Why Your Rich BFF's Vivian Tu Recommends Wealthfront

The popular influencer likes Wealthfront's platform. She's also getting paid to recommend it.

For those thinking about investing for the first time, one of the most common questions is where to start. Ex-Wall Street trader Vivian Tu answers this question often on her advice channel, Your Rich BFF. She recommends new investors use the robo-advisor Wealthfront.

Wealthfront can be a great option, especially if you're looking for a hands-off way to invest. To help you decide if it's right for you, let's look at how it works and why Tu is a fan.

How Wealthfront works

Wealthfront is a robo-advisor -- an investment platform that automates parts of the investing process for you. Instead of needing to choose investments yourself, robo-advisors figure out how to invest your money.

When you sign up for an account with Wealthfront, you go through a questionnaire to let it know your goals and risk tolerance. It uses the information you provide to decide the right asset allocation for your portfolio. For example, if you're young and looking to maximize your returns, Wealthfront will build a more stock-heavy portfolio with growth potential.

After you set up your account, it requires very little work on your part, which is one of the perks of robo-advisors. You simply make an initial deposit and decide how often you want to transfer more money to your Wealthfront account. There is a small 0.25% annual management fee for Wealthfront's robo-advisor services.

Why Vivian Tu recommends Wealthfront

In a video, Tu provided three reasons why she recommends Wealthfront:

• She likes its platform.
• It's a partner of hers.
• She thinks robo-advisors are great for beginners.

To be clear, since Tu is a partner of Wealthfront, she's paid to post content promoting it. Many companies pay financial influencers, or "finfluencers," to do this. Tu's upfront about this, as she discloses that she's partnered with Wealthfront in her videos. And although she recommends Wealthfront, her social media channels aren't devoted to selling people on it. She provides personal finance advice, not sales pitches.

So, should you use Wealthfront? If you're looking for a robo-advisor that manages your portfolio for you, it's an excellent choice. It received high marks in The Ascent's Wealthfront review, it's user-friendly, and its fees are reasonable.

However, there are quite a few robo-advisors available, including some with no management fees. Before you sign up, check out the top robo-advisors to compare their features. You may end up using your investment account for decades, so it's worth taking your time to find the right one.

You might not need a robo-advisor

Tu says robo-advisors are great for beginners, which is true. They're easy to use and save you a lot of time, since they do your investing for you. If you set up automatic transfers from your bank to your robo-advisor account, you won't need to do anything outside of reviewing your investments periodically. They also cost much less in fees than you'd pay for a human investment advisor.

But there are other ways for beginners to invest. Robo-advisors primarily invest in index funds and exchange-traded funds (ETFs) that contain a large number of securities. You could also research fund options yourself, choose one or more that you like, and invest a set amount in them per month. Many investors go this route, and it allows you to build a good portfolio without paying management fees for a robo-advisor.

If you've seen some Your Rich BFF videos and wondered if Wealthfront is worth using, it's a quality robo-advisor. It's not the only game in town, though. There are other robo-advisors with just as many benefits that you may want to consider. Or, you could always research ETFs and pick out investments yourself.