WiseBanyan Review

WiseBanyan bills itself as, "The World's First Free Financial Advisor", and provides free algorithmic advisory services through its Las Vegas domicile. Rather than charging an upfront management fee for your account, WiseBanyan gives you the option of adding on pay features if needed. Some of these features seem more like necessities that have been removed, such as the ability to have an individual retirement account (IRA), but an investor can get a lot for free in a taxable individual account. Client funds are held by the Apex Clearing Corporation, although the fine print states that WiseBanyan Securities, Inc. provides brokerage services.

WiseBanyan will accept taxable funds and/or retirement rollovers held at other institutions at the time of setup or you can deposit directly into a new account. A $1 minimum deposit required to open an account with no management fee. You will, however, incur any costs generated by account transfers.

Important Updates

WiseBanyan’s current ownership status is more confusing than it has to be. An October 2018 FAQ entry states that San Diego’s Axos Financial, Inc. will be acquiring WiseBanyan, with a 45-day expected closing date. However, there are no posted updates on the acquisition as of August 2019, which is confusing. Adding to the confusion, an October prospectus at the Axos site disclosed the company is acquiring “certain assets” rather than the entire operation. However, the August 6, 2019 update to the WiseBanyan ADV 2A indicates that the sale was completed in March 2019 and the corporate structure was updated in July 2019 with Axos Financial, Inc. ultimately owning all of WiseBanyan. So, it appears that the FAQ needs an update at the very least.

Account Setup

Account setup with WiseBanyan is simple and quick. You enter an email into the site and receive an invite that allows you into the account setup pages. Then the site collects your birthday, your annual income, and an estimate of your net worth. This is the start of the profile that is used to select among recommended portfolios. From there, you choose from four sample milestones/investment goals including “Rainy Day” (emergency fund), “Save Cash” (short-term purchase), “Retirement”, and “Custom” (everything else). Once you pick your goal/milestone, WiseBanyan asks you for a target dollar amount and a target date for you’ll need the money. Next, you are given a choice of four risk tolerances for the portfolio ranging from loss avoidance to aggressive growth. This is followed by specific questions about risk tolerance and a choice of portfolio contents ranging from all cash to just stocks and bonds.

The system then generates a recommended portfolio for you with asset allocations displayed as slices of a circle chart. You can click for details on the exact percentage allocation amongst asset classes in the portfolio, but at this point, none of the actual exchanged-traded funds (ETFs) are displayed. You can play with the recommended portfolio, moving a slider up and down through the risk levels to see how it impacts the portfolio but not any projected returns.

When you are satisfied with the allocations, the next step is to enter your initial deposit amount and projected monthly deposits. After this, it is time to enter your personal details and fund the account. The robo-advisor supports individual taxable and retirement accounts. Although an October 2018 FAQ refers to a coming add-on called Family Accounts that allows you to work with a partner and fund UGMA/UTMA accounts, you can’t currently open joint or household accounts. WiseBanyan taxable accounts cannot use margin or borrow from the account and they offer no banking services. WiseBanyan pays no interest on cash in the account while charging a $2/month premium through the Fast Money add-on to quicken the pace of cash movement through the account.

Lastly, WiseBanyan doesn’t permit you to open an IRA account without first funding a taxable account. It’s hard to understand the logic for this procedure, other than its capacity to pad active account numbers.

Goal Setting

Most of WiseBanyan’s goal-setting support comes as part of the milestone selection and setup. Pulling from your profile, WiseBanyan makes recommendations throughout to guide you in achieving the stated investment goal. For example, if you have selected retirement, the system will make some basic assumptions based on your current income and suggest a target amount. This filters down to a suggest monthly contribution once you have defined your initial deposit. There are similar nudges for other milestones based on the likelihood of achieving the goal with the recommended portfolio and the initial deposit. There are some additional resources through a blog with relevant articles, but this isn’t the same as having more robust tools in the actual platform.

As far as goal tracking, WiseBanyan doesn’t offer overt tools for this purpose. You can, of course, review your monthly transactions and relative performance statistics on the account management page. However, this interface offers little input about funding levels or portfolio mix, leaving decision-making in your hands. Moreover, you don’t have the option to speak directly with a company analyst or advisor about your portfolio. This lack of ongoing tracking against stated goals may lead clients to look elsewhere for that level of support.

Account Services

WiseBanyan offers some account services that are standard in other robo-advisors as account add-ons. The Teamwork premium add-on allows two parties to share milestones but not capital in an attempt to overcome the limitations of individual accounts. Adding a beneficiary requires a request through email and cannot be done through the account management interface. As mentioned, the add-on description for Teamwork refers to a family joint account, which the October 2018 FAQ entry states is “coming soon,” but there’s no evidence of the upgrade in August 2019. The requirement to pay for add-ons that are included in other offerings can be jarring, but it is part of why WiseBanyan can market its basic offering as fee-free.

Making deposits to your account requires logging into the account management page and making a request that’s sent to a linked bank account. The Fast Money add-on can automate this for a fee, of course. Withdrawals can be requested with a few clicks on the account interface but fund receipts take five to seven business days, which is slower than industry average.

Portfolio Contents

WiseBanyan follows the same Modern Portfolio Theory (MPT) principles that almost all robo-advisors adhere to. The stated investment philosophy follows four guidelines:

• The value of diversification
• Keeping fees as low as possible
• The value of passive investing
• Modern practices and automation

However, the Investment Strategy page contains mostly generalizations and little specific strategic information, hiding actual buying and selling metrics behind an opaque black box. Some robo-advisors offer a much deeper look at their methodology when it comes to filling your portfolio. WiseBanyan’s brief narrative states the recommended portfolio of ETFs using different asset classes will be constructed to maximize "after-tax, real investment returns" with a "personalized approach." Portfolio management is then accomplished through automatically monitoring each step of the process. Disclosures dated in July 2017 provide a list of 60 or so ETFs that are traded through the robo-advisor, but it isn’t clear if this list of securities is accurate and up-to-date. An FAQ on ETF fees lists tickers from the usual suspects of Vanguard, Schwab, and iShares, among others.

Portfolio Management

WiseBanyan’s account management interface presents standard performance metrics that detail up-to-date portfolio results, broken down by pre-chosen milestones. The updated ADV 2A states that your portfolio is rebalanced periodically, but the actual parameters for this are not laid out. You cannot request rebalancing and cannot make changes to ETFs picked for the portfolios without signing up for a Portfolio Plus Package add-on. Similarly, tax loss harvesting requires entry into the Tax Protection premium add-on service, with a monthly fee of 0.02% of the account value up to $20. Various account views display current market value, earnings, time-weighted rate of return, net deposits, dividends, and harvested losses if enrolled in the paid add-on.

User Experience

Mobile Experience

WiseBanyan offers a decent mobile experience, with a mobile-ready and easy-to-read website as well as iOS and Android versions of the account management interface. Biometric unlocking is available for iOS—but not Android—and two-factor authentication adds to high-security levels in the website and mobile apps. There’s no support for other operating systems.

Desktop Experience

The website cites the advantages of automated investing and free asset management but it’s mostly a marketing effort, providing few metrics or quantitative details. The account setup process is straightforward but site disclosures don’t allow new clients to review the advisory agreement until they get deep into the process. Secondary fees are easy to find through the FAQ, which has to be read in detail because other site sections provide little clarity on the company or its authenticity. Finally, many web pages display 2017 copyrights, raising doubts about current methods and procedures.

Customer Service

WiseBanyan has a lot of room to improve in customer service. The lack of a contact page is startling, compounded by a FAQ that also had no contact information. A trip to the FINRA site was required to find the company’s state and address because it wasn’t posted anywhere on the website. Initial account entry sends a reply with email and phone number, and that content is repeated at the bottom of the setup pages. The site has no live chat for prospective or current clients.

Multiple phone calls to the New York listed number during regular market hours elicited a recording that stated no one was available and recommended that an email inquiry be sent. The recording also stated that messages left at the number would be answered in one business day, which is inadequate for a financial organization holding client funds.  

Education & Security

WiseBanyan’s client resources are adequate—providing mobile apps for iOS and Android tools. That said, there is a concerning lack of recent content across the site, suggesting that the educational portal is no longer being supported.

WiseBanyan uses 256-bit SSL encryption at the site and provides a clearly-stated privacy policy. Apex Clearing Corporation holds all client funds, providing access to Securities Investor Protection Corporation (SIPC) insurance and excess insurance. The website features an educational blog with multiple articles but the lack of up-to-date materials suggests the portal is no longer being supported.

Commissions & Fees

WiseBanyan doesn’t charge you an asset management fee, instead seeking to make money through add-on services that include self-management of portfolios, tax optimization, quicker cash disbursement, and partnership capacity. The business model suggests the advisor also gets payment for order flow from Apex Clearing but there’s no disclosure on their legal relationship, which is another major omission. Despite that, there is no denying that WiseBanyan is the cheapest robo-advisor option for a standard taxable account. 

Is WiseBanyan a Good Fit For You?

WiseBanyan provides an interesting and cheap approach to automated portfolio construction and management but red flags lower confidence in their handling of client funds. Nearly all site materials are generalized, disclosures are weak, and the lack of customer service commitment may extend into other company activities. In addition, the robo-advisor’s current status is confusing, with the October 2018 acquisition still pending despite the promise to provide regular updates.