- Commissions and Fees
- Account Minimum
- Investment Options
- Ease of Use
If you’re into the stock market and investing, then you might have heard of WiseBanyan. WiseBanyan is a robo-investing platform that sets itself aside by offering up some basic functions for free. Free sounds good, but does WiseBanyan really stack up? Read our review to find out.
WiseBanyan is a robo-investing platform that sets itself apart by offering basic investment and portfolio management functions for free. The service launched in 2014 under CEO Herbert Moore and has since attracted more than 25,000 users with $170 million in assets under management. While these numbers represent impressive growth, WiseBanyan is still among the smaller robo-investing platforms, in part because it does not offer the same range of investment accounts and financial products as competitors like Betterment, SoFi, or Wealthfront.
How WiseBanyan Works
WiseBanyan is an automatic investment and portfolio management platform that will be highly familiar to anyone who has used competing platforms like Betterment, Wealthfront, Acorns, or Wealthsimple. Investing begins with a series of questions used to determine your financial goals and risk tolerance, and WiseBanyan offers a portfolio of different asset classes based on your responses. Underlying these asset classes are a core of low-cost ETFs into which your money is invested, and your portfolio is automatically rebalanced as the value of your ETFs change and dividends are reinvested. As for other automated investing platforms, setting up milestones – goals like saving for a home or college tuition – is simple and fast.
What sets WiseBanyan apart from its competitors is the platform’s pricing structure. There is no annual account fee for standard individual investing accounts, like there is for almost every robo-investor except SoFi. Instead, you only pay for “premium” add-ons, like access to customize which ETFs you are invested in and tax-loss harvesting at the end of the year.
Keep in mind that WiseBanyan account offerings are more limited than for other automated investing platforms. You can only open an individual investing account or an individual IRA (traditional, Roth, or SEP). There are no options for joint investing accounts, like for Twine, or for business retirement accounts.
WiseBanyan account requirements are relatively minimal, which is an advantage for anyone who only has a small amount of cash to start investing. Opening an individual investment account requires a $1 minimum to start and there are no additional minimums to open an IRA account – but you must have an individual investing account first. Creating milestones also requires a $1 minimum per milestone, and investing minimums are $10 at a time.
WiseBanyan is currently only available to US citizens.
WiseBanyan Pricing and Fees
WiseBanyan is truly free for individual investing accounts, which is extremely impressive considering the automated investing tools included with every account. Most of the ETFs that WiseBanyan invests your money in are low-cost Vanguard and iShares ETFs, with an average cost basis of 0.12% that is on par or less than most competing robo-investing services.
IRA accounts, on the other hand, are not truly free and come as part of the Tax Protection premium service. This service costs 0.02% per year, capped at a maximum of $20 per month – still roughly one-tenth of the management fee that most other robo-advisors charge. In addition to adding an IRA to your account, this plan includes tax harvesting and the ability to remove specific ETFs from your WiseBanyan holdings.
The FastMoney premium package costs $2 per month and includes the ability to get instant deposits to your account and, important for many users, to set recurring deposits. This package also automatically ensures that your bank account has enough cash before making transfers so that you never get charged overdraft fees.
The Portfolio Plus package costs $3 per month and gives you expanded access to ETFs, as well as lets you pick and choose what ETFs and asset classes your portfolio is invested in. The expanded list of ETFs includes ETFs for specific industries and sub-sectors, including blockchain, oil and gas, sustainable energy, healthcare, and many more.
Finally, the newly introduced Teamwork package allows you to add a partner to your account and to setup shared milestones with varying contribution levels. However, WiseBanyan does not advertise the cost of this package.
WiseBanyan Platform and Tools
WiseBanyan’s web and mobile apps are relatively straightforward to use, although like other automated investing platforms tools for detailed analysis of your investments are scarce.
Initially choosing your asset allocation is simple thanks to a few multiple-choice questions and a risk slider that scales from 1-10. Users can adjust this risk slider and easily see how it changes the allocation of stock versus bond holdings in your portfolio.
The main display of WiseBanyan gives you an account overview with a broad stokes chart of your investment return. While it’s possible to see how your portfolio is allocated among asset classes, there is no way to dive deeper into exploring how particular ETFs or asset classes are faring compared to the broader market. Thankfully, since WiseBanyan uses established ETFs rather than a custom mix of stocks, it is possible to do your own research in Morningstar or a similar platform.
Creating milestones is simple and takes only a few clicks. However, keep in mind that unless you pay for the FastMoney premium package, you’ll need to make deposits towards these milestones manually.
WiseBanyan does not self-report average user performance, which makes it hard to gauge how this robo-advisor stands up to competitors. The picture is further complicated by the fact that different asset allocation mixes will have differing performances. That said, some users report annual gains in the realm of 3-5% over the past several years – comparable to many other robo-advisors, but far lower than the S&P 500’s annual growth over the same timeframe. It’s possible that WiseBanyan’s investments are relatively conservative by default and that investors who take advantage of the expanded ETF list available through the Portfolio Plus package will see greater returns in exchange for more risk.
The primary differentiator between WiseBanyan and other automated investment platforms like Betterment and Wealthfront is that WiseBanyan doesn’t charge any annual management fees for individual investing accounts. That’s an enormous money saver over the long run for frugal investors, and investors will be happy to note that WiseBanyan keeps built-in costs low by investing in relatively low-cost ETFs. It’s worth noting that competitor SoFi also offers free automated investing with even lower-cost ETFs, albeit with a less proven track record and a higher account minimum.
It’s important to note that investors who are looking for more than just an individual investing account will have to pay at least a little bit. However, WiseBanyan’s 0.02% management fee for IRA accounts (capped at $240 per year) is still just one-tenth the cost of most other popular automated investors. While adding options for joint account management and additional ETF choices can increase the cost of WiseBanyan for low-dollar investors, the costs of these services are still relatively low for investors who have more than a few thousand dollars in assets under management.
WiseBanyan is newer and smaller than many better-known automated investors, but that doesn’t mean that investors have any reason to distrust the platform. Investments are backed by SIPC protection and it’s easy to transfer money in and out of WiseBanyan at will.
Who is WiseBanyan Best For?
WiseBanyan is best for money-conscious investors in need of a low-cost automated investing solution. WiseBanyan offers virtually everything that other robo-advisors like Betterment and Wealthfront do, but at a lower cost. Even paid IRA accounts cost a fraction of what other automated investment platforms charge, which can save a huge amount of money over the course of decades of saving for retirement. The ability to add a partner to your account, albeit at an added cost, makes WiseBanyan suitable for couples, and access to additional industry- and value-specific ETFs makes WiseBanyan a good option for conscientious investors as well.
- Free automated investing and portfolio management for individual investing accounts
- Extremely low-cost IRA accounts (0.02% capped at $20 per month)
- Portfolio Plus package ($3 per month) allows access to industry- and value-specific ETFs
- $1 account minimum
- Straightforward web and mobile apps
- No business retirement accounts or specialized investing accounts
- Difficult to gauge performance of the ETFs you are investing in