Axos Invest Review 2021: Pros, Cons and How It Compares

Axos Invest charges a 0.24% management fee and offers more portfolio customization than most robo-advisors offer. Axos lets investors create unlimited milestones to track progress toward multiple financial goals.

In August 2020, Axos Invest restructured its offerings: The company no longer offers free investment management, but instead offers all of its previously Premium features such as Portfolio Plus and tax-loss harvesting for a single annual advisory fee of 0.24%.

Axos Invest is best for:

• Beginner investors.

• Goal-based investing.

• Investors who want to customize their portfolios.

Axos Invest at a glance

Where Axos Invest shines

Inexpensive 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. Axos squeaks under that range with its 0.24% management fee. Yes, that 0.01% doesn’t make too much of a difference, but any money you don’t spend on management fees is money you get to keep.

Customizable 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 exchange-traded funds, 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 Portfolios are similar to those 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 investment trusts, or REITs. Many of the ETFs are from Vanguard and iShares.

Investors who want to customize their portfolios can use Axos Invest’s Portfolio Plus feature at no extra cost. Clients can add or remove 32 investment types and add investments by sector, such as digital security, marijuana, consumer staples and socially minded companies. And while the level of added customization is a great middle ground for those investors who want more control than they'd get with a traditional robo-advisor but don’t want to choose all their own investments themselves, the company states that portfolios constructed from the additional investments available through Portfolio Plus are not recommendations of Axos Invest.

Goal-based 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. Users can also adjust Axos Invest’s recommended asset allocation for each milestone with a bar slider.

Automated investing: The free Formulas feature (available only with taxable investment accounts, not IRAs) lets users quickly take advantage of opportunities to direct additional funds through 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.

Tax-loss harvesting: Tax-loss harvesting, an investment strategy that can help reduce taxes on your investment gains, is available to all Axos Invest customers.

Where Axos Invest falls short

Account minimum: Axos Invest’s old model had a $1 minimum to open an account, but its new model has a far steeper $500 minimum. Several robo-advisors operate with a $0 minimum, making that $500 threshold feel especially high.

Account selection: Axos Invest customers can open only individual taxable accounts or traditional, Roth or SEP IRAs. 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.

Is Axos Invest right for you?