Wealthfront launches custodial account with tax-gain harvesting

Wealthfront Corporation (Nasdaq: WLTH) announced the launch of a custodial account product, expanding its family wealth management offerings. The account requires a $500 minimum deposit and carries an annual advisory fee of 0.25%.

The account includes an automated Tax-Gain Harvesting feature, which the company claims is designed to reduce a child's future tax burden by realizing up to $1,350 in gains annually at a 0% federal tax rate, then reinvesting in replacement ETFs to raise the investment's cost basis. The account has no contribution caps and no early withdrawal penalties. Parents retain control until the child reaches the state-mandated age of transfer, typically between 18 and 25.

To mark the launch, Wealthfront is offering $100 in seed funding to clients who open and fund either a new custodial account or a 529 Education Savings Plan between June 23 and July 23, 2026, with deposits completed by August 23, 2026.

"Compounding over time is one of the most powerful ways to grow wealth, and parents who start investing early for their kids' futures can give them a meaningful head start by taking advantage of up to an extra 18 years of market growth," said David Fortunato, CEO of Wealthfront.

According to Wealthfront internal data, clients identified as parents hold an average of $91,000 across their investment accounts, compared with approximately $27,000 for those without children. Clients who held a 529 account between June 2021 and June 2026 doubled their average balance from $30,000 to $60,000 over that period.

The company noted the account is intended as an alternative for parents whose children do not qualify for Section 530A accounts, also known as Trump Accounts, which are offered through the U.S. Department of the Treasury. Wealthfront does not offer Trump Accounts.

Contributions to custodial accounts are irrevocable and become the property of the beneficiary. The accounts may affect financial aid eligibility, as they are weighted more heavily than parental assets in financial aid formulas.

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