WiseBanyan Review 2019

The following review will deep dive into the pros and cons of WiseBanyan - one of the main reasons why robo-advisory services became so popular in recent years.

In the next few paragraphs, you will find out what are the main benefits of setting an account with one of the first companies to offer such a revolutionary investment methodology.

The WiseBanyan review goes through the platform’s features, costs and investment strategy.

It aims to help you learn more about the benefits of robo-investing services, as well as ease the process of finding out which is the best solution according to your needs and how to make the most of your capital.

WiseBanyan | First free financial advisor

As the company claims on its website, it is the “world’s first free financial advisor”.

WiseBanyan was founded back in 2013 with the aim of tackling the idea of making the investment process universal and “app-based”.

​Or in other words – the firm is focused on providing investors with a more personalized, yet automated and easier way to invest.

​One of the main pillars of WiseBanyan’s business, as they claim, is to bring the investing process closer to the people, describing it as “a right, not a privilege”.

In order to achieve that, WiseBanyan tackle the high account minimums and trading costs that are typical for the services offered by many of their competitors, by providing free-of-charge investing and account minimum requirement of just $1.

While going through its website, you will find it interesting how the company tries to distinguish itself from its competitors by focusing solely on the number of clients they serve, instead of the assets-under-management.

In fact, WiseBanyan claims that AUM are just an indicator of the amount of money companies earn from their clients.

That is one of the reasons why the firm is widely-renowned for its personal and client-centered approach.

However, in the way it works, WiseBanyan is no different to its competitors (Betterment, Wealthfront, etc.).

See also: Is Betterment safe?

As the core investment concept is based on algorithms analyzing users’ information and providing investment solutions, tailored to their goals.

What it does differently is to provide individuals with as little as $1 (for taxable accounts) the opportunity to invest free-of-charge.

As it is the case with all robo-advisory services, it is normal to wonder is WiseBanyan safe.

The truth is that it is a SIPC insured company which is also registered with the SEC and FINRA.

This means that all cash up to $250 000 and securities up to $500 000, held in clients’ accounts on the platform are protected by SIPC.

WiseBanyan’s Investment Strategy

One of the main factors that should influence one’s decision on which robo-advisor to delegate his funds to, is the employed investment strategy.

With WiseBanyan, things are pretty straightforward – once you become a client, you will be asked to answer a brief questionnaire in order for the platform to accurately identify your profile and preferences.

WiseBanyan Investment Strategy

By taking into account factors such as preferred time horizon, money saved and risk aversion and with the main goal of maximizing after-tax investment returns, the advisor will then tailor a recommended ETF portfolio, diversified in various asset classes.

The investment and rebalancing processes are entirely automated.

Just like most of the other robo-advisors, in the core of WiseBanyan’s investment strategy is the Modern Portfolio Theory.

Although the investment approach is based on diversification and well-tailored asset allocation, it puts more weight on ETFs with lower expense ratios.

This is all because WiseBanyan aims at achieving reasonable returns while at the same time keeps the investment costs as lower as possible.

The asset classes that WiseBanyan invests its users’ capital in are mostly ETFs, provided by Charles Schwab, iShares and Vanguard.

The offered ETFs are with a very broad exposure – from US, emerging markets and foreign stocks, through corporate and government bonds, to REITs (for a full list of the offered ETFs, check here).

However, a notable downside here is the fact that the platform does not provide enough ETFs to invest in if you set up a regular taxable account, which leaves a lot to be desired.

For the more advanced investors, WiseBanyan offers premium packages that provide features such as tax protection (WiseHarvesting and IRAutomation), fractional shares, selective trading, quick deposits, overdraft protection, as well as the opportunity to build a custom portfolio (Portfolio Plus).

WiseBanyan’s Fee Structure

A proper WiseBanyan review cannot miss out looking at the company’s fee structure. This is the factor that really makes WiseBanyan stand out from its competitors.

The company does not charge you any trading fees. However, trading is not entirely free as investors should cover the costs associated with the ETFs in their portfolios.

Here are some details on the fees (for more information, check the company’s official fee structure): 

  • ​Management fees – 0%
  • ​Rebalancing fees – 0%
  • ​Account minimum (taxable accounts) – $1
  • ​Account minimum (IRAs) - $25
  • Average expense ratio – 0.12%
  • Outgoing wire fee – $25
  • IRA closing fee - $10
  • ACAT transfer out fee - $75
  • Tax-loss harvesting – 0.24% of total account value (or $20/month)

Another advantage of WiseBanyan is the low investment minimum of just $10 which makes it easier for individuals who prefer investing small amounts on a regular basis.

This is possible thanks to the fact that the advisor buys fractional shares.

That way, your funds are invested immediately and you are not obliged to wait until you have the full amount needed to buy a certain asset.

WiseBanyan’s Portfolio Plus service, however, comes at a cost.

If investors want to take advantage of additional ETFs and be able to create their own custom portfolio or choose from ready-made portfolio scenarios, they will have to subscribe for the package at the cost of $3 per month.

Who is WiseBanyan Best for?

WiseBanyan is a great choice for beginner investors or individuals who are seeking a user-friendly, yet cost-efficient goal-based robo-advising solution.

The chance to receive goal-based guidance and track the progress towards achieving your goals, as well as behavioral nudges, are wonderful features to take advantage of, no matter whether you are a beginner or a professional investor.

The platform is suitable also for investors who put primary focus on commission-free professional money management.

Automate Your Achievements With WiseBanyan

WiseBanyan is also a very good alternative for investors with low initial balances and individuals who cannot afford investment capital worth thousands of dollars per month.

With the low investment minimum and the $1 initial account balance requirement, the platform is a great choice for those who want to be introduced to the world of financial markets in an easy and affordable way.​

The fact that the platform’s basic features are totally free, means that it is suitable for anyone, no matter whether they plan on investing $10 or $10 000 000.

The robo-advisor is often preferred by couples who want to set and track milestones for money-saving together.

Instead of downloading additional apps, developed specifically with that goal, WiseBanyan offers a great alternative – the Teamwork package.​

Apart from goal tracking, this feature also provides projections that are based on the combined contributions of the users.

In the near future, WiseBanyan is expected to announce a family account option as well, which will make it a great choice for you and your relatives.

Although WiseBanyan is the perfect place for young people and investing newbies to kick-off their financial journey, for more advanced investors, the platform may appear somehow limited.

However, for all those who prefer to build their own portfolio and gain access to thousands of ETFs, the Portfolio Plus service ($3 per month) is more than capable of satisfying the needs of more demanding investors.

However, it is worth noting that WiseBanyan is available only to individuals with a permanent US address and a social security number.

How to Create an Account with WiseBanyan?

WiseBanyan’s users can take advantage of the following accounts:

  • ​Taxable account (the most common one)
  • ​Traditional IRA
  • ​SEP IRA
  • Rollover IRA
  • Roth IRA

Getting started with the platform is similar to all investment solutions on the market.

WiseBanyan’s website is very easy to navigate, with a user-friendly and intuitive interface.

So is the case with the WiseBanyan app (available for iOS and Android), which means that even not-so-technically-advanced users will be able to handle the process easily.

The account setup is very easy also, as it follows a few simple steps.

First of all, you should start with creating an account (username and password) and adding some personal information, such as birth date, net worth, annual income, social security number, etc.

Then you are expected to answer some questions on your risk tolerance, investment goals, etc. for the platform to get familiar with you.

After that, it will walk you through some investment plans and help you activate your milestones – for example, you may choose from general investing, retirement savings, emergency funds and other similar options.

Next, based on the provided information WiseBanyan will make some suggestions and help you decide on the most suitable growth profile, whether it is an aggressive or a more conservative one.

It is worth mentioning that nothing is obligatory – you can take in charge and, by using a slider, tailor the portfolio towards more stocks or more bonds, based on your preferences.

Also, you will be required to input your bank account information and fund your account. The downside here is that it may take up to 2 weeks for the account to get funded.

However, with most users, the procedure is finalized within no more than 5 business days.

Right after the account is funded, the investor gains access to the dashboard that provides more information about his investments.

WiseBanyan Alternatives

In recent years, there was a boom in the birth of robo-advising companies.

However, when it comes to competition, the truth is that WiseBanyan really stands out among the rest in terms of affordability.

The platform has three main competitors – Wealthfront, Betterment and SoFi, all of which are well-known and established platforms.

However, even when compared with these solutions, WiseBanyan appears to be the best choice in terms of free-of-charge investment services.


​WiseBanyan

M1 Finance

​Betterment

​​Wealthfront

​Personal Capital

​Management Fee

​0.0%

​0%

​0.25%

​0.25%

​0.89%

​Account Minimum

​$0

​$100

​$0

​$500

​$100,000

WiseBanyan offers enough features up front to attract young customers and first-time investors.

However, when it comes to offering advanced functionalities and their respective cost, WiseBanyan quickly falls behind its main competitors.

For example, the tax-loss harvesting feature that comes with WiseBanyan’s paid plan is free-of-charge with its competitors (or better said – included in the fees they charge).

It is worth noting, however, that WiseBanyan really stands out as the best choice for investors who want basic features at no costs.

WiseBanyan is often compared with Schwab Intelligent Portfolios – another free robo-advising option that has attracted plenty of interest.

Although it really is a fully-functional, free-of-charge solution, Schwab Intelligent Portfolios requires from its users to deposit a minimum of $5 000 in their accounts, in order to start investing.

Choosing a robo-advisor is not often an easy task due to the fact that different companies offer different services for the fees they charge.

However, this means that there is an option for each type of investor, according to their specific goals, initial capital, fee preferences, investment horizon, etc.

What all robo-advising solutions have in common tough, is the fact that they suggest for you to start invest as soon as possible.

WiseBanyan Review Summary

​Rating

​Overall 4.0

Commissions & Fees

​4.5

​Tools & Ressources

3.5

Investment Options

​4.0

​Asset Allocation

​4.0

​Ease of Use

​3.5

Individuals looking for basic portfolio management services with some algo-driven guidance should look no further than WiseBanyan.

The platform is one of the top choices in terms of cost – quality of the provided service.

The robo-advisor takes into account all relevant information and constructs a well-diversified ETF portfolio which is more than enough for individuals who are making their first steps in the investing world.

For those, who are willing to take advantage of more advanced features and functionalities, WiseBanyan’s Portfolio Plus package is an option worth considering.

For just $3 per month, investors get access to features that are capable of satisfying all their needs, no matter whether they are related to having access to a broad range of ETF instruments, custom portfolio construction, tax-loss harvesting, etc.

However, for those who seek more control over their portfolios and personal guidance from human advisors, it is better to look at other options.

In a nutshell, with its easy set-and-go model, 0% management fees and $1 account minimum, WiseBanyan is the best option for the wide audience.

​Pros

​Cons

​Commission-free investing management

​No human advisors

​Very low initial account deposit requirement

​Not so developed customer service

​Small investments made possible thanks to fractional shares

​Limited choice of ETFs for the basic accounts

​All types of IRA accounts

 

​Automatic rebalancing feature​

 

​Automatic weekly, monthly and quarterly deposits