Motif Investing rating

Motif Investing Review


Motif Investing Pricing and Minimum Deposit


InvestmentsCommissions
Stocks and ETFs $4.95
Creating or rebalancing motif $9.95 total commission for up to 30 stocks or ETFs you choose

Investments stocks, ETFs
Motif Investing minimum deposit to open account: $0. Minimum amount to invest in a motif: $300. Minimum amount for margin account: $2,000
FeesMotif Investing fees


Overview of Motif Investing


There's a unique brokerage firm on the horizon that is trying to shake up the way people invest. Called Motif Investing, this company offers baskets of securities that carry various investment themes. We're going to take a look at these in this 2018 Motif Investing review; and we'll also analyze the broker in several categories in order to get a good idea of how Motif compares to some of the other options out there.


Banking Features


Motif Investing Banking Rating

Motif Investing begins our investigation with a goose egg. The brokerage house does not provide any cash management services. Furthermore, Motif doesn't pay any interest on cash balances. If you need checks or a debit card, you're simply out of luck here.


Alternative Investments


Motif Investments Rating

Another disappointing result. Motif Investing does not provide trading in bonds, mutual funds, or options. Because so much of the investment space is devoted to these products, Motif is a real failure here.


The Motif Style of Investing


Motif Investing Style of Investing Rating

So what is a motif? A motif is basket of securities. Before you think this is just another fund, it's not. Motifs aren't professionally managed. They are marginable and come with intraday pricing. To invest in a motif, you have to put in at least $300.

Unlike a mutual fund or ETF, motifs offer direct ownership of their underlying securities. When you buy a fund, technically you're buying shares of the fund. The fund in turn owns the assets in the portfolio. When you buy a motif, on the other hand, you're actually buying the underlying securities. This gives the owner of the motif voting rights in the stocks and ETF's that make up the portfolio.


Motif Investing Review


Each motif has a theme. For example, one motif invests exclusively in companies connected to robotics. Another focuses on digital finance. Other examples include IT, defense, and energy. These are motifs we found that were built by the brokerage firm.

It's also possible to build your own, and many customers have done so. One example is a materials motif. It contains eight stocks that manufacture chemicals and cleaning products. DowDuPont is one example. It makes up 14% of the motif.


Motif Investing Review


If you like a particular motif but think the asset allocation within the motif isn't quite right, it's possible to increase or decrease a holding. This separates a motif from mutual and exchange-traded funds, which aren't customizable.

This is how the system works in a regular brokerage account. Motif also offers something called Impact Portfolios. This is the company's version of socially-conscious investing. If you select this type of account, you can invest in motifs that align with certain social or political objectives. Examples include a fair labor motif, a sustainable planet option, and one motif that focuses on companies with high marks for good corporate behavior.


Motif Impact Investing


Auto-investing is a free service for any motif. You simply choose anywhere from semi-monthly to quarterly and select the amount of automatic investments. Orders are executed as market-on-open. The commission on customer-built motifs drops to $4.95 on these trades.

Another available feature is auto-rebalance. This one is only available for professional motifs. The broker automatically buys some securities and sells others in order to keep the asset allocation in line with your original target weights. Trades that are conducted under this plan are always free.

Motif Investing does not offer a DRIP service; all cash dividends are deposited in a core cash position outside of individual motifs.

If you would rather skip the motifs altogether, the broker-dealer will let you trade individual stocks and ETF's. IPO's and secondary offerings are also on tap. One really attractive feature of the Motif Investing platform is that it's possible to buy fractional shares of stock.

What we really liked about Motif Investing is the ability to create your own basket of stocks and invest in other customers' motifs. This is simply not possible at other brokers. We found over 14,000 of client-built motifs. The big drawback with Motif Investing, however, is that the company doesn't focus on other types of investments. As already noted, it's not possible to trade options.


Motif Example


To give you an idea of a specific basket of stocks that can be purchased at Motif Investing, we browsed through the list of available choices. One that caught our attention was a Banking motif. This one was created by an individual customer in 2014. It was last updated in 2017. It consists of eight banking stocks. The largest holding is Citigroup at 27.0%, and the smallest holding is ING Group at 4.8%. There are just eight stocks in the motif, so it's much smaller than a typical mutual fund or ETF.

The Banking motif is graded at low volatility and average valuation. It has a current dividend yield of 3.0%.


Motif Banking Example


We found a small chart on the details page. This can be expanded into a larger chart where the timescale can be adjusted. It's also possible on the larger chart to show comparisons to other motifs, ETF's, or stocks.

One feature that impressed us the most is the ability to customize the motif. When we clicked on the ‘Customize Motif' in the upper-right corner, we were taken to a new page where we were able to easily adjust the percentages of each stock. Using a sliding bar, each individual holding could quickly be adjusted. Furthermore, we were able to delete stocks from the motif or add additional stocks. For example, we could delete Citigroup and add Wells Fargo, which isn't part of the default setup. If 500 customers purchased this motif, it's certainly possible that there would be 500 unique Banking motifs.


Motif Banking Example


Motif Commissions, Fees, and Account Requirements


Motif Investing Fees Rating

Now we're going to look at what all of this costs. Buying and selling a broker-constructed motif is free of charge if you place a market-on-open order. This means the order will execute at the opening bell on the next trading day. If you don't like this option, you can submit an order any time during market hours for $9.95 per transaction.

This price is just for motifs that are built by Motif Investing. If you trade one of the community-constructed motifs, the price is $9.95 for market-on-open orders and $19.95 for the second option.

If you want to trade an individual stock or ETF just like you would with a normal brokerage firm, the cost is a very impressive $0 for market-on-open orders. Otherwise, the commission is $4.95, another nice figure.

Motif Investing offers initial and secondary public offerings. Amazingly, the brokerage house charges nothing for these trades. Any trade placed over the phone with the help of a live associate costs $45, a rather steep charge.

There's an optional subscription package called Motif Blue. It costs $19.95 per month, but in return, you get three commission-free intra-day trades, unlimited commission-free market-on-open trades (which would be great for the community-built motifs), and real-time quotes on every page at Motif Investing. Without Blue, you get these quotes only on trade pages.

Each motif comes with an annual fee. The brokerage firm calls it an “annual licensing fee.” Impact Accounts pay 0.25%. This same charge is applied to certain motifs in a regular account. These are target-date, fixed-income, and investing classics motifs. Other themes cost 50 basis points. Horizon motifs, which have a lifespan, have no fee.

Motif charges a quarterly fee of $10. It can be avoided by maintaining at least $10,000 in assets with the company. It can also be evaded by placing one commissionable trade in the quarter or enrolling in the Blue program.


ETF's


Motif Investing ETF Rating

One nice feature of Motif Investing is that if you don't want to trade any of the motifs, you can simply buy and sell regular ETF's. However, most brokerage firms today offer a list of commission-free funds, something that Motif has failed to do. If you're willing to trade ETF's with market orders at the opening bell, you can do any fund for $0. Otherwise, it's a $4.95 trade. If you're looking for ETF resources, you're not going to find very many here; the brokerage firm emphasizes motifs, so that's where its resources are focused.


Customer Support


Motif Investing Customer Rating

A Motif representative can be reached during the week during normal business hours. These are between 9 am and 6 pm, EST. Unfortunately, the broker is closed on the weekend, and there is no on-line chat function. Moreover, the company does not have a network of branch locations.

Motif Investing does have some social networking sites, but they are not very active. There is a service e-mail.


IRA's


Motif Investing IRA Rating

Motif Investing customers can open IRA's in addition to a regular investment account. We were disappointed not to find SEP or SIMPLE accounts. The broker only provides Roth and Traditional types. An old employer's plan can also be rolled over. The same $10 quarterly fee applies to a Motif Investing IRA. Moreover, the brokerage firm charges a steep $95 to close or transfer an IRA.

During our investigation, we did not find any retirement educational materials, nor did we find a self-employed 401(k) offering.


Investment Advice


Motif Investment Advice Rating

Motif Investing doesn't offer traditional financial planning or investment advice. It's also not exactly a robo advisor. The community motifs, for example, are created by individual traders. The company-built motifs certainly provide a level of professional guidance. An Impact Investing portfolio is automatically adjusted by a computer program.


Trading Tools


Motif Investing Trading Tools Rating

When we logged into our test account, the first thing we saw was the Dashboard. This is a general area that contains several important features. There are links to CNBC news articles, a list of recent activity, and information on how Motif Investing works.


Motif Investing Account


Because of the type of broker Motif is, you're not going to find a desktop platform here. In fact, there's not even a browser-based one; nor is there a trade bar on the website. Motif isn't designed for active stock traders, although you could trade equities frequently using the broker's simple trade pages.

Underneath the ‘Account' tab at the top of the site is a ‘Positions & Balances' section. Here, you can find a breakdown of each security in an account. One nice feature we liked was the ability to download information as an Excel file. Another nice feature is an allocations section, which shows how much of a Motif account is invested in cash, US stocks, global stocks, bonds, or other types of assets.


Mobile App


Motif Investing App Rating

An app for Android and Apple devices is available to Motif Investing customers. The account tab separates stock positions from motif positions, a helpful feature. A watchlist can be created, and here too, stocks are kept separate from motifs.

A search box appears at the top of the app. Typing in a company name or ticker symbol produces a drop-down menu with some selections. Two at the top are for stocks and motifs. For example, when we typed in ‘FB' we would receive two options: one for Facebook in stocks and another for Facebook in motifs.


Motif Mobile App Review


The stock page shows very brief information such as market cap and EPS. It's definitely not enough for security research. The chart is very basic with no tools. It cannot be rotated horizontally. On the positive side, there are news stories from a variety of outlets.

Choosing motifs rather than stocks will show you all the motifs that contain Facebook shares. Here, too, we were disappointed in the rudimentary nature of the graph. There isn't much information presented, other than the stock holdings of the motif.

There is a very good motif search feature on the mobile platform. It is divided into community and professional products. It's possible to create a motif on the mobile app, a really nice feature. An IPO page shows available upcoming offerings.

We didn't find mobile check deposit or bill pay, a significant letdown.


Investment Education and Research


Motif Investing Research Rating

On the website Dashboard, there are two places where you can type in a ticker symbol. Doing so generates a security page where basic information is presented. When we say basic, we're talking very basic. A stock just shows a handful of numbers, such as 52-week range and P/E ratio.

A graph is displayed on a security's profile page, and it is really simple. There are no comparisons, technical studies, or drawing tools. Beneath the graph is a list of professional and community motifs that invest in the stock or ETF. There's also a Twitter feed with comments on the security.

A motif research section shows top performing securities, most purchased, and baskets with the highest dividend yield. Selections can be divided into professional and customer motifs. News articles connected to one of a motif's holdings are displayed. Another section shows what other traders think about a motif.


Comparison


Motif Investing's $95 IRA closeout fee is higher than TD Ameritrade's fee, which sits at $0. Merrill Edge charges $49.95 to close a retirement account.

Perhaps the most similar broker to Motif Investing is M1 Finance. M1 offers investments in Pies, which are built by the broker or by clients. Like motifs, customer-built Pies are customizable. M1 used to charge a flat percentage of assets in its Pies, but it has since removed this asset-based fee. Today, M1 charges 0% for its Pies. Moreover, the broker does not charge any commissions. M1 also offers automatic rebalancing of Pies as they drift from original asset allocations. This service is also free.

Like Motif Investing, M1 Finance provides retirement accounts. They have the same no-fee structure as taxable accounts, although M1 charges $100 to close an IRA. As we noted above, Motif charges $95. Unlike Motif, M1 does not charge anything for ACH transfers.

At this point, M1 Finance seems to be the better choice.

Compared to robo-advisory firms like Wealthfront and Betterment, Motif Investing has the clear advantage of offering baskets of stocks that are adjustable and customizable. Wealthfront charges 25 basis points (plus the expense ratios in the ETF's). Betterment has the same fee structure plus another one at 0.40%, which comes with advice from Certified Financial Planners and requires $100,000 to start.


Recommendation


We can't recommend Motif Investing for mutual fund investors for the obvious fact that the broker doesn't offer any. It's also not ideal for beginner investors because there just isn't much in terms of investment education. There are no resources that introduce the basics of stocks and bonds, for example.

The company's IRA selection isn't very good, either. And at $95 to close one, it's pretty easy to find better options.

Small accounts have a good deal at Motif Investing with the company's $300 minimum investment amount.

Motif would probably be best for fund investors would like the ability to customize the baskets they trade.


Motif Investing Review Summary


As you can see in our 2018 brokerage review, Motif Investing offers a unique form of money management that will appeal to some types of investors. But it fails to deliver in other areas, and this will send many investors to rival firms.


Open Motif Investing Account



Open Motif Account


Motif Investing reviewed by Brokerage-Review.com on . Rating: 3