Motif vs Schwab

Motif vs Fidelity Investments, TD Ameritrade, Etrade, and Charles Schwab



Motif Investing vs TD Ameritrade, Schwab, and Fidelity: Comparison Chart


Broker Fees Stocks/ETFs
Commissions
Mutual Funds
Commissions
Options
Commissions
Maintenance
Fees
IRA Setup
and Annual Fees
Firstrade Fees $0 $0 $0 + $0 per contract $0 $0
Ameritrade Fees $6.95 $49.95 $6.95 + $0.75 per contract $0 $0
Etrade Fees $6.95 $19.99 $6.95 + $0.75 per contract $0 $0
Motif Fees $4.95 NA NA $0 $0
Fidelity Fees $4.95 $49.95 $4.95 + $0.65 per contract $0 $0
Schwab Fees $4.95 $76 ($0 to sell) $4.95 + $0.65 per contract $0 $0


Broker Review Investment Products Trading Tools Customer Service Research Overall Rating
Firstrade
TD Ameritrade
Etrade
Fidelity
Charles Schwab
Motif Investing


Motif Investing Pros and Cons


Motif Investing is an online brokerage specializing in investment vehicles called motifs. Founded in 2010, the company has grown rapidly, won awards for innovation, and attracted venture capital from firms such as Goldman Sachs and J.P. Morgan. Let's take a look at Motif Investing pros and cons.



Motif Investing Pros


Motif Investing Cons

  • Extremely low commissions to buy a basket of up to 30 stocks or ETFs
  • No-annual-fee IRAs
  • No inactivity or maintenance fees
  • Stocks and IPOs can be traded in dollar amounts instead of shares.
  • No management fees
  • Very low margin rates of 4.25%-6.75%
  • Makes sense for investors who want to buy a particular group of stocks or ETFs and hold for the long term and rarely rebalancing
  • Eight target-dated motifs are available that may be excellent alternatives to target dated mutual funds, since no management fees are charged

  • No DRIP
  • No options
  • No mutual funds
  • No bonds, commodities, currencies, penny stocks, or international investments except U.S.-exchange-listed ADRs
  • Many Motifs have little or no long-term track record upon which to base investing decisions
  • Professionally created motifs are regularly rebalanced (quarterly, annually, etc.). To maintain that balance the investor must pay the $9.95 rebalancing commission at those times



Motif Investing vs Competitors: Pricing


Motif Investing only offers investing in stocks and ETFs and their commission on these products is $4.95 per trade. Its main competitors, Schwab and Fidelity, also have a $4.95 per stock or ETF trade rate. The cheapest broker by far, Firstrade, charges $0 for these trades. The other two companies in this comparison have much higher, $6.95 per trade rate.

While Motif Investing does not offer investing in mutual funds, all other brokers offer thousands of mutual funds from all major fund families including Fidelity and Vanguard. Firstrade's rate is $0 per transaction on mutual funds trades. Other competitors have higher rates: from $20 at Etrade to $76 at Charles Schwab for the same transactions.

While it's true that Motif Investing does not offer mutual funds, they created their own version of mutual funds, called motifs. Motif is a user-created collection of up to 30 stocks. There are professionally created motifs and there are thousands of motifs created by regular investors. The main differences between motifs and mutual funds are 1) there are no yearly expenses (except for some professionally managed motifs) and 2) customers have an ability to create their own motifs and change (rebalance) them at will. The fee for trading or rebalancing motifs is $10.

All companies in this article do not charge account inactivity or maintenance fees as well IRA setup and annual fees.


Services

TD Ameritrade and Motif Investing offer access to online investor communities, where clients can learn about investing and trading from more experienced members, and even get ideas on where to invest their money or what is hot for trading. Out of the six online brokers in this article only TD Ameritrade offers practice account which is ideal for inexperienced customers to learn trading tools without any potential of loosing money as well as for seasoned traders who want to test advanced trading strategies without taking unnecessary risk.

All six online investment firms have very good to excellent customer service. Also, all but one company (Motif Investing) offer comprehensive selection of investment research from a number of sources.

While the five large brokerages offer their clients a majority of available investment products, Motif Investing right now only provides access to stocks and ETFs. All companies in this article created easy-to-use trading tools that even beginners will learn in no time.


Recommendations

Motif Investing is a relatively new idea for individual investors. While a sound concept, the execution may be lacking if anyone is allowed to construct and "market" a motif to customers. Long-term return comparisons are not possible since the company is only eight years old and none of the motifs has been in existence longer than that. On the surface, commissions may be low, but regular rebalancing may add costs that an investor had not anticipated or is unwilling to pay. Motif investing may earn its place in the investing world, but investors must understand the concept and methods completely before investing in a motif. Motif Investing is our recommendation for adventurous people wanting to try new ideas as well as savvy investors.

Firstrade is a natural choice for anyone looking to invest with low priced brokerage house. It is also one of the best brokers for mutual funds investing and for IRA accounts.

For the best professional trading tools on the market, an ability to practice trading without any risk, and for the richest offering of third-party, independent investment research go with TD Ameritrade.

Fidelity Investments is highly recommended for anyone investing in Fidelity's own family of mutual funds and ETFs.

E*trade is an attractive brokerage firm for fixed income and corporate, municipal bonds investing.


Promotions

TD Ameritrade: Trade free for 60 days + get up to $600.

Firstrade: $0 commissions + up to $200 in transfer fee rebates.

Fidelity Investments: Get 500 free trades with $100,000+ deposit.

Charles Schwab: Make $100,000 deposit and get 500 commission-free online equity and options trades.

Etrade: At E*TRADE, get $6.95 trades + 65₵ per options contract.

Motif Investing: None



Updated on 3/21/2018.