There are some brokerage (online) firms out there providing you with the chance to invest on your own at a reasonable price. However, with Motif Investing been a discount brokerage you can invest based on themes.
Motif Investing offers a unique combination of brokerage services and managed investment portfolios. Motif allows beginning investors to diversify their portfolios for far less than paying trade commissions on individual stocks.
What is a Motif Investing?
Motif Investing is part online brokerage firm–in that you can choose your own investments–and part robo-advisor since it manages your holdings for you. And that makes it one of the most unique and innovative investment platforms available.
But that’s only the beginning. Motif allows you to invest in pre-designed portfolios, called motifs, or to create your own. You can do this using a mix of stocks in exchange-traded funds (ETFs), and build your motif around any investment theme or objective you choose.
However, in recent years, Motif Investing has been steadily expanding its product menu. They now enable you to invest in socially responsible investing, initial public offerings, and soon, cryptocurrencies and other digital assets.
There are a lot of innovative investment platforms available today, but Motif Investing is near the top of that list. The platform currently has more than 350,000 customers, including heavyweights such as Goldman Sachs, J.P. Morgan, a U.S. Bank.
Motif Investing has a Better Business Bureau rating of B+ (on a scale of A+ to F), though the company is not BBB accredited.
How Motif Investing Works
Motif has become such a diversified investment platform that you have several choices for how you can invest. You can start by opening a Trading Account, which requires no initial investment. You can use that account to trade individual stocks and ETFs, but also invest in what the company calls motifs.
Motifs are both the operative word in the company’s name, as well as the most basic investment methodology the platform provides.
A motif is actually a portfolio that contains up to 30 investments. Those investments are a mix of stocks and ETFs. The company offers dozens of pre-built motifs for you to choose from. But if you decide you have an idea to create your own motif, you can do just that. You can build a motif theme around just about any investment idea you have.
Once you invest in a motif or create one, it will be fully managed for you by Motif Investing.
In addition to opening a Trading Account, you can also invest in any of the other portfolios available through Motif Investing. The company has branched out into a variety of different investment areas and promises to develop even more.
Pros and Cons Of Motif Investing
Select pre-existing motifs (portfolios) built around very specific investment themes, or create your own.
The ability to create your own motif gives you an opportunity to create very specific investment opportunities, with no more than 30 securities.
Once established, motifs and other portfolios will be fully managed for you, as a robo-advisor. Your only responsibility is to fund existing or new motifs and portfolios.
Motif Impact Portfolios can offer you an opportunity to participate in socially responsible investing through predetermined portfolios which you can then customize.
You can open an account with no money, then began investing in your first motif once you have at least $300 in the account.
Next-day stock and ETF trades can be executed for free.
Motif Initial Public Offering allows small investors to participate in IPOs with as little as $250. This is one of the most profitable investment areas, historically available only for large investors. But Motif is making available for the masses.
Though it isn’t out yet, the Crypto Portfolio will enable you to invest in Bitcoin and other digital assets. Up to this point, the ability to invest in cryptocurrencies directly remains a bit of a mystery to most investors.
The fee structure of $9.95 per motif for Thematic Portfolios is a lot to pay for a portfolio as small as $300.
Fees for real-time trading are even higher, and not competitive with other brokerage firms that trade in real-time as a regular practice.
Though Motif Investing now allows you to trade individual stocks, the platform is fairly limited compared to more established brokerage firms when it comes to trading.
Customer service is limited to regular business hours. You won’t be able to contact the company if you have questions or concerns after hours, or on weekends or holidays.
Motif Investing does not pay interest on uninvested cash.
You can invest with stocks and ETFs, but not mutual funds, options, or other investments.
Motif BLUE is a new monthly service that gains you access to more advanced features with Motif. Based upon the features, Motif is targeting more active traders.
Depending upon how much you trade per month, these plans could save money compared to competing services. It currently has three options available.
The Motif BLUE Starter – $4.95/month
Motif BLUE Standard – $9.95/month
Motif BLUE Unlimited – $19.95/month
Some of the new features I question the value-added (like market commentary), though the three free trades, automated recurring investments, and automated rebalances could make the $19.95 worth the monthly fee.
Keep in mind with Motif each trade is $4.95 and with three free per month equals $14.85, not including the other features listed.
Motif has a special promotion via their refer-a-friend program – Get Motif BLUE 3 months for free.
Motif Investing recently introduced commission-free Horizon Motifs. So with these motifs, you do not pay the $9.95 commission. These motifs are similar to retirement target-date funds.
All you do is select the time horizon, and Motif Investing does the rest. If anything they are now more like the robo advisors Betterment, Wealthfront and FutureAdvisor where you are letting a service create your asset allocation. Target-date funds have their issues but do open up Motif to a much wider audience of investors.
Motif Investing Alternatives
On balance, Motif is an excellent investment platform, but like any other, it isn’t perfect. For example, though it offers trading of individual stocks the ETFs, it doesn’t offer the support and tools that you’ll find on more established trading platforms. Motif Investing Alternatives includes:
It’s trading costs are the same at $0 and it’s a full-service trading platform that allows you to trade in real-time.
M1 Finance is another investment platform similar to Motif in many ways. Even more, M1 Finance offers investment “pies”–both are custom made mini-portfolios but M1’s pies are commission-free.
Meanwhile if you’re looking for a full-on robo-advisor to manage your money at a very low fee (like 0.25% per year), plus a socially responsible investing option, check out Betterment or Wealthfront.
1. Does Motif reinvest dividends?
Yes. If the dividend is paid in cash, it will be held in your cash account. Once the cash balance reaches $250, it will be automatically invested toward your target allocation.
2. How can I withdraw money from my account?
You can transfer money in or out of your account to and from your linked bank account by ACH. You can also request a check be issued from Motif Investing by contacting customer service.
3. Can I set up recurring deposits to increase my account balance?
Yes. From the Motif dashboard, you can go to “Account” and click “Transfer Money”. You can select either “Deposit Funds” or “Withdraw Funds”, then click “Set as a recurring deposit/withdrawal”. You can then set the amount and the date of the recurring deposits or withdrawals.
Motif is a strong choice for socially conscious investors or investors interested in buying fractional shares. Motivated self-directed investors may also find that the community of motifs is an intriguing way to explore investing options.