Two robo-advisors with unique strategies for growing investors’ wealth, Titan and Wealthfront are premiere apps with tons of potential for making money. For investors looking for automated ways to grow their money over time, we would recommend both of these apps. But which do we think will help your portfolio grow the most?
The Facts:
Titan:
- Founded in 2018
- Founders: Clayton Gardner, Joe Percoco, and Max Bernardy
- Tradable assets: stocks, crypto coming soon
- Available in the U.S. only
- Fees: $5 per month for portfolios below $10,000, 1% AUM for portfolios over $10,000, $100 minimum deposit
- Mobile and desktop availability
Wealthfront:
- Founded in California in 2008
- Founders: Andy Rachleff and Dan Carroll
- Tradable assets: U.S. stocks, foreign stocks, emerging markets, dividend stocks, municipal bonds, real estate, natural resources, treasury inflation protected securities (TIPS), government bonds, emerging market bonds, and corporate bonds
- Available in the U.S. only
- Fees: 0.25%, minimum of $500 in the Investment account
- Mobile and desktop availability
The Basics: Titan
Titan approaches the world of robo-advising with one goal: bring the powerful financial tools of Wall Street to the average person. They do this by offering three different stock-management accounts: Flagship, Opportunities, and Offshore. Below, we’ll go into the details of each.
Titan’s founders were frustrated with the lack of opportunities given to everyday investors. By bringing the power of Wall Street to the average person, more people can make money through smart investing. Using hedge fund tactics and tracking the filings actual hedge funds make, users can even make money in a market downturn with Titan.
Flagship: Mix of 15-25 large-cap U.S. stocks. Market cap of $500 billion. Only a $100 deposit.
Opportunities: Mix of 15-25 small to mid-cap U.S. stocks. Market cap of $9 billion. Must have $10,000 in your account.
Offshore: Mix of 15-25 international stocks. Market cap of $157 billion. Must have $10,000 in your account.
But know that these are not ETFs—they are individual stocks that the company invests in for you. Users essentially get a few pieces (or many, if you’re working with a lot of money) of all the best stocks in the market.
Titan got some publicity for shorting the market just before it crashed due to Covid-19. One of the major advantages of Titan is that they use shorting tactics, such as buying inverse ETFs, to make money for their users when the market is dipping.
The Basics: Wealthfront
Wealthfront is a different type of robo-advisor from Titan. They offer more assets and highly personalized investing strategies that help individuals achieve specific financial goals. Users take a risk assessment, which gives them a risk score from one to ten. Then, the robo-advisor takes this into account and uses it to direct investments.
Wealthfront is all about goal setting. Users identify their goals, such as saving for a house, going on a dream vacation, or planning for retirement. Wealthfront then employs their algorithm to determine how much needs to be saved and where to put your assets so you can reach those goals within that time frame.
Wealthfront has access to tons of asset classes, possibly the most of any robo-advisor available in the U.S. today. U.S. stocks, foreign stocks, emerging markets, dividend stocks, municipal bonds, real estate, natural resources, treasury inflation protected securities (TIPS), government bonds, emerging market bonds, and corporate bonds are all available on the platform.
Image: Titan wants to bring better tools to all its investors, so anyone can invest like they’re on Wall Street. Titan has seen extremely high returns, even in market downturns like the Covid-19 pandemic. Image from titan.com.
Invest Like a Hedge Fund
Making money in a bull market can be relatively easy, but making money in a bear market is not. Titan seeks to help individuals make money no matter the market conditions. Hedge funds, which “hedge” money so their investors don’t lose money when the market dips, are only available to investors who have a net worth of $1 million or $5 million in assets, so the bar to entry is incredibly high.
All Titan accounts “hedge” your money for you, or offer downside protection just like hedge funds. This essentially means that they will short the market when they believe it’s going down.
APY Guy wrote out this useful chart explaining how much of your portfolio will be dedicated to shorting based on the risk tolerance you select:
- Conservative: 10% of your funds go to the short
- Moderate: 5% of your funds go to the short
- Aggressive: None of your funds go to the short
However, if your portfolio is decreasing in value, Titan will allocate more funds to the short across all risk tolerances (roughly 5%). Your money is not locked up in Titan—you can withdraw it at any time.
Follow the Path
The Path section of Wealthfront is a great tool for planning how much you need to save. Simply set a goal and a timeframe, and Wealthfront uses third party data, such as house prices in your area or average college tuition costs, to determine exactly how much you need to save to get there. We like this feature because it’s more than a broker—it’s an analyst that helps users determine how much they really need to save from real, hard-and-fast data, not just assumptions.
You can get highly specific data from the Path section, such as the exact neighborhood you can afford to buy a house in and the year you’re on track for retirement. Then, once you decide which goals you’re going for, Wealthfront will automatically rebalance your portfolio and make the best investments based on its algorithm for you.
Image: The core philosophy of Wealthfront is that, with the right technology, anyone can become an investor. With their personalized portfolios, your money can grow the way you want it to without more risk than you’re willing to take on. Image from wealthfront.com.
High Returns from Titan
Titan has extremely high returns. They delivered a whopping 44.42% return in 2020, compared to the S&P 500’s return of 18.39%. We are very impressed with how much Titan can grow your money.
Because of these exceptional returns, it makes sense that Titan offers retirement accounts as well. Invest the minimum of $500 in either a Traditional or Roth IRA managed in the Titan hedge-fund-like style.
Tax Loss Harvesting
One of the major distinguishing features of Wealthfront is tax-loss harvesting. Wealthfront sells some securities at a loss so you don’t have to pay as many capital gains taxes. According to their website, their tax loss harvesting strategy ends up paying for 96% of users’ platform fees.
A pioneer in this field, we believe that Wealthfront can significantly help you keep more of the money you earn, making it a great choice for investors trying to reduce capital gains taxes.
Image: Wealthfront has top-notch goal setting and planning tools. We believe that planning for your financial future can be much easier with the help of Wealthfront. You can get recommendations as specific and personalized as how much money you need to save each year to buy a home in your exact neighborhood. Image from wealthfront.com.
Borrow What You Need
Investors using Wealthfront can also borrow funds they need to keep their goals on track. Portfolio Line of Credit allows you to borrow up to 30% of your account at interest rates between 2.45% and 3.70% and no credit check or application.
Your cash can come in as fast as one business day, according to their website. This is incredibly fast and easy compared to most other processes of getting a loan.
Titan Crypto
Titan is about to release fully-managed cryptocurrency portfolios. As of July 2021, they only have a waitlist available. With the success Titan’s portfolios have had in the past, we believe the addition of crypto could offer a huge advantage for many investors who want to get into the crypto market but don’t want to manage their portfolios themselves.
Image: Titan is on the way to offering fully-managed crypto portfolios. With the previously high returns of their stock accounts, we see a bright future for Titan crypto. Image from titan.com/crypto.
Cons
One of the pitfalls of robo-advisors in general is that users rarely have access to a human to help them with their finances. Sometimes it is comforting to talk to a financial expert or just know that there’s a person regularly checking up on your investments.
However, robo-advisors consistently outperform human ones.
Cons of Titan
- No tax loss harvesting
- Fees are on the higher side when it comes to mobile brokers, but are significantly lower than actual hedge funds
Cons of Wealthfront
- Returns aren’t as high because it doesn’t use the hedging strategy that Titan uses
Who it’s For: Titan
Titan is best for investors who have a lot of money to work with. Because two out of three of their accounts require a balance of $10,000, investors with smaller amounts of money will find their options to be limited. However, the Flagship offering, which only requires a $100 deposit, is still an exceptional tool that posts massive returns.
Titan is great for investors who want to take advantage of a bear market. It is also best for investors who don’t want to manage their account themselves, since Titan does it all for you.
Who it’s For: Wealthfront
Wealthfront is best for investors planning for the long-term. If you’re trying to reach a particular financial goal or just want help calculating how much money you’ll need to put away each year to save for your childrens’ college tuition, then Wealthfront is a great option.
The tax loss harvesting feature on Wealthfront simply cannot be beat. We like that the platform not only helps you make more money, but it helps you keep more, too.
Individuals looking for loans can also find success on Wealthfront, since you can borrow against your own investments and pay the money back on your own schedule.
Image: Wealthfront’s Borrow feature is a great option for investors who need quick cash but don’t want to go through the long process of getting a loan from a bank. Users can borrow up to 30% off their portfolio and pay it back on their own schedule. Image from wealthfront.com.
Our View
Overall, we believe that Titan will grow your portfolio more than Wealthfront will. But there are other factors that come into play:
We recommend Titan for getting through a bear market and for investors with larger amounts of money, and Wealtfront for investors saving for particular goals and those who want to minimize taxes without having to do tons of research themselves. Wealthfront is also ideal for individuals looking to borrow money.
Titan is a slightly pricer option when it comes to fees, which is another reason it’s better for investors with more money to work with.
Both platforms are great, and we believe you can use them in conjunction. We recommend trying both to see which one better fits your needs, but believe that they will both grow your portfolio. However, Titan has historically posted higher returns.
Q&A
Is Titan legit?
Yes, Titan is a safe and secure platform. They are SIPC insured and hold assets at a third party, Apex Clearing.
Is Wealthfront legit?
Yes, Wealthfront is a safe and secure platform. They are SEC regulated and SIPC insured.
Does Titan have crypto?
As of Summer 2021, they have a waitlist for their fully-managed crypto portfolios. Their crypto portfolios will launch sometime in the next few months.
Does Titan have retirement accounts?
Yes, Titan offers Traditional and Roth IRAs. They use their same hedge-fund tactics with these accounts.
Where is Titan available?
Titan is available to U.S. investors only.
Where is Wealthfront available?
Wealthfront is available to U.S. investors only.
Is Titan a hedge fund?
No, Titan is not a hedge fund. However, they use hedge-fund-like strategies to help investors grow their wealth even in a bear market.
Is Titan a good investment?
Yes, we believe that Titan Invest can help you make a lot of money, even in a market downturn, due to their advanced hedging strategy. We always recommend diversifying your assets and trying different tools to find what works best for you, however.
Is Wealthfront a good investment?
Yes, we believe Wealthfront has many advanced tools that can help you make a lot of money. Their tax loss harvesting feature minimizes the taxes you have to pay on capital gains, and offsets the management fee for using the platform.
What are Titan’s fees?
Titan’s fees are generally on the higher side, but compared to most elite hedge funds, Titan is a great deal. Users pay $5 per month for portfolios below $10,000 and 1% AUM for portfolios over $10,000. There is a $100 minimum deposit.
What are Wealthfront’s fees?
Wealthfront users pay 0.25% of their portfolio per year. There is a minimum of $500 in the Investment account.
Is Titan good for beginners?
Yes, Titan can be a good option for beginners depending on how much money they’re working with. Titan manages your wealth for you, so users don’t have to worry about watching the markets or making risky moves. Titan’s fees are higher than many other mobile-first platforms, however, and some of their accounts require a minimum of $10,000.
Is Wealthfront good for beginners?
Yes, Wealthfront is a great option for beginners because it manages your money for you. Wealthfront is a robo-advisor, so the platform makes investments and minimizes taxes for you. This makes it great for beginners because investors truly have to do almost nothing to make their wealth grow.
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