3-star brokerage rating

Tornado Invest Review


2024 Tornado brokerage review: trading platform, account fees, and investing app pricing. Is Tornado a safe, insured, and legitimate company or a scam?


Review of Tornado Investing


Tornado is a brokerage firm with some new ideas on trading and investing. While there definitely are some strengths here, there are also some red flags. Here’s the rundown:


Tornado Investing Pricing


InvestmentsCommissions
Stocks and ETFs membership costs $4.00 per month which includes up to 20 trades per month; $4.50 after that
Options not offered
Mutual funds not offered

Investments stocks, ETFs, closed-end funds
Minimum deposit to open account $0


Tornado Invest Pros...


Unique investing method. You won’t find Bollinger Bands here.

Helpful website. The broker’s only trading platform delivers a lot of useful features.

Simulated trading. It’s possible to try out the broker’s tools before opening a live account.


Tornado Invest Cons...


Commission schedule is not competitive. Tornado is one of the few brokerage firms left to still charge subscription and stock trading fees.

Customer support leaves a lot to be desired. Most channels don’t exist.

Many investment vehicles can’t be traded. Don’t bother asking about mutual funds, bonds, forex, precious metals, or futures.


Opening an Account


Tornado Account Rating

Tornado provides two types of accounts: simulated and live. The simulated account allows you to explore the broker's offerings and see if it suits your needs, while the live account enables you to make real trades with real money.

Opening a demo account is quick and easy, requiring only your name and email address. The account setup process takes just a minute or two, and you will need to create a password.

On the second screen, you will be presented with stock categories and sectors to choose from, such as dividend payers or diversified ETFs. Selecting a category, such as dividend payers, will provide you with a list of investments like GE, Ford, and Coca-Cola.


Insurance and Regulation


Tornado Safety Rating

Tornado has membership with SIPC and FINRA. The company's BrokerCheck profile indicates its registration in 2016 and currently has no disclosures, which is a positive sign.

Through SIPC, each customer is insured for up to $500,000. Additionally, Tornado has a supplemental policy through Lloyd's of London, which raises the coverage to $37.5 million, with a brokerage firm limit of $150 million.


Style of Investing at Tornado


Tornado Investing Rating

Tornado employs a social networking approach to financial management. Instead of relying on technical or fundamental analysis, Tornado traders observe the buying and selling activities of others.

This style of investing is made possible through two channels: professionals and amateurs. Tornado clients can log in to see the portfolios of professional money managers, including renowned figures like Carl Icahn (Icahn Capital), David Tepper (Appaloosa Management), and Bill Ackman (CEO of Pershing Square).

Clients can also reach out to Tornado's investment professionals, known as Community Thought Leaders, via email to inquire about their opinions on specific stocks. When we asked about Facebook, we received a brief bullish response, similar to a tweet. We were able to agree or disagree with the response and view what other traders were thinking on Facebook's profile.


tornado invest reviews


This is where the second avenue, the amateur space, comes into play. Customers have the opportunity to post brief pro or con statements (less than 250 characters) about a specific security. These statements are displayed on the asset's profile, allowing other customers to approve or disapprove of the comment.

It is also possible to connect with other traders and observe the performance of their investments. Tornado's platform showcases the historical performance of their ideas, asset allocation percentages, and conviction levels.


Customer Support


Tornado Customer Rating

We were unable to locate Tornado's phone number, which is quite telling. The company's customer service mainly consists of a list of frequently asked questions (FAQs) on its website. The topics covered include investing on the broker's platform, margin trading, fund transfers, and simulated trading.

Although we found an email address (hello@Tornado.com) for customers with further questions, we received no response even after waiting 24 hours for answers to our inquiries.

Tornado does not have any branch locations. Their website does not provide a robo or human chat service, there is no internal messaging feature, and the online self-help section is limited.


Price Schedule


Tornado Price Rating

What are the charges for Tornado's social trading services? They offer a subscription plan priced at $4.00 per month, which includes 20 free trades. After the initial free trades, equity trades cost $4.50 each. Paper statements carry a fee of $5 each, and trade confirmations cost $2. Notably, Tornado is one of the few brokerage firms that charge for tax statements, which are priced at $5. Margin loans incur a flat rate of 6.50% for all balance levels.


Website


Tornado Financial Rating

Tornado's website is the central hub for all activities. The broker does not offer a desktop program, which is not surprising given its investing model.


tornado app review


During our evaluation, we found Tornado's website to be user-friendly and easy to navigate. A convenient menu appears as a column on the left-hand side of the screen. The dashboard option, which displays the account value, current market indexes, and stocks that Tornado customers are discussing, serves as a great starting point. Another menu selection is "top performers," which showcases the most profitable stocks being traded on Tornado (specifically, the top 10%). Users can keep track of their investing contacts through the connections tab.


Tornado Reviews


For stock research, there is a search field at the top of the site where you can enter a ticker symbol or company name. However, the graphs provided are quite small and lack additional tools other than a comparison to the S&P 500. Tornado's trade ticket is simple, offering market, limit, stop, and stop limit order types. It's important to note that investing in whole-dollar amounts is not possible.


Tornado Review


Funds


Tornado Mutual Funds Rating

Tornado allows trading in closed-end and exchange-traded funds (ETFs). The profiles for these funds are similar to those of stocks. However, there is no fund commentary from notable analysts like Morningstar, nor is there a traditional fund screener available on Tornado's platform. The suggested approach to investing in funds on Tornado is the same as with stocks—browsing through what other people are buying and discussing the upsides and downsides. During our research, we found that the most popular fund trades on Tornado were EEM, EFA, and SPY, but the popularity may vary on different dates.


Investment Education and Research


Tornado Research Rating

Tornado does not provide PDF stock reports or similar commentaries. Instead, the focus is on social networking and discussing what professionals and Tornado customers are buying and selling. On a stock's profile page, news articles are presented in two columns: one for bullish articles and another for bearish articles. Tornado uses the terms "pro" and "con." Clients can express their approval or disapproval of the posted articles by clicking on the agree and disagree links.


Tornado Trading review


Stock profiles on Tornado include a company description, financial data such as net debt and forward EPS, and a link to SEC filings.

Tornado members have access to Capital IQ data, a professional-quality data source widely used in the finance industry. This data source, which typically costs over $10,000 per year, is provided to Tornado members at no extra cost. Capital IQ powers Tornado's advanced stock screener, called "Explore," which helps users quickly find stocks of interest.

Community Thought Leaders on Tornado are former Wall Street professionals who offer insightful perspectives on stocks and markets through exclusive content. Their bite-sized commentary is presented in a personalized news feed format, similar to Facebook or LinkedIn, making it easy for users to stay updated, research stocks, and engage in discussions with the community.

Tornado also offers a unique portfolio optimizer based on Nobel Prize-winning research by Harry Markowitz and others. This feature allows members to build intelligent portfolios tailored to their own views, risk tolerance, and customizable parameters. The portfolio optimizer can be accessed through the green button on the top right of the website or the Analysis option on the main menu.


Other Services


Tornado Services Rating

Tornado does not provide mutual funds or periodic mutual fund investing services. The broker also does not offer banking tools, portfolio management services, or integration with digital assistants like Alexa.


Comparison


Tornado Comparison

In terms of trading fees, Tornado is at a disadvantage compared to the majority of online discount brokers that have eliminated trading fees. With a $4.50 commission per trade (or a monthly subscription to remove it), Tornado's pricing may be debatable considering the availability of free alternatives.

One concern with Tornado's investment method is the heavy reliance on the opinions of other Tornado traders, including amateurs. While professional opinions are also available, other brokerage firms provide access to professional stock reports with trade recommendations from analysts such as Zacks, ValuEngine, and MSCI. Additionally, some brokers like Webull offer social signals extracted from social media sites. Furthermore, Charles Schwab offers $0 commissions for stock and ETF trades.


Recommendations


Mutual Fund Investors: Firstrade would be a good pick.

Individual Retirement Accounts: Because of Tornado’s fee schedule, we think Robinhood would be a better broker.

Beginners: Tornado’s materials aren’t geared towards new traders. Charles Schwab would be a better choice.

Active Stock and ETF Trading: Tornado’s software isn’t designed for frequent trading. Webull would be a better route to take.

Long-Term Investors and Retirement Savers: With Charles Schwab large selection of mutual funds, we have to go with it.


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Tornado Invest Review Summary


Tornado offers a unique style of investment management that will cost you $48 a year. With this Tornado app review you should be able to decide if it is worth it.


About the Author
Chad Morris is a financial writer with more than 20 years experience as both an English teacher and an avid trader. When he isn’t writing expert content for Brokerage-Review.com, Chad can usually be found managing his portfolio or building a new home computer.