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 powerhouse in the digital investment management industry. 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. Wealthfront appears all over our list of the best robo-advisors of 2024, 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. Although Merrill Guided Investing hasn’t kept up with its peers in terms of innovation, its human touch side is stronger than most competitors in the field. 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
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.
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 Setup Verdict: Wealthfront
While starting an account with either robo-advisor is simple, we give the edge to Wealthfront as its account minimum is lower than Merrill Guided Investing, allowing investors to get started with less.
Account Types
Wealthfront
- Individual taxable
- Joint taxable
- Traditional IRA
- Roth IRA
- 401(k) rollover IRA
- Simplified employee pension (SEP) IRA (for the self-employed and small businesses)
- Trust
- 529 college saving plan
- High-interest cash
Merrill Guided Investing
- Individual
- Joint brokerage accounts
- Traditional IRA
- Roth IRA
- SEP IRA
- SIMPLE IRA
- 401(k) to IRA rollover
- Uniform Transfers to Minors Act (UTMA) and Uniform Gift to Minors Act (UGMA)
Account Types Verdict: Tie
Both Wealthfront and Merrill Guided Investing offer the commonly used account types. A 529 plan or UTMA account will only make a difference if you are looking for those specific account types.
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. Wealthfront has a cash sweep within the robo-advisory account that automatically puts any uninvested cash into money market funds that currently have a 7-day yield of 5.26%. You can also borrow against your Wealthfront investment balance through a line of credit. Finally, Wealthfront lets you add individual stocks to your portfolio through a separate self-directed investing account.
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 which is put in a Merrill Lynch direct deposit program yielding a solid 5.17%. You can access more account services, like banking and brokerage trading, by opening a standard Merrill and/or Bank of America account.
Account Services Verdict: Wealthfront
It is always hard to compare a robo-advisor that has added other account services to a large financial firm that has added a robo-advisor. Bank of America/Merrill Lynch have a wide range of account services outside Merrill Guided Investing, but Wealthfront has more within and connected to their platform. Ultimately we give Wealthfront the edge here because of its higher interest rate on uninvested cash.
Goal Planning
Wealthfront and Merrill Guided Investing both focus on helping you plan for the future and reach your financial goals. While both robo-advisors have strong goal planning features, the two companies differ in how they help their customer base.
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.
Goal Planning Verdict: Wealthfront
Merrill Guided Investing and Wealthfront both have very strong goal planning features and excel when it comes to nudging you towards moves that increase your likelihood of success. Wealthfront simply has a deeper set of features in terms of goal planning and Path is an exceptional program. The fact that Merrill Guided Investing made it close is a compliment to its approach as Wealthfront has owned this category for multiple years.
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 Customization Verdict: Wealthfront
Wealthfront simply has more ways to customize your portfolio than Merrill Guided Investing allows for.
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. Wealthfront also offers account syncing. The external data is used by Wealthfront’s Path to allow you to see multiple goals and progress across all of your accounts. While this isn’t specific portfolio management, it is incredibly valuable in nudging you to monitor and adjust external holdings as part of the overall Wealthfront offering.
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. This is a rare feature for a robo-advisor. 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.
Portfolio Management Verdict: Wealthfront
Merrill Guided Investing has a very unique approach to rebalancing that does consider your external accounts. However, we still give the edge to Wealthfront here due to its rules-based approach on portfolio management, which is what customers expect from a robo-advisor.
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. They have indicated it will be added sometime in 2024.
Tax-Advantaged Investing Verdict: Wealthfront
Wealthfront’s automated tax-loss harvesting make it the clear winner here over Merrill Guided Investing. In fact, if you and a spouse link Wealthfront accounts, Wealthfront will consider both accounts when tax-loss harvesting.
| Key Portfolio Management Features | ||
|---|---|---|
| Wealthfront | Merrill Guided Investing | |
| Automatic Rebalancing | Yes, for portfolio drift and after deposits/withdrawals | Yes, to meet target allocations and input from human advisors |
| Reporting Features | Dashboard, 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 analysis | 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.
Security Verdict: Tie
Security at Wealthfront and Merrill Guided Investing are in line with industry standards. Your money is safe at either of these firms.
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.
Customer Service Verdict: Merrill Guided Investing
Merrill Guided Investing wins the customer support category by having 24/7 phone support in addition to the ability to add human investment advice.
| 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 | No | Yes, but depends on minimum investment |
| Online chat available | No | Yes (for customers in platform) |
| 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.
Fees Verdict: Wealthfront
Wealthfront is the clear winner when it comes to fees, coming in 0.20% lower than Merrill Guided Investing.
| Fees | Merrill Guided Investing | Wealthfront |
|---|---|---|
| Management fees for $5,000 account | $22.50 | $12.50 |
| Management fees for $25,000 account | $112.50 (Plus Advisor $212.50) | $62.50 |
| Management fees for $100,000 account | $450 (Plus Advisor $850) | $250 |
| Termination fees | None | None |
| Expense Ratios | Between 0.05% to 0.16%, depending on your allocation | Average 0.08% |
| Mutual funds | Dependent on portfolio | N/A |
The Bottom Line
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.
How We Review Robo-Advisors
Providing readers with unbiased, comprehensive reviews of digital wealth management companies, more commonly known as robo-advisors, is a top priority of Investopedia. We used our 2023 consumer survey to guide the research and weightings for our 2024 robo-advisor awards. To collect the data, we sent a digital survey with 64 questions to each of the 21 companies we included in our rubric. Additionally, our team of researchers verified the survey responses and collected any missing data points through online research and conversations with each company directly. The data collection process spanned from Jan. 8, to Feb. 9, 2024.
We then developed a quantitative model that scored each company to rate its performance across nine major categories and 59 criteria to find the best robo-advisors. The score for each company’s overall star rating is a weighted average of the criteria:
- Goal Planning – 21.00%
- Portfolio Contents – 17.00%
- Portfolio Management – 17.00%
- Fees – 15.00%
- Account Services – 10.00%
- Account Setup – 5.00%
- Customer Service – 5.00%
- Security & Education – 5.00%
- User Experience – 5.00%
Additionally, during our 2023 research, many of the companies we reviewed granted our team of expert writers and editors 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 more about how we research and review robo-advisors.
Separately, our research team conducted a survey of 205 U.S. adults aged 18 to 72 who are current clients of one of 18 robo-advisors. While the information collected did not influence the development of our ratings model, it was instrumental in gathering the valuable insights published in Investopedia’s 2023 Robo-Advisor Consumer Survey.
Participants in our 2023 Robo-Advisor Survey opted in to an online, self-administered questionnaire from a market research vendor. Data collection took place between Aug. 30 and Sept. 15, 2023, with 11 video interviews conducted with volunteer respondents from Sept. 7 to Sept. 17, 2023. Multiple quality checks, including screeners, attention gauges, comprehension evaluations, and logic metrics, among others, were used to ensure only the highest quality responses were included.
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 endorsement. More information is available via our links to Wealthfront Advisers.