Wisebanyan's Dollar Dilemma: Exploring The Power Of Micro-Investing

WiseBanyan is a free robo-advisor service that requires no minimum initial investment. You can start investing with as little as $1, making it an excellent option for those looking to dip their toes into investing without paying any fees. The platform offers a range of account types, including taxable investment accounts, Roth IRAs, traditional IRAs, rollover IRAs, and SEP-IRAs.

WiseBanyan constructs portfolios across different asset classes, focusing on diversification to minimise fees and tax consequences. They utilise Modern Portfolio Theory (MPT), which aims to generate the highest returns possible for a given level of risk.

While WiseBanyan does not charge any trading commissions, transaction fees, or rebalancing fees, there are fees associated with certain actions, such as paper monthly statements and closing an IRA account. Additionally, they now charge a 0.24% management fee for balances above $500.

Overall, WiseBanyan is a good option for those seeking an easy entry into investing without incurring high costs.

WiseBanyan is now Axos Invest

WiseBanyan, a robo-advisor, has been rebranded as Axos Invest following its acquisition by Axos Financial, a large nationwide financial institution, in 2019. Axos Invest continues to provide financial planning services without any fees or minimum balance requirements. However, it now charges a 0.24% management fee for balances above $500, a shift from WiseBanyan's previous policy of not charging any management fees.

The acquisition of WiseBanyan by Axos Financial reflects the increasing competition in the market as larger incumbents enter the fray. Axos CEO Greg Garrabrants highlighted the potential for expanding the range of services offered to clients, including retail and high-net-worth investors, registered investment advisors, and strategic partners.

The integration of WiseBanyan into Axos' digital banking platform enhances the accessibility and convenience of financial services for customers. Axos Invest offers personalized, automated investment portfolios, catering to both hands-on and hands-off investors. The investment process at Axos Invest involves determining investor preferences and building a recommended portfolio of ETFs across different asset classes. The investment team at Axos employs the Modern Portfolio Theory (MPT) to maximize after-tax returns while minimizing fees and tax consequences.

While the rebranding brings changes in fees and ownership, the core investment philosophy of diversification, low fees, and passive investing remains intact. Axos Invest continues to provide a valuable service for individuals seeking a straightforward and low-cost entry into investing, particularly those with taxable accounts who can benefit from the Tax Protection package.

$1 minimum to begin investing

WiseBanyan is a robo-advisor that provides automated, algorithm-driven financial planning and investment services. It is a free service that requires no minimum initial investment—users can start investing with just $1 in their account.

Robo-advisors are digital platforms that provide financial planning and investment services with little to no human supervision. They ask users questions about their financial situation and future goals through an online survey and then use the data to offer advice and automatically invest for the user.

WiseBanyan works by asking users a series of questions to determine their preferences as an investor and then building a recommended portfolio of exchange-traded funds (ETFs) in different asset classes. The portfolio is designed to maximize after-tax, real investment returns while providing a personalized approach based on individual investor preferences.

WiseBanyan's investment strategy focuses on Modern Portfolio Theory (MPT), which provides the framework for combining securities in a portfolio to generate the highest returns possible at a given level of risk. This is achieved through diversification—the process of building portfolios with asset classes and securities that move independently of each other.

WiseBanyan's portfolios are fully automated, from investing funds to monitoring progress and reinvesting dividends. The service is ideal for those who want to invest without paying for an actively managed account. It is also a good option for first-time investors looking for free services and low minimum balances.

While WiseBanyan does not charge any management fees, there are fees for the funds themselves. WiseBanyan uses low expense ratio funds with fees ranging from 0.03% to 0.13%. There is also the option to add premium packages for additional fees, such as the Tax Protection Package, which includes features for tax-loss harvesting.

No annual fee

WiseBanyan is a free financial advisor and investment management service. It is the first of its kind, and it has no minimum initial investment requirements. The company was acquired by Axos Financial in 2018 and was rebranded as Axos Invest in 2019.

WiseBanyan's services are free of charge, with no annual fee, trading commissions, transaction fees, or rebalancing fees. The company uses automation to keep customer expenses to a minimum.

However, there are fees for funds. WiseBanyan uses low expense ratio funds with fees ranging from 0.03% to 0.13% or 0.69%, depending on the source. The average fee is 0.12% per year.

In addition, WiseBanyan offers premium packages for additional fees. These include the Tax Protection Package, the Fast Money Package, and the Portfolio Plus Package. The Tax Protection Package is aimed at those with taxable accounts who need tax-loss harvesting. It costs 0.24% annually, capped at $20 a month. The Fast Money Package costs $2 per month, while the Portfolio Plus Package costs $3 per month.

WiseBanyan also charges nominal fees for certain actions, such as $5 for a paper monthly statement and $10 for closing an IRA account. Wire transfers cost $25 for domestic and $50 for foreign transfers.

With no annual fee, WiseBanyan offers a low barrier to entry for those interested in trying out digital investing. The minimum deposit required to begin investing is just $1, making it an attractive option for new investors seeking an easy entry into investing.

Free rebalancing

WiseBanyan is an online portfolio advisory service that claims to be the world's first free financial advisor. It offers a range of services, including free portfolio management and financial planning, with no advisory, trading, or custodial fees. One of its key features is free rebalancing, which is included in all accounts.

With WiseBanyan, your account will be automatically rebalanced whenever you deposit or withdraw money, or earn dividends. This helps to keep your portfolio aligned with your financial goals and can minimize tax consequences. Additionally, if your portfolio strays beyond 5% from your target allocation, it will be automatically rebalanced to get it back on track.

The free rebalancing feature is particularly beneficial for investors who want a hands-off approach to managing their investments. It ensures that your portfolio stays within the strategic bounds you specified during the onboarding process. You can also change your milestones and risk tolerance settings to adjust your investments over time.

WiseBanyan's investment strategy is based on Modern Portfolio Theory (MPT), which focuses on diversification and aims to generate the highest returns possible at a given level of risk. They construct portfolios using exchange-traded funds (ETFs) from different asset classes, emphasizing those with low expense ratios.

While WiseBanyan offers free rebalancing and other core services, they also provide optional premium packages, such as the Tax Protection Package, which includes tax-loss harvesting for taxable accounts. These premium packages are how the company generates revenue to sustain their free services.

Tax Protection Package

WiseBanyan's Tax Protection Package is an optional premium service that enables you to put your funds on the fast track to your goals. It is a package that you will select for IRA accounts as well as for WiseHarvesting for non-retirement accounts.

The package includes three features that can be activated to help save money at tax time: tax-loss harvesting, selective trading, and IRA conversions. Tax-loss harvesting, or WiseHarvesting, involves selling losing assets to generate losses and reduce capital gains tax on winning asset positions. Selective trading is for those with multiple investment accounts, helping to prevent "wash sales", which is when you sell or trade a security and buy an identical one within 30 days, which has negative tax implications. Finally, IRA conversions, or "backdoor IRAs", involve transferring funds from a traditional IRA to a Roth IRA each year for potential tax savings.

The package costs 0.24% annually, capped at $20 a month, with a co: 0>$10 annual minimum per IRA.

Frequently asked questions