Motif Investing is an online brokerage firm that basically offers various combinations of self-directed investments, but having the benefits of Robo-advisor management. It is part broker, part idea-generation tool, at the same time, portfolio manager.
Times have definitely changed in the world of investments. Today, there are a number of low-cost brokerages that have hugely changed the world of finance.
Unlike in the past, in this day and age, you no longer have to be the likes of Benjamin Graham, Peter Lynch, or Warren Buffet — all of them are popular in this industry. Today, investing has become more accessible, which is ultimately a great cause for celebration among the small investors’ community.
While there are so many online brokerages out there, one name has become one of the most popular companies in this industry — and that is Motif Investing. The company is one of the many online brokerages that is committed to change the way investing has always been.
Motif investing is known for offering intuitive, easy to use investment platform — which is also ideal especially to those new into this field.
If you are a mom who is looking into this option (investing, by the way, is a passive income — which is ideal for anyone who is not in a rush on spending their money), we highly suggest sticking around and read until the end of this Motif Investing review to know more about the company and what it has to offer.
Yes, you read it right. Today, we are going to specifically talk about Motif Investing. Particularly, answering the following very common questions about this online brokerage firm:
– What is Motif Investing?
– How does Motif Investing work?
– What are the features and benefits of Motif Investing?
– What is Motif BLUE?
– What are the different Motif Investment methodologies available?
– Motif Investing Fees
– How to sign up with Motif Investing?
– What are the pros and cons of Motif Investing?
In the end, we will also give our insights on the overall performance of Motif Investing to hopefully help you gauge whether or not it is worth working with the company.
WHAT IS MOTIF INVESTING?
Motif Investing was founded in 2010 and is based in Rancho Cordova, California, USA. The company is part online brokerage firm (as it allows you can choose your own investments), and as we mentioned earlier, part Robo-advisor (because the company manages your holdings on your behalf), which makes it one of the most innovative, and one of a kind investment platforms today.
Apart from what we have mentioned, Motif Investing also allows you to invest in pre-designed portfolios, which they call as “Motif”. The concept is to basically create your own. It is possible by using a mixture of stocks in exchange-traded funds or ETFs and then building your motif around your choice of investment them or objective.
In the last couple of years, Motif Investing has been steadily expanding its menu of products. Today, you can opt to invest in initial public offerings, socially responsible investing, and soon, they are going to introduce cryptocurrencies (which, by the way, is becoming really popular these days). In addition, they are also working on other digital assets.
While there are so many existing innovative platforms today, it is no doubt that Motif Investing is almost at the peak of them all. This is proven by the company’s rising number of customers. In fact, currently, they have more than 350,000 customers, which include heavyweights like J.P. Morgan and Goldman Sachs.
Although Motif Investing is not BBB accredited, they have a B+ rating (on a scale of A+ to F) from the Better Business Bureau.
Learn about what Motif Investing is all about in 90-seconds by watching the video below:
HOW DOES MOTIF INVESTING WORK?
As we have mentioned earlier, Motif Investing is a diversified investment platform. It gives you various choices to choose from when it comes to investing. To start off, you can open a Trading Account, which, by the way, has not initial investment required. Eventually, you can use that account to trade stocks as well as ETFs or invest in what they call as “motifs”.,
“Motifs” means two things in the company’s vocabulary. First, it refers to the operative word in the company’s name. Second, it also refers to the most basic investment methodology that the company provides.
Basically, a motif refers to a portfolio that has up to 30 investments. Those investments are typically a mixture of ETFs as well as stocks. You can also choose from Motif Investing’s dozens of pre-built motifs if you want to. Otherwise, you may create your own motif based on any investment idea that you have in mind.
The moment you have already invested in a motif or have created your own, it will then be fully managed on your behalf by Motif Investing, which we honestly find very convenient (especially if you are a mom who has so much on your plate or simply a busy person, this is really one great idea).
By the way, apart from opening a Trading Account, you can also invest in any of the other portfolios that Motif Investing has. Motif Investing boasts a variety of investment areas that you can choose from. More so, the company continues to develop to give its investors or customers more options to choose from.
WHAT ARE THE FEATURES AND BENEFITS OF MOTIF INVESTING?
Just like in anything, we have to look into the company’s features and benefits. Thus, for your reference, you may check the table below:
|Minimum Initial Investment Required:||Motif Investing has various investments models that come with individual minimums, such as:
– Trading Accounts – $0
– Motifs – $300
– Motif Impact Portfolios – $1,000
– Margin Accounts – $2,000
|Available Investments:||All U.S. exchange-listed stocks, ETFs and American Depositary Receipts (ADRs)|
|Available Accounts:||Individual and joint taxable accounts; traditional, Roth, and rollover IRAs; trust accounts|
|Account Clearing Agent and Custodian:||All funds invested through Motif Investing are held with Pershing, LLC, which is one of the largest financial institutions not just in the US, but worldwide. Pershing, LLC has nearly $1 trillion in assets under administration.|
|Margin Accounts:||Motif Investing offers margin trading that requires at least a $2,000 account balance. If in case your balance drops below this level, the company will issue a margin, and you will be required to deposit additional funds.
The current margin rates vary from 8.25% for balances in excess of $500,000 to 10.75% for balances that are below $10,000.
Please note that margin investing is only applicable for direct stock as well as ETF purchases. Such cannot be used in conjunction with other existing portfolios.
|Fractional Shares||The company allows you to trade to as low as .01 shares of stock. Such share will allow you to build a portfolio of fractional shares with a minimal investment.|
|Customer Service:||Motif Investing can be reached via email or phone from Monday to Friday, from 9 in the morning until 6 in the evening.|
|Account Security:||Your Motif Investing account is covered by SIPC, which is the one responsible for protecting your account against broker failure.
More so, your account is protected for up to $500,000 in securities and cash plus up to $250,000 in cash.
Meanwhile, for protection of your personal information, Motif Investing uses security technology such as a secure socket layer or SSL technology, as well as firewalls.
|Motif Investing App:||Apart from the web version, Motif Investing has a mobile app, which can be downloaded on Android via Google Play or iOS via the App Store.|
WHAT IS MOTIF BLUE?
Motif BLUE is actually a new monthly service that Motif Investing offers. This gives you access to more advanced features with Motif. With this feature, Motif is targeting more the active trader, which means, if you are new to this, Motif BLUE may not be that helpful for you.
These plans could help you save money as compared to competing services. But that depends on how much you trade every month.
Currently, there are three options available, which are:
- Motif BLUE Starter – $4.95/month
- Motif BLUE Standard – $9.95/month
- Motif BLUE Unlimited – $19.95/month
You may also get this feature for free though Motif Investing’s special promotion called refer-a-friend program.
In addition, Motif BLUE offers benefits like:
– Unlimited commission-free next market open trades
– Three monthly real-time trades that are commission-free
– Real-time quotes
WHAT ARE THE DIFFERENT MOTIF INVESTMENT METHODOLOGIES AVAILABLE?
Motif Investing has seven different portfolios to choose from. This includes four for individuals and three for institutional investors.
As part of this Motif Investing review, which we particularly offer to moms or any individuals who want to take their luck on investing, we are just going to run-through on the four portfolios for individual investors, which are as follows:
– Motif Thematic Portfolios
Motif Thematic Portfolios are the portfolios that the company is known for ever since. Basically, the company provides a theme-based portfolio according to the investment objectives they make. Every portfolio is composed of a basket containing up to 30 individual stock as well as ETFs. Guess what? You will surely never run out of options because Motif Investing has over 150 pre-built portfolios to choose from. If you want to make your own, that is also possible.
Thematic Portfolios require a minimum of $300 per motif, and you are allowed to build up to 250 individual motifs. Also, if you opt to choose to make your own motif, you can eventually make it available for other Motif investors as well.
– Impact Portfolios
As the name suggests, Impact Portfolios is the company’s socially responsible investing portfolios. These fully automated portfolios were designed to align both your investment objectives, as well as your personal values.
Every Impact Portfolio is composed of stocks and ETFs coming from different asset classes like:
- US Bonds
- International Bonds
- US Stocks
- Developed Market Stocks
- Real Estate Stocks
- Emerging Market Stocks
- Commodities Stocks
Furthermore, Motif Investing also employs tax-aware auto investing to lessen asset sales, which helps reduce capital gains taxes. Every portfolio requires a minimum investment of $1,000.
Currently, there are three portfolios under this group, which include:
- Fair Labor – This includes companies that promote safe working conditions, fair wages, as well as job security.
- Good Governance – This includes companies that demonstrate strong ethical track records when it comes to transparency, fairness, and accountability.
- Sustainable Planet – This includes stocks of different companies that are active in practicing sustainability to help reduce their carbon footprint.
– Initial Public Offerings
Unlike other investment firms, Motif Investing lets you open an account that will enable you to participate in an initial public offering or IPO. Basically, all you need to do is choose an investment amount, place a conditional offer, and then, receive your IPO shares.
One of the major pros of the Motif Initial Public Offering is it gives small investors the opportunity to partake in one of the most profitable investment activities there is. In the past, IPO investing was only available to intuitions and very wealthy people. Today, even small individual investors can join with just as low as $250. More so, the initial investment is commission-free, which is definitely great.
– Crypto Portfolios
It is no doubt that cryptocurrencies have become really popular these days, and to ensure that Motif Investing is up to date, they are rolling this portfolio soon. While waiting, you may opt to put your name on a waiting list to be able to reserve a slot once it becomes available.
Unfortunately, as much as we want to give you more information about this option, there is very little information yet. Hopefully, once it’s up, we can give you an update on this.
Ultimately though, we believe this option will provide investors an opportunity to add “Bitcoin and digital assets” to their portfolio.
WHAT ARE MOTIF INVESTING FEES?
For your reference, here are the different fees at Motif Investing:
|Trade Stock or ETF||$4.95||No minimum investment|
|Trade/Rebalance a Motif||$9.95||$300 minimum investment|
|Purchase IPOs||$0||$250 minimum investment|
|Motif Impact Portfolios||0.25% annually||$1,000 minimum investment|
|Platform Inactivity Fee||$10||See details below|
|IRA Account Termination||$95||Full IRA account closure|
As you can see, you are allowed to trade individual securities within your motif. You will have to pay the standard $4.95 commission per sale or exchange. This basically means two trades will cost as much as exchanging motif.
More so, note that the inactivity fee is only applicable if you are able to meet all of the conditions stated below:
– You have less than $100,000 but more than $0 in combined cash and securities in your account.
– You have not placed a commission trade in your account within the last six months.
– You are not an active Motif BLUE subscriber or an Impact account holder.
HOW TO SIGN UP WITH MOTIF INVESTING?
Now that you already know some of the basic facts you need to know about Motif Investing, let’s proceed to the process of signing up.
To be able to open an account with Motif Investing, you must be at least 18 years of age, at the same time, either a citizen or a permanent resident of the United States.
Signing up is very easy. All you have to do is visit their website, and hit the sign-up button. You will have to input your email address and then create a password to be able to access your account. Apart from these, you will also be asked to enter typical information needed to open a brokerage account like your full name, physical address, your driver’s license, as well as your Social Security number. You may also be asked to verify your income, as well as your employment.
Funding An Account
Once you are done with the registration process, your next concern would be funding your account, right? Well, you can transfer money to your Motif Investing account through ACH once you are done linking your bank account. You may also opt to transfer funds from another financial institution via wire transfer.
Meanwhile, if you wish to fund your account through a check, you may do so. You have to make it payable though to Pershing LLC, which is the account clearing agent and custodian.
That’s basically it. Very easy if you come to think of it.
WHAT ARE THE PROS AND CONS OF MOTIF INVESTING?
Before we give our final verdict on Motif Investing, allows us first to run down some of the pros and cons of this online investing platform:
– Low-Cost Trades – Motif Investing’s initial trade is at $9.95. After, when modifying the motif, you will only need $4.95 to do that.
– Customized Motif – You have the option to either use pre-made motifs or create your own unique motif. Once your own motif is made public, you get paid for every person who uses it.
– Cheap Single-Stock Trades – Motif Investing offers one of the lowest buying or selling a single stock/ETF in the industry at $4.95 per trade.
– Easy Way to Diversify – Motif Investing is an excellent service to diversify into particular investment ideas as well as sectors with minimal cost to invest.
– Lacks Social Features – We thought they’re missing features in the social section including the ability to search.
– No Automatic Dividend Reinvestment – At the moment, we found that Motif Investing are not able to automatically reinvest dividends.
– No Complex Orders Available – You are not allowed to perform a limit order on a motif or on a single stock trade.
FINAL THOUGHTS ON MOTIF INVESTING
All in all, we have to say that Motif Investing is an excellent platform to invest. Also, it is a unique service in the traditional brokerage firm world.
We thought Motif Investing is particularly helpful to those who want to get exposed to certain sectors, or those who are looking for a place to invest in trends.
When it comes to pricing, we have to say that Motif offers a very competitive pricing range. More so, it is very tax-efficient. It is an excellent way to diversify with small amount of money to invest.
Although it has its drawbacks, ultimately, we find it really great and we would definitely recommend it.