Updated
Minimum account sizes for US Direct Indexing and Smart Beta
What is the minimum for Wealthfront’s US Direct Indexing & Smart Beta?
Any taxable Automated Index Investing Account with at least $100,000 to invest is eligible for US Direct Indexing (formerly known as Stock-level Tax-Loss Harvesting). Any taxable Automated Index Investing Account with $500,000 to invest is eligible for Smart Beta. If you have US Direct Indexing in your Automated Index Investing Account, you can enable Smart Beta on your account's "Manage" screen. Once enabled, it becomes active when your account balance approaches $500,000.
Read more about transitioning from US Direct Indexing to Smart Beta here.
Our minimums are based on dollar amounts required to hold a reasonable collection of individual US stocks in a US Direct Indexing and Smart Beta position while continuing to track the performance of the broad US market.
That means that the US Direct Indexing and Smart Beta minimums must be met through cash deposits or assets in your Wealthfront diversified portfolio. Other assets, such as assets you’ve transferred to Wealthfront via a brokerage account transfer and which are still being sold or diversified, cannot be used to meet this minimum as those assets can not be used to purchase individual stocks until their sale is completed.
Note that Smart Beta is not available in standalone direct indexing products S&P 500 Direct and Nasdaq-100 Direct.
Minimums for Wealthfront’s direct indexing products
| Smart Beta | US Direct Indexing | S&P 500 Direct | Nasdaq-100 Direct | |
| Minimum | $500,000 | $100,000 | $5,000 | $5,000 |
What if my account balance goes below the minimum?
If market movements cause your account balance to fall below $50,000, or if you make a withdrawal that causes your account balance to fall below $90,000, we will do the following:
- Sell the individual stocks used to implement US Direct Indexing and purchase VTI to represent US stocks.
- Maintain Tax-Loss Harvesting, as it has no minimum balance requirement.
US Direct Indexing or Smart Beta will remain active if your account balance stays above $50,000 when reductions are driven by market movements, or above $90,000 when driven by a withdrawal.
I transferred securities to Wealthfront from an outside account. Does that affect whether I qualify for US Direct Indexing or Smart Beta?
It might. If you have transferred assets to Wealthfront and we haven’t diversified them yet, we will not apply US Direct Indexing and Smart Beta strategies until your diversified portfolio value exceeds $100,000 or $500,000, respectively.
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The information contained in this communication is provided for general informational purposes only, and should not be construed as investment or tax advice. Nothing in this communication should be construed as a solicitation or offer, or recommendation, to buy or sell any security.
Tax-Loss Harvesting benefits vary depending on the client's entire tax and investment profile. The performance of new securities purchased may be better or worse than those sold. The strategy could introduce portfolio tracking error, meaning the portfolio's performance might slightly diverge from its intended benchmark. There may also be unintended tax implications. Wealthfront does not provide tax advice. Consult a tax professional for your specific situation.
Wealthfront Advisers and its affiliates do not provide legal or tax advice and do not assume any liability for the tax consequences of any client transaction. Clients should consult with their personal tax advisors regarding the tax consequences of investing with Wealthfront Advisers and engaging in these tax strategies, based on their particular circumstances. Clients and their personal tax advisors are responsible for how the transactions conducted in an account are reported to the IRS or any other taxing authority on the investor’s personal tax returns. Wealthfront Advisers assumes no responsibility for the tax consequences to any investor of any transaction.
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