Wealthfront vs ETRADE

ETRADE vs Wealthfront (2022)


Wealthfront vs ETRADE for online investing. Compare cost, brokerage fees, IRA accounts, and differences. Which firm is better?


E*Trade vs. Wealthfront Introduction


E*Trade and Wealthfront are worlds apart. Be sure to take a look at our research before choosing one broker over the other.


Cost


Broker Review Promotion
Offer
Stock/ETF
Commission
Mutual Fund
Commission
Maintenance
Fee
Annual IRA
Fee
Etrade Get zero commission on stock and ETF trades. $0 $19.95 $0 $0
Wealthfront na na na 0.25% 0.25%


Promotions


Wealthfront: None

E*Trade: Get zero commission on stock and ETF trades.



First Category: Tradable Assets


E*Trade offers the following investment vehicles in self-directed accounts:

  • Equities
  • Bonds
  • Funds (mutual, closed-end, and exchange-traded)
  • Options
  • Futures

The brokerage house also offers managed accounts. Some of the above asset classes are available in traditional packages, although E*Trade’s robo service only trades ETF’s. The cost of this latter service is 0.30% of assets under management.


Etrade vs Wealthfront


Wealthfront offers robo accounts only, and this of course is going to trim down the list of available investments quite a bit. The brokerage firm offers ETF’s only in its automated program, which means there are no other asset classes available at Wealthfront. The cost of the company’s robo service is 0.25%.

Wealthfront has added a couple of Grayscale cryptocurrency funds to its list of available ETF’s, and it has another program (for accounts above $100,000 in assets) that puts individual stocks in its robo accounts.


Wealthfront vs Etrade


Both firms in this contest offer socially-responsible robo accounts.

Winner: E*Trade


Second Category: Websites


Logging into the Wealthfront site, one of the first things we noticed is how simple it is. There aren’t many tools, so brevity is what is emphasized. There are no self-directed accounts with this brokerage firm, so there’s not much need for a lot of trading software.


Wealthfront or Etrade


Funds do have profiles on Wealthfront’s site. These are pretty bare, though. There’s a small graph with no tools at the top, and further down are details like expense ratio (this is an added expense on top of Wealthfront’s management fee) and dividend yield.

One tool we really like on Wealthfront’s site is a retirement estimator. It can collect account balances from external financial accounts. Combined with other numbers entered by the user, the software will generate a graph that shows how far ahead or behind the Wealthfront customer is in retirement saving.

E*Trade’s site is completely different. It has actual trading tools, and some of these are on a high level. A browser platform has excellent charting plus a sophisticated order ticket. Stocks have profiles, and there’s lots of information on them. E*Trade links pdf reports with trade recommendations from multiple analysts on these profiles.


Etrade or Wealthfront


During our investigation, we found a bond search wizard on E*Trade’s site. It can search by a variety of criteria, including maturity date, CUSIP, yield to maturity, and credit rating. Option tools are available and are on an even higher level.

Winner: E*Trade


Third Category: Mobile Apps


E*Trade has a mobile app (actually two of them) with the following highlights:

  • Horizontal charting with tools
  • Mobile check deposit
  • Simulated trading
  • Advanced order types
  • Level ii quotes
  • Discrete order tickets for options and mutual funds
  • Alerts
  • Watchlist
  • And more


Etrade versus Betterment


As with the website category, Wealthfront emphasizes simplicity here. Its app is designed only for phones (not tablets), and it has the same basic ETF profiles found on the website. Unfortunately, there is no mobile check deposit.

Goals can be set on the Wealthfront app. Examples include

- Buy a house
- Save for college
- Vacation

Wealthfront’s software will take answers to various questions and actually make recommendations about the prudence of saving for the established goal.

Winner: E*Trade


Fourth Category: Margin Trading


Margin borrowing is available at both brokerage firms. Wealthfront charges between 3.95% and 5.15% for loans. E*Trade is much higher. Its schedule ranges from 7.45% to 10.45% .

But the margin systems are very different. E*Trade customers can buy securities with margin loans. Wealthfront customers cannot. They can only withdraw loans as cash.

Wealthfront’s system has other differences. For instance, the broker requires $25,000 to begin borrowing. E*Trade maintains the standard $2,000 requirement.

Wealthfront also restricts the amount of leverage to just 30% of account value. E*Trade follows the industry-standard 50% for initial purchases of securities.

Winner: Debatable


Other Services


DRIP Service: E*Trade offers a Dividend Reinvestment Plan for self-directed customers free of charge. It will convert cash dividends from stocks and funds into more shares.

Periodic Mutual Fund Investing: It’s possible to set up recurring purchases of mutual funds at E*Trade. The broker charges nothing for the service.

Individual Retirement Accounts: Wealthfront doesn’t have the SIMPLE IRA. E*Trade does, plus some esoteric ones, like the Beneficiary IRA. But E*Trade does have some unfortunate $25 IRA fees for events like recharacterizations and early withdrawals.

Fractional Shares: Although fractional shares of stocks and ETF’s can’t be purchased inside a self-directed account at E*Trade, the broker’s robo service does use fractional shares. Wealthfront’s does not.

Extended Hours Trading: Investors at E*Trade can buy and sell before the market opens and after it closes. The brokerage house also offers a small list of ETF’s for overnight trading.

Banking Tools: Both investment firms offer bank accounts with cash management tools.

Initial Public Offerings: Wealthfront does not offer IPO participation. E*Trade does, and it has a useful IPO section on its website.

Winner: E*Trade


Now, Our Recommendations


Small Accounts: Both robo programs have a $500 minimum starting requirement. Self-directed accounts at E*Trade have no minimum. E*Trade’s IRA fees cause us to suggest Wealthfront for those account types.

ETF/Stock Trading: With very good ETF research, an advanced browser platform (and a desktop system, too), and free stock research tools, E*Trade is an easy pick.

Long-Term Investors & Retirement Savers: Both Wealthfront and E*Trade have educational and retirement accounts. Wealthfront has the 529 plan, while E*Trade offers the Coverdell Education Savings Account. Only E*Trade has a solo 401(k), a profit-sharing plan, target-date mutual funds, life insurance, and a SIMPLE IRA. Branch locations and financial planning top it all off.

Beginners: An automated account at either brokerage firm will get the job done. We think E*Trade will do a better job because automated clients will get access to a lot of self-directed resources.


Promotions


Wealthfront: None

E*Trade: Get zero commission on stock and ETF trades.



E*Trade vs Wealthfront - Final Thoughts


Wealthfront has robo accounts. E*Trade has robo accounts and a lot more.

Updated on 5/1/2022.


About the Author
Chad Morris is a financial writer with more than 20 years experience as both an English teacher and an avid trader. When he isn’t writing expert content for Brokerage-Review.com, Chad can usually be found managing his portfolio or building a new home computer.