Menu

Updated

If I change my risk score, how does Wealthfront transition my account to my new investment plan?

Before adjusting your risk score, you may want to review our blog post on the right and wrong reasons to change your risk score, in which we discuss that changing your risk tolerance in reaction to market performance is an unconscious form of market timing. 

 If you change your risk score in a taxable account, our software will attempt to transition your account to your new allocation in a tax-efficient manner and minimize realized short term capital gains.  If rebalancing will generate significant tax consequences or result in wash sales, then we may not trade right away. This means your allocation may differ from your target allocation for an extended period of time. When you make additional deposits, receive dividends or when overweight asset classes subsequently trade at a loss we’ll use these opportunities to transition your account to your new allocation. 

If these trades will not result in significant tax consequences or wash sales, we typically rebalance your account within one business day.

If you change your risk score in a retirement account, we typically rebalance within one business day. Please note that we do not guarantee the timing of any trades.

 

Was this article helpful?

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.