If you want a robo-advisor to manage your money, Wealthfront and Merrill Guided Investing are two quality options for different reasons. Wealthfront is a relatively new technology company. Its robo-advisor is well-designed, offers an impressive combination of benefits, and keeps fees low. However, the whole system is automated, with no support from human financial advisors. Still, it made our list of thebest robo-advisors of 2023, winning best overall robo-advisor, best for goal planning, best for portfolio construction, and best for portfolio management.
Merrill Guided Investing also made our list, winning the best for education category. This robo-advisor is backed up by the investment professionals at Merrill. They oversee the robo-advisor recommendations with the goal of earning higher returns. You can also set up a premium plan with access to a human advisor. However, Merrill Guided Investing charges a higher fee and doesn’t allow as much portfolio customization as Wealthfront. Here’s what to know about Wealthfront and Merrill Guided Investing to decide which is best for your situation.
- Account Minimum: $500
- Fees: 0.25% for most accounts; no trading commission or fees for withdrawals, minimums, or transfers
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Key Takeaways of Wealthfront
- Excellent robo-advisor support with tax-loss harvesting
- Offers customizable portfolios
- Low account minimum of $500
- Account Minimum: $1,000, or $20,000 with an advisor
- Fee: Annual 0.45% of assets under management, assessed monthly. With advisor—0.85%. Discounts available for Bank of America Preferred Rewards participants.
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Key Takeaways of Merrill Guided Investing
- Robo-advisor overseen by human investment experts
- Aims to outperform market indexes
- Option to have a plan with access to a human advisor
Account Setup
Wealthfront
Wealthfront has a fast, convenient account setup process. You start by creating a username and password and then enter your name and date of birth. You also pick what kind of Wealthfront investment account you want: individual or joint brokerage, individual retirement account (IRA), 529 plan, etc.
Next, you complete a questionnaire about your age, income, current net worth, and risk tolerance. You also pick what kind of investment style you want for the portfolio, such as the Classic Wealthfront portfolio or one focusing on ESG funds. With this information, the platform will give you a portfolio recommendation. If you like the portfolio, you can deposit money to set it up. Wealthfront requires a minimum investment of $500.
Merrill Guided Investing
Merrill Guided Investing also makes it easy to get started. You can log in as a guest without creating a Merrill or Bank of America account. The platform asks you to choose between eight different financial goals, such as retirement, an education fund, or saving for travel. You then answer questions about your investment timeline, current savings, and risk tolerance. You also pick whether you want a regular market-tracking account or a sustainability-focused portfolio considering ESG factors.
From there, the platform will give you a portfolio recommendation and information about whether you’re on track for the goal. If you are happy with the recommendation, you can launch an account. It takes $1,000 to use the robo-advisor only or $20,000 if you want access to a human advisor.
Account Types
Wealthfront
- Individual taxable
- Joint taxable
- Traditional IRA
- Roth IRA
- 401(k) rollover IRA
- SEP IRA
- Trust
- 529 college saving plan
- High-interest cash
Merrill Guided Investing
- Individual
- Joint brokerage accounts
- Traditional IRA
- Roth IRA
- Simplified employee pension (SEP)
- SIMPLE IRA
- 401(k) to IRA rollover
- Uniform Transfers to Minors Act (UTMA)andUniform Gift to Minors Act (UGMA)
Account Services
Wealthfront
Wealthfront has more account services. It offers a cash management account for your uninvested cash. The Wealthfront savings account earns 5.00% APY (5.50% when you refer a friend) and provides a debit card that lets you access over 19,000 ATMs for free. You can also borrow against your Wealthfront investment balance through a line of credit. Finally, Wealthfront lets you add individual stocks to your portfolio.
Merrill Guided Investing
Merrill Guided Investing just provides the robo-advisor investment service. It doesn’t come with a cash management account. Instead, all portfolios invest at least some of your money in cash. You can access more account services, like banking and brokerage trading, by opening a standard Merrill and/or Bank of America account.
Goal Planning
Wealthfront and Merrill Guided Investing both focus on helping you plan and reach your financial goals.
Wealthfront
Wealthfront uses an automated planning tool called Path. You can ask Path over 10,000 different financial questions, such as:
- What will I be worth in retirement?
- How much income will I need to retire with the same lifestyle?
- How much do I need to save to pay for my child’s college?
Path will look at your financial plan and relevant market data to answer these questions. It will also tell if you’re on track for goals, like if you will hit your retirement target and, if not, how short you currently are. You can change assumptions to see how that impacts your goals. For example, what would happen if you save an extra $100 a month?
Merrill Guided Investing
Merrill Guided Investing also prioritizes goal planning. When you first set up the account, you pick among eight specific goals to get an appropriate investment mix:
- Retirement
- General Investing
- Home
- Education
- Family Support
- Travel
- Special Occasion
- Other Large Purchase
You can pick more than one goal for your portfolio. The platform will tell you whether you’re on track based on your current savings and investment strategy.
If you’re behind, the platform will give you recommendations for improvement, such as delaying retirement by a year or increasing savings by $300 per month, showing the results of these moves.After you launch your account, you also receive ongoing updates about your progress towards each goal.
Portfolio Construction
Wealthfront
Wealthfront builds its portfolios using low-cost exchange-traded funds (ETFs) from companies like iShares, Schwab, and Vanguard. When you enter your goals and risk tolerance, the platform builds you a portfolio with funds in up to 17 different asset categories, including U.S. stocks and bonds, international stocks and bonds, commodities, and real estate. You also pick an investment style for your portfolio:
- Classic: Wealthfront’s original portfolio aims to maximize returns based on investor's risk tolerance
- Socially Responsible: Screens investments based on ESG factors
- Automated Bond: Only invests in bonds to generate income
- Direct Indexing: Includes individual stocks in your portfolio as well as ETFs; you need at least $100,000 to use this option
- Smart Beta: Uses a more advanced trading strategy looking to outperform the market; you need $500,000 for this portfolio
Merrill Guided Investing
Merrill Guided Investing builds portfolios with the goal of outperforming the market. In-person investment experts at Merrill pick the funds and portfolio allocation to guide the robo-advisor based on market conditions. It’s not a fully automated process like Wealthfront, where the platform makes all the decisions.
After you enter your goals and risk tolerance, financial situation, and investment timeline, the platform gives you a portfolio recommendation of stock funds, bond funds, and cash.
| Available Assets | ||
|---|---|---|
| Wealthfront | Merrill Guided Investing | |
| Individual Stocks | Yes | No |
| Mutual Funds | No | Yes |
| Fixed Income | ETFs | Mutual funds and ETFs |
| REITs | Yes | No |
| Socially Responsible or ESG Options | Yes | Yes |
| ETFs | Yes | Yes |
| Non-Proprietary ETFs | Yes | Yes |
| Private Equity | No | No |
| Crypto | Crypto funds, not individual coins | No |
| Forex | No | No |
Portfolio Customization
Wealthfront
Wealthfront gives you a lot more freedom to customize your portfolio. When you first sign up, you can change the initial portfolio allocation. The platform gives you a slider tool to adjust your risk tolerance so you can shift your target to different percentages, like more stocks and fewer bonds.
Wealthfront also lets you directly add or remove ETFs from your portfolio. You can adjust the recommendation to meet your preferences better or even design your own portfolio, which the Wealthfront robo-advisor will then manage according to your goals and targets.
Merrill Guided Investing
Merrill Guided Investing does not provide anywhere near this flexibility. You can change your answers in the platform, like your risk tolerance and time horizon, to get a different portfolio recommendation. However, you cannot manually adjust the recommended portfolio allocation.
The platform also does not let you add or subtract funds. You can contact Merrill to request restrictions on your account if you want to exclude a particular fund from your portfolio. However, it’s not nearly as easy to customize as with Wealthfront. Ultimately, Merrill Guided Investing limits your control over the portfolio because it expects users will follow the recommendations of the human investment experts overseeing everything.
Portfolio Management
Wealthfront
Wealthfront uses a standard robo-advisor portfolio management style. It just focuses on keeping your portfolio on the target allocation. Wealthfront reviews your portfolio daily, and if the allocation shifts off target, the platform automatically buys and sells investments to return to the target portfolio.
Wealthfront doesn’t specify when it rebalances, however, it does rebalance when your allocation is significantly off-track. The platform also rebalances when you deposit or withdraw money. You can link outside accounts to Wealthfront, and the platform will consider these balances for managing your portfolio.
Merrill Guided Investing
Merrill Guided Investing is different because it doesn’t just passively adjust your portfolio to meet target allocations. Instead, the human advisors overseeing the system track market conditions and adjust the portfolios when they see opportunities for higher returns. The platform still uses your goals and inputs as a guideline, but it doesn’t stick to the initial portfolio recommendation as rigidly as a normal robo-advisor.
You can link external accounts to Merrill Guided Investing so these balances are considered for the portfolio recommendations. Merrill Guided Investing requires you to complete a periodic review to confirm your goals and risk tolerance. It will adjust your portfolio as your situation changes. The answer to “Is Merrill Guided Investing worth it?” depends on whether you think the Merrill experts deliver enough extra return to justify the platform's higher fees.
Tax-Advantaged Investing
Wealthfront
If you invest through a taxable brokerage account, Wealthfront is the better option for tax-advantaged investing. It offers automatic tax-loss harvesting. If the platform sees an opportunity to sell an ETF for a deductible loss, it will do so and then replace it with a similar ETF. You lock in a tax break while keeping the same overall portfolio.
Merrill Guided Investing
Merrill Guided Investing does not offer tax loss harvesting. This is a common robo-advisor feature, so it is disappointing that it's not available here.
| Key Portfolio Management Features | ||
|---|---|---|
| Wealthfront | Merrill Guided Investing | |
| Automatic Rebalancing | For portfolio drift and after deposits/withdrawals | Yes, to meet target allocations and input from human advisors |
| Reporting Features | Tax and monthly statements available on the website | 24/7 access to dashboard plus monthly statements |
| Tax-Loss Harvesting | Yes—daily | No |
| External Account Syncing/Consolidation | Yes—for goal planning and asset allocation | Yes—for goal planning and asset allocation |
Security
Wealthfront and Merrill Guided Investing both offer standard, top-of-the-line security measures, including two-factor authentication, SSL website encryption, messaging encryption, and limits on who can see private financial data.
Both companies offer SIPC insurance for your account up to the standard $500,000, with $250,000 for cash. Neither offers excess SIPC insurance above the standard limits. If you use a Wealthfront cash management account, you receive FDIC insurance. Merrill Guided Investing does not provide FDIC insurance, but you would get it through a Bank of America deposit account.
User Experience
Desktop
Wealthfront and Merrill Guided Investing each offer an excellent desktop experience. Both platforms make it easy to find information, set up an account, design a portfolio, and manage your investments. Wealthfront has more investment tools and information, while the Merrill Guided Investing interface is cleaner and simpler.
Mobile
While some robo-advisors have limited mobile functionality, that’s not true with Wealthfront and Merrill Guided Investing. Wealthfront has an award-winning app that gives you access to the same investment and portfolio management tools as the desktop platform. Merrill Guided Investing does the same. It also adds extra functionality to the mobile app, such as check deposits, market news, and fund transfers.
Customer Service
Merrill Guided Investing
Merrill Guided Investing is much better for customer service. You get 24/7 phone support and access to live chat while using the platform. You can also upgrade to a premium account where you can schedule meetings with a human investment advisor.
Wealthfront
Wealthfront provides phone customer service but makes it hard to find this number. It prefers that customers answer questions themselves using the robo-advisor tools and online FAQs.
| Wealthfront | Merrill Guided Investing | |
| Phone & email available | Yes, technical support available weekdays at 877-910-4232, from 7 a.m. to 5 p.m. PT | Yes, 888-637-3343, 24/7 |
| Pre-funding phone consultation with a certified advisor | N/A | Yes, but depends on minimum investment |
| Online chat available | No | Yes |
| Website FAQ section | Yes—comprehensive | Yes—comprehensive |
Fees
Wealthfront charges a 0.25% annual AUM fee for all accounts. The only exception is if you use a 529 plan. Then, the Wealthfront fees are between 0.42% and 0.46% per year. Merrill Guided Investing is more expensive. It charges 0.45% per year for the robo-advisor tool only and 0.85% per year if you want access to a human investment advisor.
Besides the AUM fee, you also owe for the cost of the ETFs in your portfolio for both platforms. Neither charges commissions for these trades, though.
| Category | Wealthfront | Merrill Guided Investing |
| AUM Fee | 0.25% (0.42% to 0.46% for 529 plans) | 0.45% for robo-advisor only, 0.85% for access to a human advisor |
| Monthly Fee | None | None |
| ETF Expense Ratio | Average of 0.08% | 0.05%-0.17% |
| Commissions | None | None |
Final Verdict
Wealthfront and Merrill Guided Investing both offer excellent robo-advisors with quality goal-planning tools, a range of investment options, and excellent user experience. The right fit depends on your investment style. If you feel more comfortable investing on your own and want a more powerful robo-advisor, Wealthfront is the better choice. It gives you much more freedom to customize the portfolio, includes more benefits like tax-loss harvesting, and is less expensive at roughly half the annual fee.
Merrill Guided Investing is better if you aren’t comfortable trusting your portfolio entirely to a robot. It’s still an excellent robo-advisor, but you have human investment advisors overseeing the process. These investment pros also try to earn more based on market conditions versus passively sticking to the target allocations. You pay more for the Merrill Guided Investing fees, though, especially if you want to meet with a human advisor.
What Is the Minimum Balance for Merrill Guided Investing?
The minimum balance for Merrill Guided Investing is $1,000 if you only want access to the robo-advisor tool. If you want to meet with a human investment advisor, you need at least $20,000.
Is Merrill Guided Investing a Robo-Advisor?
Merrill Guided Investing is a hybrid robo-advisor. It is a robo-advisor platform that automatically comes up with portfolio recommendations and manages investments for clients.
However, the process is overseen by human investment professionals at Merrill. These professionals track market conditions and update the robo-advisor portfolio recommendations in an attempt to earn higher returns through active management. It’s not a fully automated process like a pure robo-advisor such as Wealthfront.
How Trustworthy Is Wealthfront?
Wealthfront is very trustworthy. It’s one of the top-ranked robo-advisors in the country, as it delivers quality investment options and portfolio management at a reasonable fee. Wealthfront also invests in security measures, such as encryption and limits on access to customer data. Finally, Wealthfront provides both SIPC and FDIC insurance on customer funds.
Are Wealthfront Fees Worth It?
Wealthfront’s fees can be worth it if you want help to manage your portfolio without paying the cost of a human advisor. Wealthfront charges 0.25% of your balance per year versus the 1% or more a typical human investment advisor charges. Wealthfront then creates and manages your portfolio with tax-loss harvesting to find ongoing tax breaks. Wealthfront claims it makes up its fees through tax-loss harvesting alone. On the other hand, if you feel comfortable investing on your own, you may not find Wealthfront’s fee worth it.
Methodology
Providing readers with unbiased, comprehensive reviews of digital wealth management companies, more commonly known as robo-advisors, is a top priority of Investopedia. Over a period of two months, our team of researchers, data collectors, and industry experts conducted an exhaustive review process that included in-depth industry research, company survey data collection, and hands-on demonstrations and evaluations of 19 robo-advisor platforms.
We then developed a quantitative model that scored each company to rate its performance across nine major categories and 57 criteria to find the best robo-advisors. The score for each company’s overall star rating is a weighted average of the criteria.
Many of the companies we reviewed also performed live demonstrations of their platforms and services in video calls with our research and editorial teams. Our team of expert writers and editors was also granted access to live accounts so they could perform hands-on testing. Through this all-encompassing data collection and review process, Investopedia has provided you with an unbiased and thorough review of the top robo-advisors.
Read our full Methodology for reviewing robo-advisors.
Dotdash Meredith 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. Dotdash Meredith is not a Wealthfront Advisers client, and this is a paid endorsem*nt. More information is available via our links to Wealthfront Advisers.
Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy.
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