Wealthfront vs. Vanguard vs. E*TRADE

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Investments are a crucial part of anyone's financial health, but they're also one of the most complicated parts of the personal finance puzzle. Put aside the fact that many people don't understand how things like the stock market even work; there's an overwhelming amount of options when it comes to where you can start investing.

Analyzing all the brokerages, robo advisors and brokers out there can drive you a little nuts. And deciding which one is the right choice for you will come down to your investment plans. Make sure to spend some time thinking about your future and goals before you invest anywhere.

We've broken down the major (and minor) differences between Wealthfront, Vanguard and E*TRADE for you. If you've been considering investing with one of these players, you'll find all the details you need below.

Quick Comparison of Wealthfront, E*TRADE and Vanguard

HighlightsE*TRADEVanguardWealthfront
Rating9.5/109/109/10
Min. Investment$0$0$500
Stock Trades$0/trade$0/trade
Options Trades$0.65/contract$1/ contract
Crypto Trades
Mutual Funds
Virtual Trading

About Each Stock Broker

About Wealthfront

California-based robo advisor Wealthfront came onto the scene in 2008. Founders Andy Rachleff and Dan Carroll originally intended to create a mutual fund analysis company, but they soon wanted to move into wealth management. With a mission to “help democratize access to sophisticated financial advice,” the duo decided to make Wealthfront a wealth management and education platform for people who weren't served by traditional investment firms.

When you sign up for Wealthfront, you complete a questionnaire and your answers are used to create your asset allocation needs.


About Vanguard

Vanguard was founded in 1975 by John C. Bogle as a client-owned mutual fund company. Vanguard consistently has some of the lowest fees offered to investors, and Bogle is credited with being the first to make low-fee index funds available to individual investors.


About E*TRADE

William A. Porter and Bernard A. Newcomb founded a company called TradePlus in California in 1982. E*TRADE was born out of TradePlus in 1991, with the goal of becoming an online trading platform for retail investors. E*TRADE claims the first online transaction ever sent to an exchange. Today E*TRADE provides online brokerage services as well as financial education.


How Are They the Same?

All three services offer many features. First, let's take a look at how they're similar.

Investment Account Types All three offer taxable, joint, Roth IRA, Traditional IRA, Rollover IRA, SEP IRA, trust and nonprofit accounts.
Investment Types All three services allow you to invest in exchange-traded funds (ETFs).
Mobile Apps All three services emphasize investing with an Android or Apple mobile device.

How Are They Different?

Here are some of the big differences between the three sites.

Platform Purpose Wealthfront is a robo advisor, while E*TRADE and Vanguard are full-service discount investment brokers.
Investor Profile E*TRADE and Vanguard are primarily for self-directed investors, while Wealthfront is for passive investors.
Investments Offered Wealthfront offers predesigned portfolios, but you can customize the ETFs that are in the portfolios. E*TRADE and Vanguard also offer managed investment options but allow you to invest in individual stocks, bonds, funds, options and other investments too.
Fees Wealthfront charges an annual advisory fee. Neither Vanguard nor E*TRADE charge trading commissions, although each also charges an annual advisory fee on its robo advisor.
Customer Service E*TRADE offers 24/7 customer service by live chat. Wealthfront and Vanguard offer limited daily phone center hours.
Local Branches E*TRADE has 30 local branch offices, Vanguard has 18, and Wealthfront has none.

Unique Features

Wealthfront

Wealthfront offers cash accounts to its users. With an APY of 3.30%, these are accounts where you can stash some savings at a higher interest rate than most banks, and the money isn't actively invested. Your money is protected up to $2 million, quadruple the FDIC insurance guarantee of $250,000. And with Self-Driving Money™ you can get your paycheck two days earlier, and set up automatic bill pay and transfer savings to designated buckets, like an emergency fund or vacation fund.

Vanguard

While not a totally unique feature, it must be said that Vanguard's commitment to low cost is written into the framework of the company. It's what inspired John Bogle to found the company in the first place.

The company has no outside owners, which not only keeps costs low but is unique in the investment field. The company is owned only by its shareholders.

Further Reading: Vanguard Personal Advisor Services Review

E*TRADE

Through Power E*TRADE, users have access to features such as E*TRADE's Strategy Scanner, which provides real-time screening, sales data, and backtesting of trading strategies.

Winner — For active investors, E*TRADE's professional-level platform is a standout. However, passive investors will prefer sitting back and letting Wealthfront do all the work.

Minimum Investment Comparison

  • Wealthfront requires a $500 minimum deposit for its low-fee index fund investment accounts.
  • E*TRADE has no required minimum deposit.
  • Vanguard also requires no minimum for a brokerage account. However, you need $1,000 to start investing in Vanguard Target Retirement Funds or Vanguard STAR® Fund. Most other Vanguard funds require a minimum of $3,000, depending on the share class.
Winner — It's a tie between E*TRADE and Vanguard.

Annual Fees

Wealthfront charges an annual advisory fee of 0.25% on its investment accounts on all assets under management. Wealthfront doesn't charge any fees for account opening, account closing, withdrawals or account transfers, nor any trading commissions.

Wealthfront also offers cash savings accounts, and there are no fees for those.

E*TRADE charges $0 per trade for stock, option and ETF trades. However, options investors will pay 65 cents per contract.

Vanguard charges $20 annually per mutual fund you have with the broker and/or $20 per brokerage account. If your account is under $10,000, Vanguard says that it will review how much your annual fee is. You can eliminate mutual fund fees by signing up for electronic message services, aka “going paperless.” Stocks, options, and ETFs are always commission-free while trading individual stocks at Vanguard comes with a sliding scale. Vanguard also charges a flat $5 per month fee for participants in a 403b plan.

Winner — E*TRADE wins for its commission-free trades.

Standout Features

Vanguard is beloved in the personal finance world for its low fees. That love is deserved. Over the lifetime of your investments, fees can eat away at your returns in huge amounts. Low fees may seem like a relatively benign thing to applaud, but it really matters when it comes to your money and should be considered a standout feature.

As for making personal finances and particularly investing accessible, both E*TRADE and Wealthfront have invested huge amounts of money and time into their education platforms. They both offer a wide array of blogs, videos and outlets that give users loads of information about investing. This is a very big deal since many people cite investing as an intimidating part of their financial experience.

Winner — Wealthfront, Vanguard and E*TRADE all win for offering standout features.

Customer Service

Wealthfront — has an abundance of information on how to use the website and services segmented into “Getting Started,” “My Wealthfront” and “Learning Center” in its online help center. On top of that, it offers videos from leaders in the industry that explain investing concepts. You can contact Wealthfront's support team 24/7 by submitting a help ticket on the website. Users can call a help number Monday through Friday, 7 a.m. to 5 p.m. Pacific Time.

Vanguard — has segmented its help center into the types of accounts you might need help with, as well as a list of answers to common questions. You can call Vanguard Monday through Friday from 8 a.m. to 10 p.m. Eastern Time or email at any hour. While Vanguard has limited hours when you can reach the customer service reps, once you do they are incredibly well informed and polite.

E*TRADE — provides 24/7 customer service through email and a phone number. There's also a chat box you can open to ask a question. The chatbox comes with a reminder not to reveal personal information. E*TRADE also provides information on where to find one of its 30-plus locations around the country if you want to speak to someone in person about your issue.

Winner — E*TRADE wins for its 24/7 access to an actual person.

Security

All of these investment services provide high-quality security. That's mandatory when you start a financial firm.

Wealthfront has a lot of language around security on its site, none of it very specific. The platform says it uses third-party firms to test security, but it doesn't tell you which ones. Wealthfront has an internal security system team that “monitor[s] numerous security sources,” but again there are no details provided on these activities. Wealthfront does stress in several places on the site that it will never sell any information you provide, and the platform undergoes an annual safety procedure audit by Ernst & Young. Assets are held by a third-party custodian, Apex Clearing, and Wealthfront has access to your money only to withdraw its fees.

E*TRADE works with a third-party app called VIP Access to generate a unique password each time you log in to the site. E*TRADE uses a 128-bit secure browser to log in to customer accounts and for all transactions performed. It also uses SSL to ensure that any data entered into the website is and stays encrypted. The site times you out after a certain amount of inactivity to prevent anyone else from viewing your information.

Vanguard does many of the same things that both Wealthfront and E*TRADE do: timeout features for the website, unique passwords to create an account, asking security questions to verify your login. Vanguard also sends an email and letter for every account transaction — if you don't recognize an action on your account from these notifications, you can call the helpline. Vanguard has an extended validation SSL, granted after an audit by security firm Comodo.

E*TRADE is the most upfront about its security features, which establishes to users that security is really a priority, not just something the site has to do for you. E*TRADE also encourages users to take their safety into their own hands and helps connect them to the tools to do so.


Who Are They Best For?

Wealthfront is a great way for new and young investors to get started with their investment accounts. The minimum deposit is low enough for even those who are lower-income or working on an introductory salary to swing it. With its hands-off approach, Wealthfront is also an attractive option for people who don't have the time or desire to manage their investments manually. Finally, Wealthfront does a lot to provide financial education for its users and the public at large. The Money Diaries series profiles famous people, how they use their money today and their financial backstories to help make money accessible.

Vanguard is a trusted investment name and comes with some of the lowest fees in the entire investing world. It's best for those ready to build a complete investing portfolio and who can regularly contribute $500-plus per month to their investments. This monthly contribution rate probably applies to those in the middle and late stages of their careers.

E*TRADE is best for those who are frequent traders who want to be very hands-on with their investments and continuing their investment education. Its platform is also good for newer investors, with a $0 minimum deposit for IRA accounts. There are no annual fees for accounts.


Bottom Line: Which Is the Best?

Investing is always going to be a very personal decision, and the tools you use will (and probably should!) change as you progress through your career and earning levels.

  • Robo advisors like Wealthfront are great for those in the early stages of their investing journey and who need to learn how comfortable they feel with investing.
  • E*TRADE offers valuable educational tools for those who feel ready to really dive into learning about and being involved in investing, so it makes for a good middle of your career.
  • Vanguard provides solid service in all categories but is fairly expensive to get started with for most accounts.

Other Relevant Comparisons we've made:

InvestorJunkie 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. InvestorJunkie is not a Wealthfront Advisers client, and this is a paid endorsement. More information is available via our links to Wealthfront Advisers.

Kara Perez

Kara Perez is a freelance personal finance writer. She is the founder of bravelygo.co, a company that connects women and money. Kara lives in Austin, TX and believes in the power of budgeting and peanut butter.

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