I wrote briefly about WealthFront recently, and appreciated the comments made here as well as emails and conversations and comments elsewhere. It's cheap for a reason, and that reason is simplicity and very basic marketing and operating plan. It assumes that the capital asset markets ARE priced correctly all-in at every instant and that most attempts to predict are fruitless. So they want to put clients all into the markets all at once no matter what relative asset valuations may now be. This is obviously geared to a very young investment client audience which is a good idea both for the client and the marketer, but not for mature clients.
Another real issue is with their ETF selections. Using a commodity ETN is silly, dangerous, and has been widely criticized. They don't wish to deal with K1's so they are avoiding the single best and most tax-advantageous ways to buy actual commodities, such as the Deutsche Bank futures ETFs or, best of all, GCC (Greenhaven). (Van Eck also has three classes of a commodity mutual fund, but they don't fit into an ETF world, are expensive, and are hard to buy.)
Likewise, using Vanguard's Total Bond Market BND is not well thought out for such a large portion of most portfolios. It's a fine fund, and quite cheap, but it is far too heavily weighted to US Treasuries which are about in the position that stocks were in 1929. Bonds are too subtle and too complex and varied to use a "cap-weighted" index. A much, much, much better ETF would be Pimco's BOND which is very similar to Bill Gross's flagship PTTRX Total Return Fund.
The concept of an inexpensive packaged management system has great allure for us all. WealthFront has competitors now and will have a lot more in the future who will do it in a more sophisticated and profitable manner than the current lineup.