Motif Investing Is Bankrupt


Motif Investing Is Closing Shop


Motif Investing is going out of business and many customers have moved to M1 Finance. Founded in 2010, this fintech startup received backing from Goldman Sachs, JPMorgan, and US Bank. But it wasn’t enough, as Motif only had $18 million in client assets. Motif will close its doors in May 2021, and its 350,000 customers will need to find another broker.


Motif’s Rise and Fall


Motif Investing had a unique method of investment management, offering clients the ability to create their own baskets of securities (called motifs) composed of stocks and ETFs. It was also possible to buy and customize broker-constructed motifs.

Motif Investing was a small firm by industry standards. Nevertheless, it did develop its platform over time, rolling out a robo service in 2016, socially-conscious investing in 2017, and market-linked CDs in 2019.


Where Will Motif Customers Go?


Motif Investing is transferring customer accounts to Folio Investing. Like Motif, Folio offers baskets of securities. They’re called folios instead of motifs. It’s a similar, but not exact, style of investing.

At Folio, it’s not possible to invest in other customers’ folios, which is a major drawback compared to investing at Motif. Motif customers were able to trade other customers’ motifs.

Another downside that Motif customers will face at Folio is a $19.95 monthly fee. They didn’t have this at Motif. The fee is actually a discount from Folio’s normal $29 fee.

Instead of going to Folio Investing, Motif customers could go to M1 Finance. At M1, investors trade baskets of securities called Pies. These are composed of stocks and ETFs. It’s possible to trade broker-constructed Pies or build your own.

M1 Finance customers can make whole-dollar investments. This means they can trade fractional shares. It’s also possible to put just one stock or ETF in a Pie, which means less than one share can be traded.

Another advantage M1 brings to the table is zero fees and zero commissions. There are no monthly fees at M1, and trades carry $0 commissions.

M1 Finance also offers a cash management account, which delivers a lot of great perks. These include ATM fee rebates and a free debit card. Two packages are available, one with an annual fee and one without. The former comes with cash back and 1% APY. Both can be linked to a brokerage account.


M1 Finance Promotion



Open M1 Finance Account


Goldman’s ETFs


Goldman Sachs ETFs that track indexes developed by Motif Investing are unaffected by the closure of the broker. Goldman will now oversee the indexes.


Motif is going bankrupt


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Motif’s Bankruptcy A Sign of Things to Come?


Motif’s went bankrupt at the height of the economic drawdown in the first quarter of 2021. As the economy continues to suffer, smaller fintech firms are finding it harder to survive. What’s needed in these types of environments is plenty of revenue of capital, neither of which small firms have.

As larger brokerage firms have moved to a zero-commission model, smaller firms have been under pressure to compete. What the future holds for M1 Finance and Folio Investing is unknown at this time, but they do have stiff competition.