
Smart Beta investing
Yes
Yes, minimum $500,000
Interest bearing cash account
Yes
Yes
Line of credit
No
Yes
Financial advice
Yes, on Premium Plan only
Automated only
Mobile app
Yes
Yes
Customer service
Phone and email, Monday through Friday, 9:00 am to 6:00 pm Eastern time
Phone and email, Monday through Friday, 10:00 am to 8:00 pm Eastern time
You’ve probably already guessed were not declaring a winner between these two popular roboadvisors. Both are first rate and you can’t go wrong with either. More than anything, your decision will likely come down to specific details–what features and benefits one offers that better suits your own personal preferences and investment style.
But one advantage that’s undeniable with both Betterment and Wealthfront is that not only is each a first-rate service, but they provide enough investment options and related services that they can accommodate your growing financial capabilities and needs well into the future.
For example, while you may start out with a basic managed portfolio, you’ll eventually want to get into higher risk/higher reward options as your wealth grows. As well, you’ll like the flexibility of having high-interest cash investment options, as well as low-cost or free financial or retirement advice.
We like both these services and are certain you can’t go wrong with whichever one you choose.
Betterment Cash Reserve Disclosure – Betterment Cash Reserve (“Cash Reserve”) is offered by Betterment LLC. Clients of Betterment LLC participate in Cash Reserve through their brokerage account held at Betterment Securities. Neither Betterment LLC nor any of its affiliates is a bank. Through Cash Reserve, clients’ funds are deposited into one or more banks (“Program Banks“) where the funds earn a variable interest rate and are eligible for FDIC insurance. Cash Reserve provides Betterment clients with the opportunity to earn interest on cash intended to purchase securities through Betterment LLC and Betterment Securities. Cash Reserve should not be viewed as a long-term investment option.
Funds held in your brokerage accounts are not FDIC‐insured but are protected by SIPC. Funds in transit to or from Program Banks are generally not FDIC‐insured but are protected by SIPC, except when those funds are held in a sweep account following a deposit or prior to a withdrawal, at which time funds are eligible for FDIC insurance but are not protected by SIPC. See Betterment Client Agreements for further details. Funds deposited into Cash Reserve are eligible for up to $1,000,000.00 (or $2,000,000.00 for joint accounts) of FDIC insurance once the funds reach one or more Program Banks (up to $250,000 for each insurable capacity—e.g., individual or joint—at up to four Program Banks). Even if there are more than four Program Banks, clients will not necessarily have deposits allocated in a manner that will provide FDIC insurance above $1,000,000.00 (or $2,000,000.00 for joint accounts). The FDIC calculates the insurance limits based on all accounts held in the same insurable capacity at a bank, not just cash in Cash Reserve. If clients elect to exclude one or more Program Banks from receiving deposits the amount of FDIC insurance available through Cash Reserve may be lower. Clients are responsible for monitoring their total assets at each Program Bank, including existing deposits held at Program Banks outside of Cash Reserve, to ensure FDIC insurance limits are not exceeded, which could result in some funds being uninsured. For more information on FDIC insurance please visit www.FDIC.gov. Deposits held in Program Banks are not protected by SIPC. For more information see the full terms and conditions and Betterment LLC’s Form ADV Part II.
DoughRoller receives cash compensation from Wealthfront Advisers LLC (“Wealthfront Advisers”) for each new client that applies for a Wealthfront Automated Investing Account through our links. This creates an incentive that results in a material conflict of interest. DoughRoller is not a Wealthfront Advisers client, and this is a paid endorsement. More information is available via our links to Wealthfront Advisers.
Brokerages often have promotions for new account sign ups. Most also have commission free trades and a full spectrum of investment options.
Depending on how much you have to invest you could get a bonus up to $10,000.
Best Brokerage Promotions
M1 Finance – Earn Up to $10,000
M1 Finance will give you up to $10,000 for opening an investment account. Your bonus amount depends on the amount you deposit.
A deposit of $50,000 – $249,999 will get you a bonus of $250
A deposit of $250,000 – $499,999 will get you a bonus of $1,000
A deposit of $500,000 – $999,999 will get you a bonus of $2,000
A deposit of $1,000,000 – $1,999,999 will get you a bonus of $4,000
A deposit of $2,000,000+ will get you a bonus of $10,000
Unlike a lot of brokers on this list, retirement accounts are not included in this promotion.
M1 Finance uses preset portfolios known as “pies.” You can choose premade pies or you can set up your own. Each investment of the pie is set a percentage of your portfolio and as investments are made to the account they are distributed based on asset allocation. So, if one of your “slices” is less than the preset your new investment will buy more of that slice to bring it up to its appropriate percentage allocation.
Offer ends 3/31/2023
Get started with M1 Finance here. Or read our full review of M1 Finance.
E*trade – Earn Up to $3,500
With E*Trade new customers can earn up to $3,500 depending on how much you have to deposit. To qualify, you must make the deposit within 60 days of opening the account and use promo code BONUS23.
A deposit of $5,000 – $19,999 will get you a bonus of $50
A deposit of $20,000 – $49,999 will get you a bonus of $100
A deposit of $50,000 – $99,999 will get you a bonus of $200
A deposit of $100,000 – $199,999 will get you a bonus of $300
A deposit of $200,000 – $499,999 will get you a bonus of $600
A deposit of $500,000 – $999,999 will get you a bonus of $1,200
A deposit of $1,000,000 – $1,499,999 will get you a bonus of $2,500
A deposit of $1,500,000+ will get you a bonus of $3,500
Existing customers can also get in on the action.
A deposit of $500,000 – $999,999 will get you a bonus of $600
E*Trade doesn’t have any account minimums to open or account maintenance fees. They also have $0 commissions for online domestic stocks, ETFs, and mutual funds. There is a fee for options that is between 50 and 65 cents depending on your trading volume. Bonds are $1 and futures are $1.50.
Offer ends 4/18/2023
Get started with E*Trade here. Or read our full review of E*Trade.
Charles Schwab – Earn Up to $1,000
Charles Schwab will give you up to $1,000 for opening a new investing account. The catch is that you’ll need to be referred to Schwab by a current client. If you know someone who is already using Schwab they will need to send you a link you can use that will qualify you for the bonus.
Also, how big your bonus will be depends on how much you deposit into the account.
A deposit of $25,000– $49,999 will get you a bonus of $100
A deposit of $50,000 – $99,999 will get you a bonus of $300
A deposit of $100,000 – $499,999 will get you a bonus of $500
A deposit of $500,000+ will get you a bonus of $1,000
To receive the offer you will need to make the deposit to the account within 45 days of account opening.
Charles Schwab has $0 commission online trades for stocks and ETFs. Options are 65 cents per contract. There are no account minimums to open but you’ll need to deposit at least $25,000 to receive a bonus.
Get started with Charles Schwab here. Or read our full review of Charles Schwab.
JP Morgan Self-Directed Investing – Earn Up to $700
You can get up to $700 by opening a self-directed brokerage account with JP Morgan. How much you’ll receive depends on how much you deposit into the account:
A deposit of $10,000 – $24,999 will get you a bonus of $50
A deposit of $25,000 – $99,999 will get you a bonus of $150
A deposit of $100,000 – $249,999 will get you a bonus of $325
A deposit of $250,000+ will get you a bonus of $700
You will have to fund the account within 45 days of opening and keep the account funded for 90 days to qualify. The money needs to be “new” to JP Morgan and Chase to qualify.
You can open a taxable investment account or either a Traditional or Roth IRA.
JP Morgan offers commission-free online trades and a wide variety of investments including stocks, ETFs, mutual funds. They also offer options which are charged 65 cents per contract.
Offer ends 4/13/2023
INVESTMENT AND INSURANCE PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
Get started with JP Morgan here.
Merrill Edge – Earn Up to $600
At Merrill Edge you can get up to $600 by opening a new self-directed brokerage account or IRA. The amount of your bonus depends on how much you deposit into the account.
A deposit of $20,000 – $49,999 will get you a bonus of $100
A deposit of $50,000 – $99,999 will get you a bonus of $150
A deposit of $100,000 – $199,999 will get you a bonus of $250
A deposit of $200,000+ will get you a bonus of $600
To receive your bonus, you’ll need to make your deposit within 45 days of account opening and then maintain that balance for at least 90 days. The money you deposit has to be “new” money to Merrill Edge which includes money that is currently with Bank of America or a 401(k) that is currently managed by Merrill Edge.
Merrill Edge has $0 stock and ETF trades. Options are 65 cents per contract.
Also, funds in your Merrill Edge account go towards your status as a Bank of America Preferred Rewards member, which gives you preferred pricing on many of their products. You can learn more about the Preferred Rewards program here.
Get started with Merrill Edge here. Or read our full review of Merrill Edge.
Fidelity Investments – Earn $100
With the Fidelity you can earn $100 just by depositing $50 within 15 days of opening the account. Use code FIDELITY100 when signing up to qualify.
There are five account options included in this promotion.
The Fidelity Account
The Fidelity Account is Fidelity’s brokerage account. There are $0 commissions for online US stock, ETF, and option trades.
Investment choices include both domestic and international stocks, ETFs, options, over 3,700 mutual funds, bonds, CDs, and precious metals. It even allows margin borrowing and extended trading hours.
The vast majority of Fidelity’s mutual funds do not have any transaction fees and they even offer a few funds that have no fees at all, not even management fees. These fee-free funds are called Fidelity ZERO funds.
You can also buy fractional shares in your brokerage account. This is a great feature for those who want to own a piece of a company but don’t have the funds to buy a whole share.
Fidelity Cash Management Account
The Fidelity Cash Management Account works similar to a checking account but it keeps the funds in your Fidelity account for easy access when you are ready to invest.
Your funds are FDIC insured and you can access them all the ways you would normally use your money in checking account, including debit card, online bill pay, paper checks, and online transfers.
Your balance also earns a competitive interest rate so it will work as a savings account as well.
Fidelity Starter Pack
The Fidelity Starter Pack comes with both The Fidelity Account and the Fidelity Cash Management Account.
Neither account has fees or minimum balances to open, keep in mind to get the $100 bonus you’ll need to deposit $50 within the first 15 days.
In the brokerage account there are $0 commission for online US stock, ETF, and option trades. The cash management account is similar to a checking account, the cash is available for easy investing but it is also available for easy spending and is FDIC insured.
Traditional and Roth IRAs
Both Traditional and Roth IRA’s also qualify for the $100 promotion. These are both retirement accounts, but they are taxed slightly differently. When you make contributions to a Roth you contribute after tax money, meaning you don’t get a tax break when you contribute, but you can make tax free withdrawals. So, your money grows tax free.
With a Traditional IRA you make pre-tax contributions but are taxed on all the money when you withdraw in retirement.
Within these accounts you will have access to the full suite of investments offered through Fidelity.
Here’s more information about how IRAs work.
Get started with Fidelity here. Or read our full review of Fidelity here.
Webull – Earn Up to 12 Free Fractional Shares
You can earn two free fractional shares just by opening a Webull brokerage account. Then deposit any amount of money into the account for an additional ten free fractional shares.
Which shares you get will be determined at random, but all companies are listed on the NYSE or NASDAQ and have at least $20 billion capitalization and have share prices between $3 and $3,000. You will most likely receive between $3 and $30 worth of stock. Once the shares are issued you have 30 days to claim them.
Webull offers commission-free trades and no minimum deposit is required to open an account – although you will need to make a deposit to qualify for your bonus. They offer fractional shares, crypto, ETFs, options, OTC, and paper trading.
Offer ends 3/31/2023.
Get started with Webull here. Or read our full Webull review.
Robinhood – Earn Up to $200 in Free Stock (But Probably $5)
With Robinhood you can earn a free stock by opening an investment account and linking your bank account.
Once you are set up you will receive a “specified amount” that you can use to choose a fractional share of from a list of 20 S&P 500 companies. Your bonus amount will range between $5 and $200 — but most likely between $5 and $10.
New Robinhood customers are eligible, but existing customers can also claim the bonus if they refer a new customer to Robinhood. You can sell the free stock after three days but you can’t withdraw the cash for 30 days. You can use it to reinvest in something else if you’d like.
Robinhood’s key feature is no fees. They don’t even have fees on options which most brokerages charge for. Robinhood offers stocks, ETFs, crypto, and trading on margin.
Get started with Robinhood here. Or read our full review of Robinhood.
Betterment – Up to One Year Free
Betterment is a popular robo advisor offering up to one year free depending on how much you deposit into your new account.
A deposit of $15,000 – $99,000 will get you 1 month free
A deposit of $100,000 – $249,999 will get you a bonus of 6 months free
A deposit of $250,000 will get you a bonus of 1 year free
You must deposit the funds within one month of account opening; does not apply to crypto.
So, in order to get the full year free, you have to deposit at least $250,000 to your account. However, that’s a substantial savings when you consider even the 0.25% annual management fee.
Get started with Betterment here. Or read our full review of Betterment.
What is a Brokerage Account?
A brokerage account is a type of investment account that allows individuals to buy and sell various securities, such as stocks, bonds, mutual funds, exchange-traded funds (ETFs), options, and more. The account is managed by a brokerage firm or financial institution, which acts as an intermediary between the investor and the securities markets.
When an investor opens a brokerage account, they deposit funds into the account, which they can then use to buy securities. The brokerage firm will typically charge fees for each transaction made in the account, which can include commissions, fees for account maintenance, and other charges.
Brokerage accounts can offer a range of features and benefits depending on the firm or institution that manages them. For example, some accounts may provide access to research and analysis tools to help investors make informed investment decisions, while others may offer margin trading, which allows investors to borrow funds to make larger trades.
How to Choose a Brokerage Firm
Choosing a brokerage firm or platform that meets your needs can be an important decision when it comes to managing your investments. Here are some factors to consider when choosing a brokerage firm or platform:
Fees: Look for a firm that charges competitive fees for trades, account maintenance, and other services. Some firms may offer commission-free trades, which can be an attractive option for frequent traders.
Investment products: Consider the range of investment products offered by the firm, including stocks, bonds, ETFs, mutual funds, and other securities. Make sure the firm offers the products you want to invest in.
Research and tools: Look for a firm that provides access to research and analysis tools to help you make informed investment decisions. These tools may include market data, stock analysis, financial news, and more.
Trading platform: Consider the trading platform provided by the firm, including its ease of use, features, and functionality. Some platforms may offer advanced tools and customization options, while others may be more streamlined and user-friendly.
Customer support: Look for a firm that provides responsive and helpful customer support, whether it’s through phone, email, or live chat. Make sure the firm has a good reputation for resolving issues quickly and efficiently.
Security: Consider the security measures taken by the firm to protect your account and personal information, such as two-factor authentication, encryption, and other security features.
All the platforms in this article are reputable, safe, and have low fees.
What is the Minimum Deposit to Open a Brokerage Account?
The minimum deposit required to open a brokerage account can vary depending on the brokerage firm or platform you choose. Some firms may not require a minimum deposit at all, while others may require several thousand dollars or more.
In general, discount brokers and online platforms tend to have lower minimum deposit requirements than full-service brokers.
Also, keep in mind that to receive the brokerage account bonus, you will have to meet the minimum deposit requirements. While there may not a minimum deposit required to open the account, there will be one to qualify for the bonus.
Are Brokerage Account Bonuses Taxable?
Yes, brokerage account bonuses are generally considered taxable income and must be reported on your tax return. Make sure to consult with a tax professional to understand the tax implications of any brokerage account bonuses you receive.
Final Thoughts
Choosing a place to invest your money is going to depend on a variety of factors including how much money you have to invest, how much investing experience you have and the type of investments you are looking for. You want to make sure your choice is the best fit for your financial situation so be sure to check out our list of Best Online Discount Brokers for 2023 for additional options.
Robo-advisors have barely been around for 10 years, but in the past couple of years several have been steadily expanding their investment menus, and even offering valuable add-on services. One of the leaders in this regard is Wealthfront. The robo-advisor has been growing its investment capability in every direction but is now even offering financial planning. The platform now bills itself as offering High-Interest Cash, Financial Planning & Robo-Investing for Millennials. If you’re looking for more than just investing, Wealthfront has it. And as has become their trademark, it’s all available at a low cost.
What is Wealthfront?
Based in Palo Alto, California, and founded in 2011, Wealthfront has about $25 billion in assets under management. It’s the second-largest independent robo-advisor, after Betterment. And while dozens of robo-advisors have arrived in recent years, Wealthfront stands out as one of the very best. There isn’t any one thing Wealthfront does especially well, but many. And they’re adding to their menu of services all the time.
Their primary business of course is automated online investing. You can open an account with as little as $500, and the platform will design a portfolio for you, then manage it continuously. Your money will be invested in a globally diversified portfolio of ETFs–just like most other robo-advisors. But Wealthfront takes it a step further, and also adds real estate and natural resources.
Like other robo-advisors, Wealthfront uses Modern Portfolio Theory (MPT) in the creation of portfolios. They first determine your investment goals, time horizon, and risk tolerance, then build a portfolio designed to work within those parameters. MPT emphasizes proper asset allocation to both maximize returns, and minimize losses.
But in a major departure from other robo-advisors, Wealthfront now offers the ability to customize your portfolio and get access to a variety of investment methodologies and portfolios, including Smart Beta, Risk Parity and Stock-Level Tax-Loss Harvesting. And more recently, they’ve also stepped into the financial planning arena. They now offer several financial planning packages, customized to very specific needs, including retirement planning and college planning.
If you haven’t checked out Wealthfront in the past year or so, you definitely need to give it a second look. This is a robo-advisor platform where things are happening–fast!
How Wealthfront Works
When you sign up with Wealthfront, they first have you complete a questionnaire. Your answers will determine your investment goals, time horizon, and risk tolerance. A portfolio invested in multiple asset classes will be constructed, with an exchange-traded fund (ETF) representing each.
The advantage of ETFs is that they are low-cost, and enable the platform to expose your portfolio to literally hundreds of different companies in each asset class. With your portfolio invested in multiple asset classes, it will literally contain the stocks and bonds of thousands of companies and institutions, both here in the U.S. and abroad.
Wealthfront offers tax-loss harvesting on all portfolio levels. But they’ve also added portfolio options for larger investors, that include stocks as well as ETFs. The inclusion of stocks gives Wealthfront the ability to be more precise and aggressive with tax-loss harvesting.
Each portfolio also comes with periodic rebalancing, to maintain target asset allocations, as well as automatic dividend reinvestment. As is typical with robo-advisors, all you need to do is fund your account–Wealthfront handles 100% of the investment management for you.
More recently, Wealthfront has also added external account support. The platform can now incorporate investment accounts that are not directly managed by the robo-advisor. This will provide a high-altitude view of your entire financial situation, helping you explore what’s possible and providing guidance to optimize your finances.
And much like many large investment brokers, Wealthfront now offers a portfolio line of credit. It’s available only to investors with $25,000 or more in a taxable account, but if you qualify you can borrow money against your investment account and set your own repayment terms in the process
Wealthfront Features and Benefits
Minimum initial investment: $500
Account types offered: Individual and joint taxable accounts; traditional, Roth, rollover and SEP IRAs; trusts and 529 college accounts
Account access: Available in web and mobile apps. Compatible with Android devices (5.0 and up), and available for download at Google Play. Also compatible with iOS (11.0 and later) devices at The App Store. Compatible with iPhone, iPad and iPod touch devices.
Account custodian: Account funds are held in a brokerage account in your name through Wealthfront Brokerage Corporation, which has partnered with RBC Correspondent Services for clearing functions, such as trade settlement. IRA accounts are held with Forge Trust.
Customer service: Available by phone and email, Monday through Friday, from 7:00 AM to 5:00 PM, Pacific time.
Wealthfront security: Your funds invested with Wealthfront are covered by SIPC, which insures your account against broker failure for up to $500,000 in cash and securities, including up to $250,000 in cash.
Wealthfront uses third-party providers to maintain secure, read-only links to your account. The providers specialize in tracking financial data, as well as employ robust, bank-grade security, and in general, they follow data protection best practices. In addition, Wealthfront does not store your account password.
Wealthfront Investment Methodology
For regular investment accounts, Wealthfront constructs portfolios from a combination of 10 different specific asset classes. This includes four stock funds, four bond funds, a real estate fund, and a natural resources fund.
Each portfolio will contain various allocations of each asset class, based on your investor profile as determined by your answers to the questionnaire. The one exception is municipal bonds. That allocation will appear only in taxable accounts. IRAs don’t include them since the accounts are already tax-sheltered.
Notice in the table below that most asset classes have two ETFs listed. This is part of Wealthfront’s tax-loss harvesting strategy. In each case, the two ETFs are very similar. To facilitate tax-loss harvesting, one fund position will be sold, then the second will be purchased at least 30 days later, to restore the asset class. (We’ll cover tax-loss harvesting in a bit more detail a little further down.)
The ETFs used for each asset class are as follows, as of December 29, 2018:
Specific Asset ClassGeneral Asset ClassPrimary ETFSecondary ETF
US Stocks
Stocks
Vanguard CRSP US Total Market Index (VTI)
Schwab DJ Broad US Market (SCHB)
Foreign Stocks
Stocks
Vanguard FTSE Developed All Cap ex-US Index (VEA)
Schwab FTSE Dev ex-US (SCHF)
Emerging Markets
Stocks
Vanguard FTSE Emerging Markets All Cap China A Inclusion Index (VWO)
iShares MSCI EM (IEMG)
Real Estate
Real Estate
Vanguard MSCI US REIT (VNQ)
Schwab DJ REIT (SCHH)
Natural Resources
Natural Resources
State Street S&P Energy Select Sector Index (XLE)
Vanguard MSCI Energy (VDE)
US Government Bonds
Bonds
Vanguard Barclays Aggregate Bonds (BND)
Vanguard Barclays 5-10 Gov/Credit (BIV)
TIPS
Bonds
Schwab Barclays Capital US TIPS (SCHP)
Vanguard Barclays Capital US TIPS 0-5 Years (VTIP)
Municipal Bonds (taxable accounts only)
Bonds
Vanguard S&P National Municipal (VTEB)
State Street Barclays Capital Municipal (TFI)
Dividend Stocks
Bonds
Vanguard Dividend Achievers Select (VIG)
Schwab Dow Jones US Dividend 100 (SCHD)
Wealthfront’s historical returns are as follows (through 1/31/2019). But keep in mind these numbers are general. Since the portfolios designed for each investor are unique, your returns will vary.
Specialized Wealthfront Portfolios
As mentioned in the introduction, Wealthfront has rolled out several different investment options, in addition to its regular robo-advisor portfolios. Each represents a specific, and generally more specialized investment strategy, and is typically available to those with larger investment accounts.
Smart Beta: You’ll need at least $500,000 to be eligible for this portfolio. Smart beta departs from traditional index-based investing, which relies on market capitalization. For example, since Apple is one of the most highly capitalized S&P 500 stocks, it has a disproportionate weight in strict S&P 500 index funds. In a smart beta portfolio, the position in Apple will be reduced based on other factors.
In general, under smart beta, the weighing of stocks in the fund uses a variety of factors that are less dependent on market capitalization. There’s some evidence this investment methodology produces higher returns. This portfolio is available at no additional fee.
Wealthfront Risk Parity Fund: This is actually a mutual fund–the first offered by Wealthfront. It involves the use of leverage with some positions within the portfolio. It attempts to achieve higher long-term returns by equalizing the risk contributions of each asset class. It’s based on the Bridgewater Hedge Fund, and requires a minimum of $100,000, with an additional annual fee of 0.25% (0.50% total). This is the only Wealthfront portfolio that charges a fee over and above the regular advisory fee.
Socially responsible investing (SRI): Wealthfront just recently began to offer a specific SRI portfolio option. Once you sign up, you’ll be able to customize your portfolio and add socially responsible ETFs.
Sector-specific ETFs: If you want to invest in a particular portion of the market, such as technology or healthcare, Wealthfront gives you the option to build a portfolio that focuses on certain industries to portions of the stock market.
Customized Wealthfront Portfolios:
Wealthfront also lets investors build their own portfolios, which is somewhat uncommon among robo-advisors.
Most robo-advisors will build your portfolio automatically based on your risk tolerance and goals. If you like that service, Wealthfront can do it. However, more hands-on investors are free to make tweaks to the automatically designed portfolio by adding or removing ETFs.
You can also build a portfolio entirely from scratch if you’d rather. You can choose which ETFs to invest in and how much you want to invest in them. You can then let Wealthfront handle things like rebalancing and tax-loss harvesting while maintaining the portfolio you desire.
Wealthfront Tax-loss Harvesting
If there’s one investment category where Wealthfront stands above other robo-advisors, it’s tax-loss harvesting. Not only do they offer it on all regular taxable accounts (but not IRAs, since they’re already tax-sheltered), but they also offer specialized portfolios that take it to an even higher degree.
Wealthfront starts with a tax location strategy. That involves holding interest and dividend-earning asset classes in IRA accounts, where the predictable returns will be sheltered from income tax. Capital appreciation assets, like stocks, are held in taxable accounts, where they can get the benefit of lower long-term capital gains tax rates.
But for larger portfolios, Wealthfront offers Stock-level Tax-Loss Harvesting. Three specialized portfolios are available, using a mix of both ETFs and individual stocks. The purpose of the stocks is to provide more specific tax-loss harvesting opportunities. For example, it may be more advantageous to sell a handful of stocks to generate tax losses, than to close out an entire ETF.
Given that Wealthfront puts such heavy emphasis on tax-loss harvesting, it’s not surprising they’ve published one of the most respected white papers on the subject on the internet. If you want to know more about this topic, it’s well worth a read. The paper concludes that tax-loss harvesting can significantly increase the return on investment of a typical portfolio.
US Direct Indexing
US Direct Indexing is an enhanced level of tax-loss harvesting that Wealthfront offers to people with account balances exceeding $100,000.
Instead of building a portfolio of ETFs, Wealthfront will use your money to directly purchase shares in 100, 500, or 1,000 US companies. By buying shares in so many companies, Wealthfront can emulate an index fund in your portfolio while owning individual shares in the businesses.
Owning individual shares in hundreds of companies makes tax-loss harvesting easier as it lets Wealthfront’s algorithm trade based on movements in individual stocks rather than in funds. This can increase the number of tax losses that Wealthfront harvests each year, reducing your income tax bill.
Other Wealthfront Features
Wealthfront Cash Account
Wealthfront offers acash account where you can safely and securely store your money for anything–emergencies, a down payment for a home, or to later invest. By working with what they call Program Banks, Wealthfront has quadrupled the normal FDIC insurance on this account, so you’re protected for up to $5 million.
There’s also no market risk since it’s not an investment account and the money isn’t being invested anywhere. You can make as many transfers in and out of the account as you’d like, and it only takes $1 to start.
So what’s the catch?
There really isn’t one. Wealthfront will skim a little off the top to make some money before giving you an industry-leading 4.30% APY, but other than that, you’re just giving them more financial data. Since we’re doing this all the time with technology anyway, it shouldn’t make that big of a difference.
I see no downside, especially if you’re already a client of Wealthfront.
They’re really making a play to be your all-in-one financial services provider, too.
A new feature, just launched, is the ability to use your cash account as a checking account. This includes the ability to access your paycheck up to two days early when you set up a direct deposit. Additionally, you can invest in the market within minutes using your Wealthfront Cash account. Put the two together and you give yourself the ability to invest more than 100 days more in the market. The account also allows you to auto-pay bills and use apps like Venmo and PayPal to send money to friends or family. Account-holders also get a debit card to make purchases and get cash from ATMs. And you can use the account to organize your cash into savings buckets – like an emergency fund, down payment on a house, or other large purchase – and use Wealthfront’s Self-Driving Money offering to automate your savings into those buckets.
If you have cash that’s getting rusty in a traditional bank account and you want to earn more, the Wealthfront Cash Accountis a great place to keep it.
Read more about the cash account in our Wealthfront Cash Account full review.
Wealthfront Portfolio Line of Credit
This feature is available if you have at least $25,000 in your Wealthfront account. It allows you to borrow up to 30% of your account value, and currently charges interest rates between 3.15% and 4.40% APR depending on account size. You can make repayments on your own timetable, since you’re essentially borrowing from yourself. And since the credit line is secured by your account, you don’t need to credit qualify to access it.
Wealthfront Free Financial Planning
This is Wealthfront’s entry into financial planning. But like everything else with Wealthfront, this is an automated service. There are no in-person meetings or phone calls with a certified financial planner. Instead, technology is used to help you explore your financial goals, and to provide guidance to help you reach them. And since the service is technology-based, there is no fee for using it.
The service can be used to help you plan for homeownership, college, early retirement, or even to help you plan to take some time off to travel, like an entire year!
Simply choose your financial objective, enter your financial information, and Wealthfront will direct you on how to plan and prepare.
Self-Driving Money
One of the biggest and largely unrecognized obstacles for most investors is something known as cash drag. That’s when you have too much of your portfolio sitting in cash, which may earn interest, but it doesn’t provide the investment returns you can get in a diversified investment portfolio.
Wealthfront has addressed the cash drag dilemma with their newly released Self-Driving Money features. It’s a free service offered by the robo-advisor that essentially automates your savings strategy. It does this by automatically moving excess cash to help meet your goals, including into investment accounts where it will earn higher returns. And in the process, it eliminates the need to make manual cash transfers, and the judgment needed to decide exactly when to make that happen.
Our vision of Self-Driving Money is going to be a complete game-changer for people’s finances, said Chris Hutchins, Head of Financial Automation at Wealthfront. We want to completely remove the burden of managing your money so you can focus on your career, your family or whatever is most important to you.
You can take advantage of Self-Driving Money from the Wealthfront Cash Account. You’ll set a maximum balance for the connected account, which should be an amount that’s more than you expect to spend or withdraw on a monthly basis.
How It Works
When Wealthfront determines you’re over your maximum balance by at least $100 it will schedule an automatic transfer of the excess cash based on your goals. For example, you can tell Wealthfront you want to save $10,000 in an emergency fund, then max out your Roth IRA, then put the rest toward saving for a down payment on a house. Once you set the strategy, Wealthfront will automate the rest.
And before it happens, you’ll receive an email alert, then always have 24 hours to cancel the transfer if you need to cover unexpected expenses. You’ll also be able to turn on and off your Self-Driving Money plan at any time.
It’s usually possible to set up automated transfers from external accounts into most investment accounts. But what sets Wealthfront apart is the fact that it will make those transfers automatically. They will make sure you always have enough cash to pay your bills, then automatically transfer any excess into your savings buckets or investment accounts to improve the return on your money.
The strategy is designed to optimize your money across spending, savings, and investments, and to make it all flow with no effort on your part. You can simply have your paycheck direct deposited into your external checking account or Wealthfront Cash Account, cover your expected monthly spending, then have excess funds automatically transferred into the Wealthfront account of your choice.
By delivering on its Self-Driving Money vision, Wealthfront is taking the robo-advisor concept to a whole new level. Not only do you not need to concern yourself with managing your investments, but now even funding those investments will happen automatically. The result will be near complete freedom from the financial stresses that plague so many individuals.
Wealthfront Fees
Wealthfront has a single fee structure of just 0.25% per year for their advisory fee. That means you can have a $100,000 portfolio managed for just $250, or only a little bit more than $20 per month.
The one exception is the Wealthfront Risk Parity Fund, which has a total fee of 0.50% per year.
How to Sign Up with Wealthfront
To open an account with Wealthfront, you’ll need to be at least 18 years old, and a U.S. citizen.
You’ll need to provide the following information:
Your name
Address
Email address
Social Security number
Date of birth
Citizenship/residency status
Employment status
As is the case with all investment accounts, you’ll also be required to supply documentation verifying your identity. This is usually accomplished by supplying a driver’s license or other state-issued identification.
As mentioned earlier, you complete a questionnaire that will be used to determine your investment goals, time horizon, and risk tolerance. Your portfolio will be based on your answers to that questionnaire, and will be presented to you upon completion of the questionnaire.
For funding, you can use ACH transfers from a linked bank account. You will also have the option to schedule recurring deposits, on a weekly, biweekly, or monthly basis. The platform can even enable you to set up dollar-cost averaging deposits.
If you already have a brokerage account with another company, Wealthfront makes it easy to transfer your funds to your new account. If you’re invested in ETFs that Wealthfront supports, Wealthfront will assist with an in-kind transfer.
That means that you won’t have to sell your shares before transferring funds, which lets you avoid capital gains taxes that would be triggered by a sale.
Wealthfront Alternatives
Wealthfront’s closest competitor, and the robo-advisor that offers the most comparable services, is Betterment. They also have an annual advisory fee of 0.25%, but require no minimum initial investment. That could make it the perfect robo-advisor for someone with no money, who plans to fund their account with monthly deposits. Read the full Betterment review here.
Related: Wealthfront vs. Betterment
Another alternative is M1. Also a robo-advisor, M1 enables you to invest your money in what they call “pies”. These are miniature investment portfolios comprised of both stocks and ETFs. You can invest in existing pies, or create and populate pies of your own design. Once you invest in one or more pies, the platform will automatically manage it going forward. What’s more, M1 is free to use. Read more about M1 here.
Related: Wealthfront vs. Vanguard
Read More: The Best Robo Advisors – Find out which one matches your investment needs.
Wealthfront Pros and Cons
Investment options: Wealthfront offers more investment options than just about any other robo-advisor, particularly for investors with at least $100,000.
Reasonably priced: The annual fee of 0.25% is extremely reasonable, especially when you consider the degree of sophistication offered by Wealthfront’s investment methodology.
Tax-loss harvesting: This is available on all accounts, and Wealthfront is probably better at this investment strategy than any other robo-advisor.
Portfolio credit line: Gives you the ability to borrow against your portfolio with ease, and represents a form of margin investing.
Financial planning feature: The financial planning service is free to use and is available to all investors.
Limited access for smaller investors: Some of the more advanced investment portfolios and services are available only to investors with $100,000 or more to invest.
$500 minimum initial investment: It’s a minor issue, though some competitors require no funds to open an account.
FAQs
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Should You Sign Up for Wealthfront?
In a word, absolutely! Wealthfront is one of the very top robo-advisors, and you can’t go wrong with this one. Not only do they offer far more services than most other robo-advisors, but they also allow you to grow along the way. For example, as your account increases in value, you can take advantage of more sophisticated investment strategies, including advanced tax-loss harvesting.
That Wealthfront offers its portfolio line of credit and free financial planning services only makes the platform a bit more attractive, But the real benefit is the actual investment service. Wealthfront’s investment service comes extremely close to that of traditional human investment advisors, but at only a fraction of the annual cost.