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Updated on Tuesday, October 20, 2020
Axos Invest, formerly Wisebanyan, is an automated investment platform that recommends tailored portfolios for short- and long-term financial goals. Investments come from a pool of over 1,400 low-cost exchange-traded funds (ETFs). Axos Invest charges a minimal flat annual fee, and offers features like tax-minimization tools and automated rebalancing.
The platform is a solid choice for beginners who desire a hands-off approach, though sophisticated investors might feel constrained by the limited investment and account options.
|Accounts offered||Individual brokerage account, SEP IRA, traditional IRA, Roth IRA|
|Access to human advisors||No|
- What is Axos Invest and how does it work?
- Axos Invest’s investment approach
- Axos Invest fees
- Axos Invest’s features and tools
- Axos Invest user experience
- Axos Invest safety and security
- Is Axos Invest worth it?
What is Axos Invest and how does it work?
Like many of its robo-advisor peers, Axos Invest recommends investment portfolios made up of passively managed ETFs, with asset allocation based on factors such as the investor’s time horizon, risk tolerance and financial targets. Axos Invest offers individual personal investment accounts, SEP IRAs, traditional IRAs and Roth IRA accounts, with automatic portfolio rebalancing.
Axos Invest charges a low, flat annual fee of 0.24% and requires a minimum of $500 to get started. However, unlike some of its competitors, Axos Invest doesn’t provide access to human advisors.
- Low fees: One benefit of Axos Invest is the relatively low advisory fee it charges for its services: 0.24% of your account balance. That’s lower than you would pay for a typical human advisor, and is in line with or slightly lower than some of its robo-advisory peers — Betterment and Wealthfront, for example, charge 0.25%, while Blooom charges $45 per year for its most basic platform, even if you have a very low balance.
- Large selection of ETFs: Axos Invest stands out for its robust offering of low-cost ETFs, which span over 30 asset classes and range from emerging market stocks to U.S. Treasury bonds. Additionally, with its Premium Plus feature, you can select which asset classes are included in your portfolio and their allocation.
- Financial planning services: While Axos Invest does not offer access to human advisors, it still provides customers with a financial planning service called Milestones. With Milestones, you are able to set a financial goal (such as investing for a new home), and Axos will help you reach that goal by providing you with a deposit plan, rebalancing your investments and tracking your progress.
- Tax minimization strategies: Axos Invest features a Tax Protection package that aims to lower your tax bill through three different strategies — tax-loss harvesting, selective trading and IRAutomation. All of these features are included in its basic package.
- Lack of access to human advisors: Axos Invest does not offer a way for consumers to connect with human financial advisors. For people who would like their robo-advisor to provide at least some level of human help, there are other robo-advisors out there that offer this.
- High minimum required: Axos Invest requires a minimum of $500, which is higher than many of its peers. It’s worth nothing that the robo-advisor recently revamped its pricing structure, and previously did not require such a hefty minimum. Axos Invest users who have a balance of less than $500 after Aug. 1, 2020, will incur a $1 monthly fee.
- Limited accounts available: While Axos Invest does feature an array of retirement accounts — such as a SEP IRA, traditional IRA and a Roth IRA — it notably lacks joint brokerage accounts, Coverdell ESA accounts and custodial accounts. If you are looking for a larger selection of account types, other robo-advisors offer more options.
- Confusing structure: At times, Axos Invest seems unnecessarily complex and convoluted — such as offering “premium” features for no additional cost. Additionally, at times, its “milestones” (or financial targets) can be misleading. For example, Axos Invest features a Cash milestone. The money you put toward your Cash milestone isn’t actually invested, and simply remains as cash.
Axos Invest’s investment approach
|Socially Responsible Investing|
Axos Invest uses Modern Portfolio Theory, a popular investing framework that aims to garner the highest returns possible, given a certain amount of risk, to build its customers’ portfolios. Your portfolio’s recommended asset allocation is based on your personal information (such as your income, net worth and risk tolerance), coupled with your time horizon and financial targets.
Upon signing up, Axos Invest will ask you to select a “milestone,” which acts as your financial target. Predetermined milestones you are able to select from include a Rainy Day fund, Saving Cash fund and Retirement fund, as well as the option to completely create a custom milestone.
You can think of Axos Invest’s milestone approach as the robo-advisor’s take on goal-based investing. The milestones come with time horizons, which are used to help determine your portfolio’s asset allocations, with longer-term milestones being invested more aggressively in stocks, while shorter-term milestones will be invested more heavily in bonds. Axos Invest also offers a Glide Path feature, which will automatically rebalance your portfolio as you get closer to achieving your milestone.
Axos Invest’s portfolios are built of ETFs across 32 different asset classes. Investments come from a database of over 1,400 different ETFs that were selected based on their investment focus, tracking error, historical performance and operational efficiency.
The ETFs in your portfolio are passively managed, meaning Axos Invest uses a buy-and-hold strategy in an effort to reap the benefits of the longer-term capital gains rate, as opposed to the higher, short-term capital gains rate. For investors who want more control, Axos Invest also has a Portfolios Plus feature, which allows you to control the types of investments that go into your portfolio and their designated allocations.
For its Core Portfolios, Axos Invest’s asset allocation includes the following broad investment categories:
- U.S. stocks
- Foreign stocks
- Emerging market stocks
- U.S. treasuries
- U.S. short-term treasuries
- High-yield corporate bonds
- Treasury inflation-protected securities (TIPS)
- Real estate investment trusts (REITs)
Additionally, the platform features the following investment categories for its Portfolio Plus package (which is also available for the 0.24% advisory fee):
- Blockchain (stocks)
- Precious metals (stocks)
- Internet innovators (stocks)
- Technology (stocks)
- Consumer staples (stocks)
- Socially minded (stocks)
- Municipal bonds
- Small-cap (stocks)
- Mid-cap (stocks)
- Large-cap (stocks)
- Clean energy (stocks)
- Healthcare (stocks)
- Water (stocks)
- Utility (stocks)
- Home builders (stocks)
- Defense (stocks)
- Artificial intelligence (stocks)
- Digital security (stocks)
- Banking and finance (stocks)
- Wonder Woman (stocks)
- Oil and gas (stocks)
Beginning on Aug. 1, 2020, Axos Invest is offering its Tax Package as part of its standard 0.24% fee. The Tax Package takes a three-pronged approach to minimizing a client’s taxes, including tax-loss harvesting, selective trading and IRAutomation.
- Tax-loss harvesting: Axos Invest uses tax-loss harvesting, and finds ways to turn minor losses in your portfolio into deduction opportunities. Axos Invest says it scans daily for tax-loss harvesting opportunities (as opposed to quarterly or annually) and protects against wash sales. With wash sales, you sell a stock to harvest a loss and replace it within 30 days before or after with a similar stock. If the IRS detects a wash sale transaction, they won’t give you the tax deduction for the loss.
- Selective trading: With selective trading, Axos Invest allows you to withhold certain ETFs you may have in outside investment accounts from being traded, which can help prevent wash sales.
- IRAutomation: Axos Invest’s IRAutomation feature is essentially a suite of tools designed to automate the process of using an IRA as a tax-advantaged way to save for your retirement years. This includes tools that help you manage and maximize your annual contributions and ones that assist you if you are converting from a traditional to a Roth account.
Axos Invest fees
- Annual management fee: 0.24% of your account balance
- Investment expense ratios: Average fund fee of ETFs in its Core Portfolios is 0.12%
Axos Invest’s flat annual advisory fee of 0.24% is calculated monthly and based on your average account balance of non-cash assets. This fee is automatically deducted from your account.
Additionally, there may be closing fees charged by Apex Clearing, and there is a $75 fee charged by Apex Clearing for transferring securities from your Axos Invest Managed Portfolio account to another brokerage firm. There is also a $10 closing fee on all IRA accounts.
Axos Invest’s features and tools
As noted earlier in this review, Axos Invest also features a Portfolios Plus option in addition to the Core Portfolios offered. With Portfolio Plus, you are able to pick and control the assets you invest in and their corresponding allocation, choosing from a lengthier list of investments across a larger variety of asset classes and sectors. Portfolio Plus allows you to create custom portfolios or to select from a Featured Portfolio crafted by the Axos Invest investment team.
On that list are socially responsible ETFs, including a Wonder Woman fund made up of stocks of companies with a strong history and representation of female leadership; a Clean Energy fund composed of stocks of clean energy companies and a Socially-Minded fund featuring stocks of companies that engage in social justice or environmental initiatives.
Axos Invest’s Fast Money feature allows you to make deposits faster using tools called the Quick Deposit and Auto-Deposit Scheduler. With Quick Deposit, your deposits are made the same day, and if those deposits are put toward non-cash milestones, they will be invested that day or the next trading day. The Auto-Deposit Scheduler allows you to schedule out your auto-deposits.
The Formulas feature is designed to help customers take advantage of unique opportunities that crop up, in order to maximize the money that’s invested. If you select a Formula, Axos Invest will automatically transfer cash to take advantage of such opportunities.
Examples of Formulas offered by Axos Invest include Round-Up, in which cash will be used to top off your milestone each day, and Dividend Match, which matches any dividends earned.
With the Wallet tool, you can stash away cash to help reach your milestones through the Formulas tool. You link your Wallet to your bank account, and it essentially acts as a savings account, where you can transfer cash to power your Formulas, either through one-time deposits or recurring deposits.
Another hallmark feature of Axos Invest is that it automatically rebalances your portfolio when your allocation moves by 5% or more. While this isn’t a revolutionary concept with robo-advisors, it is still a nice feature to take advantage of. Axos Invest says that instead of selling your ETFs when rebalancing, it first aims to use your dividends and deposits — which is a nice added bonus, as it could lower your tax bill.
Axos Invest user experience
Axos Invest has a website and an app that works on iOS and Android. The company prides itself on its user-friendly interface, which is apparent in the app. On the iOS app, for example, you can view a snapshot of all your current milestones and your progress on them on a single screen, as well as pie charts that show the asset allocation of your portfolios.
Support for Axos Invest is available by emailing [email protected], as well as by phone Monday through Friday (8 a.m. PST to 4 p.m. PST) at 888-585-4965.
Axos Invest safety and security
- SIPC Protection
Axos Invest does offer Securities Investor Protection Corporation (SIPC) protection, in which a nonprofit corporation created by U.S. Congress covers up to $500,000 per client (including a $250,000 limit for cash) if the brokerage firm enters bankruptcy.
Additionally, Axos Invest says your information is encrypted and securely stored, and features two-factor and one-time password login security.
Is Axos Invest worth it?
By using a goals-based approach to investing, offering a variety of financial planning tools and having a low annual advisory fee, Axos Invest could be a good option for people who are new to investing.
However, its $500 minimum could alienate new investors who want to invest just a small sum of cash to start. Additionally, sophisticated investors who want to invest in more than just low-cost ETFs (such as individual stocks, futures and options) will want to look elsewhere.
Alternatives to Axos Invest
|Account minimum||Annual fee||Accounts offered|
|Axos Invest||$500||0.24%||Individual taxable brokerage account, SEP IRA, Roth IRA, Traditional IRA|
|Betterment||$0||0.25%||Individual taxable brokerage account, joint taxable brokerage account, Traditional IRA, Roth IRA, SEP IRA|
|SoFi Automated Investing||$1||$0||Individual taxable brokerage account, joint taxable brokerage account, Traditional IRAs, Roth IRAs, SEP IRAs|
Axos Invest vs. Betterment
Axos Invest and Betterment are highly comparable. Both allow you to invest in a recommended portfolio based on your own financial needs and targets, charge a low annual advisory fee, feature portfolios consisting of a diversified mix of ETFs and take a goals-based approach to investing.
However, for its most basic, Digital package, Betterment does not require a minimum deposit, making it more accessible to investors. Also, unlike Axos Invest, Betterment offers a separate package with a higher annual fee that includes a number of premium features, including access to a CFP. For people who want to make sure they will have access to an actual human expert, Betterment is the better fit.
Axos Invest vs. SoFi Automated Investing
SoFi Automated Investing’s product shares many similarities with Axos Invest, as it takes a goals-based approach to investing and automatically rebalances your portfolio. However, it provides all of these services without charging a management fee — unlike the 0.24% charged by Axos Invest.
Additionally, for those who want to take a more hands-on approach to investing, SoFi Automated Investing is the better option. Along with its automated investing option, it also offers an active investing route — meaning you will have the ability to buy and sell stocks on your own (and even actively purchase fractional shares of stocks and ETFs) at no additional trading costs.
All information included in this profile is accurate as of 10/20/2020. For more information, please consult Axos Invest’s website.