Who Should Choose Axos Invest Managed Portfolios
If you’re already a customer of online banking powerhouse Axos Bank and in the market for automated investment management, you should take a hard look at Axos Invest.
Even if you don’t currently have an Axos account, though, you may want to consider its robo platform for managing a well-diversified, low-fee investment portfolio with a plethora of customization options. Users can choose from more than 30 investment themes and a variety of strategy-oriented featured portfolios. At other robo-advisors, you might pick from two or three themes.
But despite all of the flexibility it offers, Axos Invest Managed Portfolios suffers from what can be a frustrating user experience, especially in a landscape flush with user-friendly startups like Betterment and Wealthfront.
If you want to consult with a financial advisor as part of your robo experience, you’re also out of luck. In that case, you’ll be better off with platforms like Betterment, SoFi Automated Investing or SigFig.
How Axos Invest Managed Portfolios Works
Like all robo-investors, Axos Invest Managed Portfolios recommends a diversified portfolio of exchange-traded funds (ETFs) based on your responses to a questionnaire gauging your annual income, net worth, risk tolerance and investment time horizon.
Where it stands out, though, is that even at this stage it assesses your goals. From the get go, Axos requests that users choose one or more investment goals, such as retirement, a large purchase or building an emergency fund. After setting up a goal, you can rename it as well as create additional ones, a feature that’s not always available at competing robos.
Axos Invest Managed Portfolios recommends a more conservative or aggressive asset allocation based on the information you provide, but you can adjust this as well as some of the contents of the portfolio through the platform’s Portfolio Plus and Featured Portfolio features.
Choosing from a menu of more than 30 different strategies, including socially responsible investing and dividend investing, and nine alternative portfolios, users can more closely align their goal-based portfolios with their values and interests. This level of personalization is quite rare in the robo-advisor world.
Once you’ve settled on a portfolio, Axos Invest’s user dashboard provides a clear view of your goal portfolios, future projected growth scenarios—best- and worst-case scenarios—plus allocations and recent transactions. While generally helpful, the dashboard does also make it a bit challenging to uncover the specific ETFs that are held in each portfolio, which may be frustrating for some users.
Axos Invest Managed Portfolios only available for a limited range of account types:
You cannot currently open joint accounts, custodial accounts or SEP IRAs.
Axos Invest Managed Portfolios Fees and Costs
Axos Invest Managed Portfolios charges an annual management fee of 0.24% of total assets under management. This is a smidgen less than the 0.25% management fee charged by leading competitors like Wealthfront and Betterment.
There is no minimum balance requirement to open an account. However, accounts with balances of less than $500 are charged a $1 per month fee.
The underlying ETF expense ratios average a very low 0.09%. These will be automatically deducted from your investment returns almost anywhere you invest, but they’re still worth keeping an eye on as some can be drastically higher than others, which can shortchange your investment returns.
Axos charges you $40 to liquidate an IRA, though there are no account closing fees for individual taxable brokerage accounts. Users who transfer funds to another firm are charged a $75 fee.
How Axos Invest Managed Portfolios Invests Your Money
The platform invests your money using the standard robo-advisor playbook: Portfolios are built from diversified, low-fee stock and bond ETFs from the likes of Vanguard, iShares and SPDR. The percentage of a user’s overall balance allocated to different funds depends upon their risk tolerance and timeline.
The initial questionnaire helps Axos Invest assign users one of five risk levels, from conservative to aggressive. An aggressive allocation, for example, would be geared toward strong growth, with an asset allocation of 73% to stocks and 27% to bonds in our evaluation of the platform.
Below we outline the aggressive allocation Axos provided during our evaluation, although it’s worth noting that most basic portfolios should include similar asset classes with varying allocations, depending on risk tolerance.
You can personalize your Axos Invest Managed Portfolio in one of two ways: by supplementing your recommended portfolio with a themed ETF or by replacing it entirely with a new themed portfolio.
Portfolio Plus allows users to customize their portfolios by adding niche ETFs. Sample customization categories include:
- Wonder Women adds companies with more women in leadership roles.
- Digital Security includes companies in the cybersecurity field.
- Clean Energy adds companies that produce energy from solar, wind and other renewable sources.
- Mid Cap includes U.S. companies whose market valuations are between $2 and $10 billion.
- Socially Minded adds companies that conduct their business in a socially responsible fashion.
The Featured Portfolios offers another way for you to customize your investments. Users may replace the standard portfolios created by the platform with a Featured Portfolio, each of which embodies a particular investment strategy, like Yield Street, which offers a portfolio of income-yielding dividend stock and bond funds, or the American Dream, a 70% stock/30% bond portfolio focused on funds that will benefit from domestic economic expansion.
Like all robo-advisors, Axos Invest Managed Portfolios automates portfolio rebalancing to keep their customers on track to meet their goals as financial markets change.
Taxable portfolios also benefit from tax-loss harvesting, which offsets realized investment gains by selling losing funds to minimize the client’s tax bill. Investors can exclude certain funds from their account to remain in compliance with the wash sale rule.
Other Axos Invest Features
Customer Service & Resources
Axos Invest offers live phone support during normal business hours as well as email and text chat customer service options. Our evaluation included queries to Axos’ email customer service, which received quick, complete responses to our questions.
The platform’s educational resources are a little sparse. It offers a very basic blog on banking and investing topics, plus a range of useful banking, retirement and investing calculators. The bulk of these, however, focus on topics like loans and savings rates, which may not be the most useful for investors.
Mobile App
Axos Invest Managed Portfolios’ mobile app has suffered from usability issues, particularly in the past year or so. Many users on the Google Play store have complained of account data not syncing or having difficulty accessing their account on mobile.
The company has indicated that the Axos Bank app will be revamped soon to support Managed Portfolios. But if you need a highly functional app as part of your robo-advisor experience today, this isn’t the platform for you now.
Self-Directed Investing
Axos Invest offers an online brokerage—called Axos Invest Self-Directed Investing—in addition to its Managed Portfolios robo-advisor. Self-Directed Investing provides commission-free stock and ETFs trading and access to more than 10,000 mutual funds. For users who want to try their hand at active trading, Self-Directed Investing offers a basic entry point to the stock market that may complement an Axos Invest Managed Portfolio.
Banking
Axos Financial is very well-regarded for its full-service online banking arm, Axos Bank. Besides having one of the best high-yield savings accounts available, the bank offers online checking accounts, certificates of deposit (CDs), mortgages and other lending products. That said, there is no direct integration between Axos Bank and Axos Invest Managed Portfolios, unlike the cash management products offered by some other robo-advisors.
Axos Invest Managed Portfolios Advantages
If you like the idea of automated investment management that also offers a degree of portfolio customization, Axos Invest Managed Portfolios could be a great choice. The platform offers several avenues for tailoring your investment options, plus a good range of pre-baked investment strategy choices.
Some investors prefer to set up separate buckets for different goals—one account for retirement and another for a home down payment, for example. If this sounds like you, Axos Invest Managed Portfolios might be an excellent bet. Best of all, there is no limit on the number of separate goals you can pursue with different investing strategies.
Axos Invest Managed Portfolios Disadvantages
The limited account options available on Axos Invest Managed Portfolios could be disqualifying for some users. There are no joint accounts, so married couples who are investing for retirement together should look elsewhere. Meanwhile, the lack of SEP IRAs or other retirement accounts designed for the self-employed limits the utility of Axos Invest for freelancers.
The user experience on Axos Invest Managed Portfolios’s website and app leaves a lot to be desired and is markedly worse than competitors’. It can be challenging to find information you need and access key features. This includes things as simple as viewing the list of ETFs contained within one of your portfolios.
The advanced customization features like Portfolio Plus are so attractive, but deploying them in your portfolios is not intuitive. The responsive customer service is a positive here, but if you can’t readily access what you need, you’ll end up wasting time by reaching out to customer service to use basic features.
