One of the newer online robo-advisory companies on the block, WiseBanyan makes a bold claim as “the world’s first free financial advisor.” It charges no fees for its robo-advisory services, choosing to make money on add-on packages, such as tax loss harvesting and premium portfolio choices, instead. For tax loss harvesting, the company charges 0.24% of assets annually up to $20 a month. The firm charges $3 a month for its Portfolio Plus package, which offers more investment options. For another $2 a month, you can set up customized auto-deposits into your account.
To get started with WiseBanyan, you need to deposit at least $1 and answer some questions about your risk tolerance and goals. From there, you can set as many goals as you’d like, from college savings to an emergency fund to retirement. The software then recommends a portfolio of investments — all low-cost ETFs — you can pick from to choose your desired strategy.
The website is simple and easy to use, and customer service is available from 11 a.m. to 7 p.m. ET Monday through Friday. You can call in with questions, and while you may not reach an advisor initially, your request can be forwarded to an advisor if needed. You also can send an email, and the website features a chat service for members.
Who should consider WiseBanyan
WiseBanyan is a good option for a new investor or anyone looking for a low-cost way to invest and manage a portfolio online. There aren’t a lot of account options — just Individual taxable accounts and IRAs for now — but the company plans to start offering joint accounts and UGMA accounts in early 2019. WiseBanyan offers automatic rebalancing and access to a variety of low-fee ETFs. The site allows you to work toward specific milestones, such as retirement planning, building up a rainy day fund, and buying a home or vehicle.
That said, for someone looking specifically for tax loss harvesting, WiseBanyan’s fees are comparable to other robo-advisors that include it in their service offerings. And anyone interested in including other types of investments in their portfolio or integrating advice for other kinds of accounts — such as 401(k)s — may want to try a more full-featured option.
WiseBanyan fees and features
|Amount minimum to open account|
|Account fees (annual, transfer, inactivity)|
|Tax loss harvesting|
|Tax loss harvesting detail||WiseBanyan offers a Tax Protection package that includes tax loss harvesting, selective trading and automated IRA deposits.|
|Offers fractional shares|
|Ease of use|
|Mobile app||iOS, Android|
|Customer support||Phone, Chat, Email|
Strengths of WiseBanyan
- No basic account fees: Just like it promises, WiseBanyan charges no account fees aside from the expenses of the investments themselves, which are low (the average expense ratio is 0.12%). That’s a big advantage in a field where other companies charge 0.25% to 0.50% for assets under management, depending on the amount.
- Low account minimum: You can open an account at WiseBanyan for as little as $1, so even a beginning investor can get started easily. Compare that to Schwab Intelligent Portfolios, which requires at least $5,000 to open an account, and Vanguard Personal Advisor Services, which requires at least $50,000.
- Automatic rebalancing: When you make a deposit or withdrawal or earn dividends, WiseBanyan’s software examines your portfolio and rebalances it as needed based on the amount of free cash available or asset classes that have drifted off base.
- Investment options: WiseBanyan points its clients toward low-cost ETFs, primarily from companies like Vanguard, iShares and State Street Global Advisors. For another $3 a month, you can gain access to a total of 32 asset classes (up from 10 asset classes with the basic package) so you can better put together a versatile portfolio.
Drawbacks of WiseBanyan
- Tax loss harvesting costs: While many robo advisors offer tax loss harvesting as part of their basic service, WiseBanyan does not — and if you opt in, you’ll pay a monthly fee of either 0.02% of your average account value or $20, whichever is less.
- Limited account options: For now, you can open only a taxable account or a traditional, Roth or SEP IRA. WiseBanyan plans to offer Joint taxable and UGMA accounts, but it also plans to charge for the option of the Joint taxable account. (It isn’t sure what it’ll charge yet.) For now, users can share their goals with each other on the platform, allowing both people to see what kind of progress they’re making toward the same goal, but they can’t work together in the same account — and that functionality might also be fee-based once WiseBanyan offers joint accounts.
- Guidance is a work in progress: Although the site leads new customers through a goal and risk questionnaire to gauge where they hope to go and how soon they hope to get there, the technology does not yet take other assets into account — such as how much they’ve already saved. That can lead to some unhelpful advice on how much a client needs to save in order to reach their goals. The company continues to tweak functionality as customers provide feedback on the service.
Is WiseBanyan safe?
All investments carry risk, and WiseBanyan is a new player in the game, launching in 2014. In late 2018, however, Axos Financial, a nationwide bank with approximately $10 billion in assets, signed a deal to acquire the company. WiseBanyan itself has 25,000 users and $170 million in assets under management, and the company is a member of the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000.
For newer investors looking to save on costs or seeking basic investing functionality with some algorithm-based guidance, WiseBanyan is an economical way to go. The software will suggest a low-cost, balanced, ETF-based portfolio that takes into account your risk tolerance, goals and time horizon, but you also have the freedom to adjust your ratios or go off-plan. Tax loss harvesting and additional portfolio choices are available for a small add-on fee.
If you’re an advanced investor or someone who is looking for more investment choices or hoping for tax loss harvesting as part of a more full-featured package, another robo-advisor, such as Wealthsimple, might be better suited to you.