Will Wealthfront handle my transferred assets tax-efficiently?

Yes! Unlike a traditional financial advisor, Wealthfront automatically works to minimize the impact of taxes when transferring over outside investments. Specifically, we will apply the following strategies, if applicable, in the following order:

  1. Incorporate compatible transferred assets (e.g. if your existing portfolio holds an ETF or stock that we would include in your Wealthfront portfolio) directly into your Wealthfront investment mix whenever possible
  2. Sell assets with losses
  3. Sell assets with long-term capital gains
  4. Use short-term capital losses from Tax-Loss Harvesting and Direct Indexing to offset short-term capital gains and accelerate your transition into the Wealthfront portfolio
  5. Hold off on selling any other assets with short-term capital gains until they become long-term (owned for at least one year)
  6. After selling your assets, invest the cash in your Wealthfront portfolio 

Collectively, we call this service Tax-Minimized Brokerage Account Transfer.

Unfortunately we are not able to sell the following kinds of assets: mutual funds (including DFA funds), penny stocks, bonds, options, annuities, or any other financial instruments that don’t trade on an exchange.

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Wealthfront prepared this article for informational purposes and not as an offer, recommendation, or solicitation to buy or sell any security. Wealthfront and its affiliates may rely on information from various sources we believe to be reliable (including clients and other third parties), but cannot guarantee its accuracy or completeness. See our Full Disclosure for more important information.

Wealthfront and its affiliates do not provide tax advice and investors are encouraged to consult with their personal tax advisor. Financial advisory and planning services are only provided to investors who become clients by way of a written agreement. All investing involves risk, including the possible loss of money you invest. Past performance does not guarantee future performance.