Where do you turn when you’re looking for a robo-advisor with medium to low account management fees and a low investment minimum? The good news—and the bad news—is that there are a lot of robo-advisors with low fees and minimums.
We’re here to help you make sense of your options. Today we’re putting Wealthfront and Fidelity Go head to head so that you can determine which robo-advisor meets your financial needs.
Wealthfront vs. Fidelity Go – Overview
Wealthfront is one of the premier robo-advisors and offers clients quite a few investment options. In addition to the traditional retirement accounts, Wealthfront clients can also invest in 529 college savings accounts and high yield cash accounts.
Beyond offering varied account types, Wealthfront takes great care to understand their investors. The Wealthfront sign-up process is among the most comprehensive. The Path digital financial advisor within the Wealthfront platform is designed to mirror a human financial advisor’s questions. Your risk tolerance, goals, and financial situation are accounted for before your portfolio is created.
We also like Wealthfront’s high yield cash account with debit card and free ATM withdrawals.
Wealthfront also offers a Risk Parity fund
Fidelity Go allows for flexible investment management. Fidelity Go offers more investment options than Wealthfront. Investors can choose automated investing or professional management for a portion of their portfolio. Actively managed portfolios have the chance of outperforming the market, though they do come with risks. Balancing a portfolio that combines passive and active management might be the winning strategy!
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Wealthfront vs. Fidelity Go Comparison – Top Features
|Overview||A goals based automated investment advisor with superior digital financial advisor.||Automated investment management robo-advisor with access to actively managed funds and Fidelity Investment Company services.|
|Minimum Investment Amount||$500||Zero - $10 to begin investing.|
|Fee Structure||0.25% of AUM||0.35% of AUM|
|Top Features||Goal-based ETF investment portfolio. PATH digital financial advisor. Tax-loss harvesting. Risk Parity and Smart Beta portfolios. College planning and 529 accounts available.||Offers both ETFs and mutual funds. Target tracking helps you to reach your goals. Annual portfolio review. Part of the Fidelity Investment company.|
|Accounts Available||Individual and joint investment accounts. Roth, traditional, SEP and rollover IRAs. Trusts. 529 college savings plan accounts.||Single and joint taxable investment accounts. Roth, traditional, and rollover IRAs.|
|Investment Funds||Low fee, diversified stock and bond ETFs.||Combination of mutual funds and exchange traded funds (ETFs).. The majority of funds carry no management expense ratio.|
|Free Services||Free portfolio review and home buying guide.||N/A|
|Promotions||First $5,000 managed for free if you click on this link.||N/A|
|Contact & Investing Advice||Phone M–F 10 am–8 pm ET|
Live Chat (offline) 8 am - 8 PM EST Monday - Friday
Wealthfront top features:
- Daily tax-loss harvesting
- Path financial planner – a comprehensive digital financial advisor
- 529 college savings accounts
- Direct indexing for larger accounts
- High yield cash management account
- Borrow against your investments
Fidelity Go top features:
- Predictions for likelihood of achieving target goals
- Automated suggestions for reaching financial goals
- Short-term investments available
- Only $10 required to start investing
- Offers actively managed funds plus passive index funds
Wealthfront vs. Fidelity Go – Who Benefits?
Investors who want their robo-advisor to be connected to a larger family of investment services would benefit from working with Fidelity Go.
If you want your robo to include actively managed funds as well as the typical passively managed index funds, then Fidelity Go is the best option.
Fidelity Go is part of a full service financial management company which offers services such as life insurance, wealth management, and retirement services.
Fidelity Go would also benefit investors who like more frequent check-ins. On their website, Fidelity Go states that investors can expect summary emails and check-ins to ensure they are investing with your most up-to-date information possible.
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That being said, those who are looking for tax-loss harvesting will benefit from Wealthfront. Additionally, Wealthfront offers daily tax-loss harvesting for investors.
Wealthfront’s .25% investment management fee is also lower than Fidelity Go’s .35% fee. Although Fidelity does use several zero fee ETFs. Fidelity, on the other hand, does not offer this service at all.
Wealthfront’s high yield cash account is enticing for investors seeking higher yields for short term cash.
Wealthfront also offers a free portfolio review, which incorporates all of your investment accounts – not just those at Wealthfront.
When choosing between Fidelity or Wealthfront, it’s always best to consider your own financial needs.
Wealthfront vs. Fidelity—Fees and Minimums
Minimums Winner: Fidelity Go doesn’t have a minimum. Although you’ll need $10 to get started investing.
Fees Winner: This is a close one, with Wealthfront a notch in front with the 0.25% management fee and first $5,000 managed for FREE.
Wealthfront requires a minimum initial investment of $500—a relatively low minimum.
While no-minimum investment robo-advisors do exist, in the grand scheme of things a $500 minimum investment amount is affordable.
Wealthfront is also middle of the road in terms of their management fees: .25% AUM. This fee puts them in line with other heavy hitters like Betterment and SigFig.
On the other hand, investors who don’t have $500 handy or want to test the robo-advisor market with a smaller initial investment will love Fidelity Go. You can get started with no minimum investment with this robo-advisor!
Fidelity’s management fees are higher than Wealthfront’s—.35% AUM. This fee is closer to robo-advisors like Vanguard and TD Ameritrade, both of which will also connect investors to a host of other financial services in connection with their larger institutions. However, Vanguard and TD Ameritrade charge only .30% AUM for their robo-advisor services.
Wealthfront vs. Fidelity Go – Deep Dive
Wealthfront and Fidelity Go are relatively affordable, with low (or no!) minimum investment requirements and fees well below those charged by traditional financial planners. So what really sets the two apart?
Wealthfront vs. Fidelity—Performance Awards
Fidelity Go performed better than Wealthfront during the first few months of 2019, earning second place in two categories (growth and balance) while Wealthfront took third in a single category (income).
Take these numbers with a grain of salt, as robo-advisor performance can fluctuate just as much as any other investment option out there. However, the fact that both robo-advisors have been ranked a top performer for multiple years shows they’re doing something right.
Wealthfront vs. Fidelity—Retirement Planning
In 2017, Wealthfront rolled out the Path Financial Planner, an in-depth retirement planning tool. This tool links your existing accounts to determine your current financial situation. It then looks at your goals, your financial choices, and factors outside of your control (like inflation and social security) and determines whether you are on the path to success.
If that isn’t enough, Path also helps investors allocate their savings across all platforms. This includes accounts held outside of Wealthfront.
Like many other robo-advisors, Fidelity Go manages and monitors your portfolio to ensure that your allocations and risk stay in line with your goals; however, they don’t have the sort of comprehensive retirement tool that Wealthfront does.
Wealthfront vs. Fidelity—Tax Loss Harvesting
Many robo-advisors offer tax-loss harvesting, though not all. Fidelity Go is in the latter category.
The Fidelity Go robo-advisor does not offer it.
This leaves Wealthfront as the clear victor in this category—if tax-loss harvesting is something you are interested in! Just remenber, that tax-loss harvesting only matters for taxable accounts, since IRA and other retirement accounts are not taxed while the investments are owned within the account. And, Roth IRA distributions aren’t taxed either if they meet certain conditions.
Wealthfront believes that their daily tax-loss harvesting is more beneficial than the TLH offered less-frequently by competitors.
Wealthfront vs. Fidelity – Investments
Winner: Wealthfront wins by a slim margin with it’s diverse fund offerings, smart beta and risk parity funds. Although, Fidelity Go is a close second with diversified investment funds.
Fidelity Go Investments
Fidelity Go offers both mutual and exchange traded funds. Like most robo-advisors, after a completing a quick questionnaire, you’ll receive a sample investment portfolio with stock and bond funds in a mix that fits with your risk level and time horizon.
“In selecting mutual funds for Fidelity Go® accounts, Strategic Advisers LLC may look at multiple factors, including but not limited to investment philosophy (whether the funds are actively or passively managed), risk and return characteristics (how closely the security tracks an underlying index), assets under management, and tax efficiency. The Fidelity Flex® mutual Funds or number of Flex Funds in which your account invests may change over time depending on the investment strategy you select.”~Fidelity Go Website
The portfolios range from conservative to aggressive.
Following are sample Fidelity Flex Funds, which do not have fund management fees:
|Sector||Fidelity Investment Fund||Ticker Symbol|
|U.S. Large-Cap Stocks||Fidelity Flex 500 Index||FDFIX|
|U.S. Mid-Cap Stocks||Fidelity Flex Mid-Cap Index Fund||FLAPX|
|U.S. Small-Cap Stocks||Fidelity Flex Small-Cap Index Fund||FLXSX|
|Foreign Stocks||Fidelity Flex International Index Fund||FITFX|
|Municipal Bonds||Fidelity Flex Municipal Income Fund||FUENX|
|Short-Term Municipal Bonds||Fidelity Flex Cons. Income Municipal Bond Fund||FUEMX|
|Short-Term Cash||Fidelity Government Cash Reserves||FDRXX|
If you’d like part of your investments managed by the Fidelity Go robo-advisor and another portion managed with a financial advisor, you might consider Fidelity’s Portfolio Advisory Services for those with greater than $50,000.
Fidelity does not disclose the full number of funds available through the robo-advisor before signing up.
Wealthfront offers a variety of stock and bond exchange traded funds (ETFs).
Wealthfront stock funds cover the U.S. and international markets including both developed and emerging markets as well as a dividend appreciation ETF. The bond ETFs span government, treasury inflation protected bonds, U.S. corporate bonds, a foreign emerging markets bond fund and municipal bonds for those with a taxable account in a high tax bracket.
The final two sector funds cover the U.S. real estate sector and Energy Select Sector SPDR ETF (XLE), an energy or natural resources fund.
For accounts valued at more than $100,000 Wealthfront replaces the domestic ETF with individual stocks, reducing fund expense ratios.
Wealthfront investment funds include:
|Investment Fund Category||Index Fund Ticker Symbol|
|US Total Stock Market||VTI and SCHB|
|Foreign Stock - Developed Market||VEA and SCHF|
|Foreign Stock - Emerging Market||VWO and IEMG|
|Dividend Appreciation Stock||VIG and SCHD|
|US Treasury Inflation Protected Bond (TIPs)||SCHP and VTIP|
|US Government Bond||BND and BIV|
|Municipal Bond||VTEB and TFI|
|US Corporate Bond||LQD|
|Foreign-Emerging Market Bond||EMB|
|Real Estate||VNQ and SCHH|
|Natural Resources (Energy)||XLE and VDE|
Additionally, Wealthfront offers a RIsk Parity Fund that attempts to minimize downside risk.
Wealthfront also offers a Smart Beta fund that attempts to outperform the market.
Yes. If you’re seeking low fee investment management and a reputable financial company than Fidelity Go is a good robo-advisor. The key to choosing a robo-advisor is always to match up what you are seeking with the offerings of company. If you’re seeking low fee investment management, with reasonable low fees affiliated with a major firm then Fidelity Go is worth it.
Wealthfront vs. Fidelity Go – The Takeaway
Wealthfront has a higher initial investment requirement, which can put it out of reach of some beginning investors. That being said, at only $500 the Wealthfront minimum investment is still low. Coupled with their .25% AUM fee, Wealthfront is an affordable option.
Wealthfront’s benefits include frequent tax-loss harvesting and the Path Financial Planner tool, both of which work to ensure that clients stay on-track and supported throughout their investment process.
If you want a 529 College Planning account, then Wealthfront is for you.
Fidelity Go is more accessible for first-time investors with no minimum investment requirement, but their .35% AUM fee, while still middle of the road for a robo-advisor, is higher than other no-minimum robos on the market. Although their zero management fee ETFs will slightly offset the higher management fee.
Fidelity Go might also make up for the higher fees due to its connection to Fidelity Investments, meaning that clients reap the benefits of joining the Fidelity family. They also offer account monitoring that keeps clients on track and have out-performed Wealthfront in two categories so far this year.
Fidelity Go also has the Fidelity branch network, which might be helpful for in person questions.
It’s a close contest between Wealthfront vs Fidelity Go. If you have a non-retirement investment account then Wealthfront’s tax-loss harvesting and lower management fee is a big draw. But, if you want access to the Fidelity platform, are interested in actively managed funds, and are comfortable with paying a slightly higher management fee, then Fidelity Go might be your choice.
Whether you choose Fidelity, Wealthfront or another robo-advisor, the best advice for building wealth is to begin investing today, for the long term!
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