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WiseBanyan Review

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by Nina Semczuk Updated
WiseBanyan

With tagline, “investing should be a right — not a privilege,” WiseBanyan positions itself as the free investment management option. The company’s mission is to provide investment services with no hidden fees. 

You may enjoy using WiseBanyan if you’re just starting to invest as the minimum is only $1. You can have any size account and still enjoy free robo-investing, something that’s unmatched by any other robo-advisor that we’ve reviewed. 

Those with more investing experience may want a company with a larger fund portfolio or more add-on services. WiseBanyan offers one premium package aimed at those with taxable accounts who need tax-loss harvesting. 

Best for

Free services and low minimums; new investors seeking an easy entry to investing

Drawbacks

Smaller fund portfolio compared to some competitors; only one premium service package offered

Pricing: How Much Does WiseBanyan Cost?

Option Name Management Fee Minimum Balance Features
Basic Free Account None $1 Low expense ratio securities, automatic rebalancing, financial planning tools, mobile app, auto tax integration with three tax preparers
Tax Protection Package 0.24% annually capped at $20 a month $1 WiseHavesting (tax-loss harvesting), selective trading and IRA conversions

Basic Free Account

Management Fee
None
Minimum Balance
$1
Features
Low expense ratio securities, automatic rebalancing, financial planning tools, mobile app, auto tax integration with three tax preparers

Tax Protection Package

Management Fee
0.24% annually capped at $20 a month
Minimum Balance
$1
Features
WiseHavesting (tax-loss harvesting), selective trading and IRA conversions

WiseBanyan carves a major advantage in the robo-advisor space by not charging any fees. Your account comes with no trading commissions, transaction or rebalancing fees, but best of all, no annual fee. This means if you want to try out digital investing, the barrier to entry is very low. It also helps that the minimum deposit is $1, rather than the $500 to $5,000 minimum deposit some companies require. Another unique feature to this company is no scaling up with larger accounts. Some companies will charge a higher annual percentage fee as you increase the size of your accounts. Not so with WiseBanyan – your account stays free for the duration that it’s open. The company uses automation to keep customer expenses to the absolute minimum. 

While your account is managed for free, there are fees for funds. WiseBanyan uses low expense ratio funds with fees ranging from 0.03% to 0.13%. If you want an exact breakdown of each fund’s fee, you can look at the frequently asked questions page on WiseBanyan’s site.

At the moment, WiseBanyan has one premium package that will cost you money. The Tax Protection package will cost roughly 0.24% annually, capped at $20 a month. This optional add-on service has three features you can activate to help save you money come tax time. The first is tax-loss harvesting, which the company renames as WiseHarvesting. The next is selective trading for those with multiple investment accounts and the third is IRA conversions for more tax savings. All of the options within the premium package can benefit more experienced investors who have taxable accounts. If you’re content with a free account, you won’t experience a huge negative impact for not opting for these premium options. 

Certain actions will cost a bit of cash for every account, such as $5 per paper monthly statement and $10 for an IRA account closing. Electronic funds transfers (one bank to another) are always free at WiseBanyan, but wire transfers will cost $25 for domestic and $50 for foreign. If you opt to receive a check you’ll pay $5. You can find the entire list of fees under the fee section of the frequently asked questions page. 

WiseBanyan’s Investing Strategy

WiseBanyan constructs portfolios across different asset classes. The company operates on an investment philosophy of four pillars: diversification, low fees, passive investing and early investing for all clients. Each portfolio is tailored to the specific customer. That means if you indicated that you had a lower risk tolerance, your automated portfolio will support that choice. Same goes with a higher-risk-tolerant client, WiseBanyan would choose different security allocations. Each portfolio will have passively managed exchange-traded funds (ETFs) that are selected from over 1,400 ETFs.

WiseBanyan Pie Chart

Your account includes free rebalancing as well. Each time you deposit money, withdraw funds or earn dividends, your portfolio will be rebalanced. And if your portfolio strays beyond 5% from the target allocation, it will be rebalanced. Rebalancing helps keep your account on track for your financial goals (what WiseBanyan calls milestones) and can help minimize tax consequences.  

You can change your stock and bond allocation whenever you create or edit a financial milestone by using the site’s bar slider. You can’t add or remove ETFs or stocks on your own. Robo-advisors relieve you of the day-to-day management of investments, but that means you have to stay somewhat hands-off. You won’t have the option to get into the nitty-gritty, you can only change milestones and risk tolerance to change your investments.

WiseBanyan has five types of accounts to choose from: taxable investment accounts, Roth IRAs, traditional IRAs, rollover IRAs and SEP-IRAs.

Supported Accounts

  • IRA
  • Roth IRA
  • SEP-IRA
  • Rollover IRA
  • Individual taxable accounts

Unsupported Accounts

  • 401(k)
  • Transfers
  • Joint Accounts
  • Trusts
  • 529 college savings

Key Features

WiseBanyan’s most unique feature is its free services. You just can’t beat the price of free, especially if you’re new to investing. All the features of paid accounts with other companies, such as no trading fees, free rebalancing and financial planning tools come at no cost to the customer. Free rebalancing means when your account strays more than 5% from the investment strategy you indicated in the milestone onboarding process, assets will be bought or sold to push your account back into track. WiseBanyan does this service with every transaction as well, such as withdrawals and deposits, so that your account is actively kept within the strategic bounds you specified.

For those who select the Tax Protection Plan, you can pick and choose which features you want activated for your account. You have WiseHarvesting for saving money on taxes for your investment account and selective trading, as well. This feature is only for taxable accounts and will help turn losses in your portfolio into tax deduction opportunities. 

Selective trading is your next option within this premium package. This will let you remove ETFs in other investment accounts from trading in your WiseBanyan account. This helps prevent something called wash sales, which is when you sell or trade a security at a loss and buy an identical one within 30 days. Wash sales have negative tax implications which the selective trading feature helps minimize. 

The last feature is an IRA conversion, also known as a “backdoor IRA.” With an IRA conversion you transfer funds from a traditional IRA to a Roth IRA each year for potential tax savings. 

Another feature is WiseBanyan’s financial planning site titled “All the Wiser,” which launched June 2017. This service is free to all customers – it’s not reserved for premium package clients. The site helps potential clients learn how to choose financial milestones and provides self-education for those trying to learn more about investing with WiseBanyan. There’s also a section called “Heroes,” that has personal stories to help you relate to money issues in a more intimate manner. 

The robo-advisor is available through its mobile app as well. You can complete actions such as deposits, transfers and withdrawals through the app as well as keep an eye on your accounts and milestones. 

Available Features

  • No Trading Fees
  • Portfolio Rebalancing
  • IRA Conversion
  • Tax-Loss Harvesting
  • Fractional Shares

Unavailable Features

  • Human Advisors
  • Additional Features at a Fee
  • Limited Customer Service

Who WiseBanyan Is For

The digital-savvy service positions itself as an unintimidating way to get started with online investment and retirement accounts. As long as you’re at least 18 years old and a resident of the U.S. or Puerto Rico, you can start investing. While the no-fee service can be attractive for any savings-savvy consumer, the company seems aimed at millennials. There’s a blog and the company’s newly launched service called Planning. It’s positioned to help those new to personal finance with four stages: getting started, building your foundation, removing risk and increasing efficiency.

Similar to other startups, you can earn money for referrals, with $20 credited to each account when you share a code with friends and family. The mobile app is simple and easy to use as well, another indicator of the ideal WiseBanyan audience.

While the service seems a natural fit for a younger, investment-uninitiated audience, it’s perfect for anyone who wants to invest without paying for an actively managed account. And if you want to get started with the lowest amount, $1, you can do so with the same suite of services available to you.

WiseBanyan Interface

How WiseBanyan Services Works

When you’re ready to open an account, you’ll create a login with your name and email. After that you’ll be walked through an investment plan, which WiseBanyan advertises as only taking minutes.

You’ll need to provide some personal information including date of birth, annual income and net worth. Then you’ll choose your milestones, which translate to financial goals. Some of these milestones include rainy day emergency fund, wealth building and retirement. To determine your portfolio, WiseBanyan will ask what type growth you’d like. Aggressive growth will come at a higher risk with any investment account, so keep that in mind as you answer the onboarding questions. At the end of the short process, you’ll see the recommended allocation of securities. You can always move the slider toward more stocks or more bonds depending on what you want, it’s not set in stone.

After that it’s time to fund your account through an electronic transfer from an external bank account. You’ll need your bank’s information including routing and account number. Once the initial deposit has been made and your account is up and running, you can monitor and change milestones online or through the mobile app. You can transfer money in as you please, or you can schedule automatic deposits. 

When tax season rolls around you’ll be able to use the robo-advisor's tax integration features that include software integration with companies such as TaxAct, H&R Block and TurboTax

What’s the Catch?

If you’re already a smart investor, you may not see the point of using this service. The catch is that you may not make the best portfolio returns compared to an active advisor. You won’t pay fees for this service, which means it’s best for the passive investor. If you want someone trading on your behalf each day with a larger variety of securities, this isn’t the service for you. You can’t pick and choose stocks or take an active hand in managing your account. The most you can do is change your milestones and change the percentages of stocks and bonds. WiseBanyan is also squarely in the digital space. The site doesn’t list a phone number, and as of mid-2017, doesn’t include a chat feature. This means if you can’t find an answer online through the frequently asked questions or blog, or if you just want to speak to a human, you may be out of luck.

The other potential downside is that the company is a relative newcomer in the robo-advising business. You can’t find portfolio performance for WiseBanyan on its site unlike Wealthfront or other companies who have been around longer.

Competition: How WiseBanyan Stacks Up?

For a company that offers its services for free, WiseBanyan is not a bare-bones option. It offers many of the same features as paid robo-advisors, such as rebalancing and a mobile app. And despite tax-loss harvesting only included with the paid account, it beats Fidelity Go which doesn’t offer that service.

Your account options, while not the most robust, do include retirement choices and a taxable account. You can even get a SEP-IRA, which is something Fidelity Go doesn’t offer its customers. Wealthfront and Betterment do offer SEP-IRAs along with additional account options like trusts and 529b plans, but you’ll pay for services with those companies.

If you are looking for the cheapest option, WiseBanyan is your best bet. Schwab Intelligent Portfolios is another free option, but you will need $5,000 as your account minimum. With WiseBanyan, you can have any amount without being charged a fee, unless you opt to pay for a premium package.

Betterment is another robo-advisor that offers a no-account-minimum plan like WiseBanyan. However, Betterment charges a management fee from the get-go. Another option is Wealthfront: it charges a flat 0.25% fee across all accounts but you do need $500 to open an account.

If you have a large amount of money and want features such as direct indexing or tax-loss harvesting, you may prefer Wealthfront, which offers those services for accounts over $100,000. You’ll still pay the 0.25% advisory fee, but your investment account will automatically have direct indexing and tax-loss harvesting available. In contrast, you could have that amount of money in a free WiseBanyan account. But, if you wanted tax-loss harvesting, you’d need to pay the Tax Protection package fee of 0.24%, which doesn’t include direct indexing.

Choosing a robo-advisor to invest your money with can be a hard choice. Each company offers slightly different services and pricing factors, which means you have to shop around carefully before committing. One piece of advice that you’ll see across every robo-advisor is that it’s important to start investing as soon as possible, even with a small amount of money. 

 

Robo-Advisor Management Fee  Minimum Balance  Best For
Free $1
  • First-time investors looking for free services and low minimum balances
 
0.35% $5,000
  • Existing Fidelity customers or hands-off investors
 
  0.25%   $500
  • Investors with smaller sums to invest
  • Investors who don’t need a human advisor

 

Bottom Line: Should You Use WiseBanyan?

WiseBanyan may be the perfect fit if you want to dip your toes into robo-advising without paying any fees. You get many of the same benefits other online investing companies offer without having to pay for it. WiseBanyan can be a win-win for the passive investor who would otherwise leave money in an unmonitored savings or retirement account. While you can’t find what the robo-advisor’s average returns are yet, you can feel secure knowing that the company uses the same modern investment modeling portfolio strategy of many actively managed accounts. 

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