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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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Nothing in this blog should be construed as tax advice, a solicitation or offer, or recommendation, to buy or sell any security. Financial advisory services are only provided to investors who become Wealthfront Inc. clients pursuant to a written agreement, which investors are urged to read carefully, that is available at www.wealthfront.com. All securities involve risk and may result in some loss. For more information please visit www.wealthfront.com or see our Full Disclosure. While the data Wealthfront uses from third parties is believed to be reliable, Wealthfront does not guarantee the accuracy of the information.