The bottom line: Axos Invest offers a unique pricing model that will appeal to new investors looking for basic portfolio management, but the added costs for tax-loss harvesting and IRA management are worth noting before you sign up.
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Compare to Other Advisors
Axos Invest — formerly WiseBanyan — makes a compelling case to potential clients, calling itself "the world's first free financial advisor." The robo-advisor charges no account management fees, though customers still pay the expenses charged by the investments used within their portfolios.
If there's a drawback, it's that Axos Invest charges for some services that at other robo-advisors are part of the all-in management fee, including access to an IRA account. We'll outline how these costs surface below.
Axos Invest is best for:
Investors seeking free management.
Investors with low balances.
Individual taxable investment accounts.
Axos Invest at a glance
Account management fee
No fee for basic account; premium services cost extra.
Investment expense ratios
0.12% average on core portfolio ETFs.
$75 ACAT transfer out fee, $25 outgoing wire fee; $10 IRA closing fee (no fee to close non-IRA accounts).
Core portfolio includes 21 ETFs. For $3 a month, customers can opt into Portfolio Plus to access additional ETFs and build a custom portfolio.
• Individual nonretirement accounts. • Roth, traditional and SEP IRAs.
Tax loss harvesting available for 0.24% of total account value with a cap of $20/month.
Free on all accounts.
Human advisor option
Goals-based planning tools and milestones to help clients reach financial goals.
Savings account/cash management account option
Customer support options (includes website transparency)
Phone and email support Monday - Friday, 7a.m. to 5 p.m. Pacific.
Where Axos Invest shines
No account minimum: Well, actually, there's a $1 minimum required to open an account, which means anyone with enough spare change in their pocket can take advantage of Axos Invest’s free advice and portfolio management. Another plus for those investing small amounts at a time: Investment minimums are only $10. The firm buys fractional shares, meaning your money is invested immediately instead of sitting idle in cash until you've got enough to purchase full shares.
Free management: A big draw of robo-advisors is that they offer financial advice and management for much less than a human financial advisor charges; around 0.25% to 0.50% of assets managed is typical. But few offer their management services completely free, especially regardless of account balance. Axos Invest is one of the few. (SoFi Automated Investing is another.)
A natural follow-up question: How does the company make money? In Axos Invest's case, it's through paid add-on products and premium services that let customers optimize their accounts through tax-loss harvesting and tailor their portfolios by accessing an expanded list of exchange-traded funds. Those products are:
Tax Protection Package: This service costs 0.24% of our account balance per year (which Axos Invest lists as 0.02% per month), with a cap of $20 per month and a minimum charge of $10 annually per IRA. For this fee, you'll receive tax-loss harvesting, access to IRA accounts and Selective Trading, which allows you to deactivate specific ETFs from your account. Axos Invest will replace deactivated ETFs with similar ETFs. To be clear, in order to open an IRA with Axos Invest, you must purchase the Tax Protection Package.
Fast Money Package: This package costs $2 per month and includes Flexible Auto-Deposit, which allows you to select specific frequencies or days for auto-deposits into your account; Quick Deposit, which enables deposits to be completed the same day and invested the next trading day; and overdraft protection, which allows Axos Invest to check your linked bank account to ensure sufficient funds before a transfer, potentially eliminating overdraft charges from your bank.
Portfolio Plus Package: For $3 per month, those who opt into this package have access to dozens of additional ETFs and can create completely custom portfolios or choose from an expanded list of pre-existing portfolios.
Investments: Like many robo-advisors, Axos Invest’s investment philosophy is based on modern portfolio theory. The company automatically creates a portfolio for each client by asking a few questions. Those questions lead to a “risk score” that helps build a recommended portfolio of ETFs, weighted to reflect the amount of risk the investor is willing to accept. The company says clients can increase or decrease their risk scores, and the investment recommendations will automatically update to reflect the change.
Axos Invest’s core ETF portfolio is similar to that of other robo-advisors. The funds the company draws from carry an average expense ratio of 0.12% and cover U.S., international and emerging market equities; U.S. government and corporate bonds; short-term high-yield bonds; Treasury inflation-protected securities; and real estate. Many of the ETFs are from Vanguard and iShares.
Investors who want to customize their portfolios can opt into Axos Invest's Portfolio Plus Package.
Goals-based investing: Much like fellow robo-advisors Betterment, Ellevest and Motif Investing, Axos Invest takes a goal-based approach to help investors create buckets for their money, called "milestones." Users tell the service their goal, time horizon, income and net worth, and Axos Invest will calculate a recommendation for how much should be invested toward that milestone. Investments can be auto-deposited separately into each milestone’s individual portfolio. Users can also adjust Axos Invest’s recommended asset allocation for each milestone via a bar slider.
Two other noteworthy free features:
The Partner feature allows twosomes to set, track and save for milestones together. The robo then calculates projections based on your combined holdings and contributions. Both of you must be Axos Invest customers and your funds are kept in separate brokerage accounts.
The free Formulas feature (available only with taxable investment accounts, not IRAs) lets users quickly take advantage of opportunities to direct additional funds via a linked bank account toward investing goals. It's like an optimized version of investing on autopilot. For example, you can set it to deposit matching funds for any dividends your investments pay. Or if an investment drops in value, creating an opportunity to purchase extra shares "on sale," you can set a formula to automatically buy more.
Where Axos Invest falls short
Account selection: Axos Invest customers can open only individual taxable accounts or traditional, Roth or SEP IRAs. That’s a short list of choices, and it limits the number of clients who will be able to take advantage of the company’s free service. You can’t, for example, open a joint taxable account with your spouse, as you can at other robo-advisors and brokers, and you can't open a trust or a custodial account for your children.
Mandatory IRA fees: The main place where Axos Invest's "free management" promise doesn't quite ring true is with IRA clients, because they have to opt into the Tax Protection Package at a cost of 0.24% per year. There is a minimum charge of $10 per year, per IRA account, and a maximum charge of $20 per month.
The same is true for clients with taxable accounts who want tax-loss harvesting, also offered through the Tax Protection Packaging. Opting for that service makes Axos Invest's fee on par with other robo-advisors that don't take an a la carte approaching to pricing, including Betterment and Wealthfront, which both charge 0.25% per year.
Confusing product and pricing structure: It's difficult to wade through how much Axos Invest's various paid services will cost you. There is variation in how fees are assessed — some paid add-ons are charged as a flat monthly fee; others a percentage of your account balance — and various caps and minimums. Several premium offerings here are standard issue at most advisors.
Is Axos Invest right for you?
Axos Invest is a solid choice for investors looking for low-cost management (completely free for a basic taxable investment account) as well as some goal-based guidance. But the company's "free management" slogan doesn't apply to everything: IRA customers are subject to a 0.24% annual fee (capped at $20 a month, with a $10 per year minimum for each IRA), which is on par with other low-cost robos. Other services require additional fees. Before you sign on with any advisor, be sure you understand what you're paying and how much of your account balance will go toward fees each year.
Dayana Yochim contributed to this review.