Motif Investing Review 2017

Motif Investing Review 2017

Why more people are not talking about Motif Investing is beyond me. This full-featured investing platform sports both a web-based and mobile interface, both of which are well-done and easy to use. In fact, they've managed to pack in so many features like automated investing, rebalancing, and personalized portfolio creation, that I am beginning to fear the length of this review!

Motif's unique feature is the ability to create and purchase "motifs" or little self-made funds of securities each of which can hold up to 30 underlying assets. You're basically allowed to make your own, or buy someone else's, unique little fund. If you want to know what I'm investing in or what I consider to be great Motifs, keep an eye out for my personal motifs article.

I'm going to roll up my sleeves for you and dive head first into Motif Investing, tearing apart everything from fees to features. You'll have a good idea of what Motif is, who it's for, and whether or not you should sign up by the end of the article.

Spoiler: It's an awesome app, you probably should sign up!

Fees & Commissions

Motif has several pricing structures so we'll break it apart between the subscription plans and the non-subscription (basic) account. Essentially, when you sign up for Motif it won't cost you anything. They make their money from traditional commissions. However, you can upgrade to monthly paid plans which reward you with various tiers of benefit.

Basic Account

When you create a Motif account you'll be granted a basic level account (unless you use my referral link). The advantage of this account is that you won't be charged a monthly fee at all. This makes it an ideal option for someone who doesn't plan to trade frequently.

For the basic account, you'll be able to purchase a Motif for $9.95 with a $250 minimum purchase. At this price, however, the $10 commission represents a 4% fee so watch out! The fee will make much less of an impact on larger purchases.

As long as you sell the whole motif at once you won't be charged for it. If you try to sell individual assets within the motif, you'll be charged 4.95 per stock or ETF.

You're also able to purchase individual stocks and ETFs outside of motifs as single investments. These transactions will cost you a $4.95 commission per transaction. That's cheaper than many traditional brokerages, but still quite high for beginner investors.

Motif Blue

Motif Blue is the subscription service account feature from Motif. I use this account type and, for the right investor, it's definitely worth the monthly cost. Check the Motif fees page for full details, but we'll break it down for you here.

With all tiers of Motif Blue, you can auto-invest in any professional motif or any motif made by you on a bi-weekly, monthly, quarterly, or annual basis. For the Blue Starter account, this applies to only 1 motif, but all other accounts are allowed 3 auto-invest motifs. Auto-rebalance also allows a commission-free rebalancing of your motif's assets.

With Motif Blue Standard and Motif Blue Unlimited, you'll get access to Motif Capital exclusive market insight reports and commentary. Basically, these are periodically released PDF documents from professional investors and academics. I have read a few and they're generally relatively cursory summaries of current market events. For many investors, I think they'll lend some insight into the market and market-bearing news.

You'll also get to elect into auto-rebalancing any professional motifs by using the higher level Blue accounts. The Standard account allows 1 commission free stock or motif trade per month while the Unlimited account allows up to 3 commission free trades. Blue Unlimited also allows unlimited next-day market open trades which means you can set an unlimited number of trades to happen at the opening of the market for free.

Luckily for you, you can get Motif Blue Unlimited for free for 3 months by using my referral link. I recommend trying the service if you're thinking about using Motif, it really unlocks the true potential of the platform.

Available Promotions & Free Cash

Motif at one point was offering free cash for signing up but, no longer. Currently, the only Motif Investing promotion code or referral link happening is for 3 months of Motif Blue Unlimited for free. This is a $60 value, though, so it's basically $60 of free cash to open an account.

Like I said above, if you're thinking about using Motif, the Unlimited account really unlocks what the platform is all about. I recommend at least trying it for 3 months free. Besides, once you sign up you can leave a comment here and we can connect on Motif to trade together!

Account Minimums & Maximums

Standard Motif Investing brokerage accounts do not have a minimum. There are a few minimums you should keep in mind, however, so we broke it down into an easy graph.

Motif Account Minimums

I did notice that there is a maximum daily deposit limit of $100,000 but I'm guessing that won't bother most of you.

Of course, because Motif is commission based and only charges a flat monthly rate for Motif Blue that means you can have as much money in your account as you want without incurring higher fees. The more you put into your account, the less of an impact any commissions will have on your overall performance.

As a note, the $300 minimum for motifs is per motif. So you'll need at least $300 per motif you want to buy (though the commission will eat a cringe-worthy portion of that $300 so you might want to go higher).

I usually try to mention SIPC coverage here. SIPC coverage extends up to $500,000 per brokerage so keep that in mind if you're worried about liquidity issues with Motif Investing as a company. What SIPC coverage does is "insure" your investments against the risk of Motif going out of business. Learn more from Motif. SIPC does not protect your money from you making bad investment decisions.

Fractional Shares

Why do we always include this section? Because fractional shares are incredibly important for new investors to get started safely with just a little money. When you've accumulated a large investment portfolio, fractional shares matter much less.

Motif Investing does support fractional shares as you'll see in the included picture. I used my account to simulate a trade of $20 worth of GoPro which amounted to 2.4 shares at the time.

Of course, we need to be smart about the costs of commissions and this is not a recommendation to make this trade. Simply a visual representation of the order window within Motif. With Motif Blue Unlimited I'd be able to buy and sell this stock commission-free.

I love that Motif offers fractional shares. However, since it's a commission based platform, the effectiveness of fractional shares is arguable. Usually, I like fractional share ownership for investors with small amounts of money but because of the expensive commissions, investors with small amounts of money need to be careful about the overall expense on their portfolio.

Fractional trading is great but, in this case, the overall benefit may be weighed down by commission structure. Learn more about fractional shares from Motif.

Unique Features

Among many of the awesome features that Motif is absolutely bristling with is the motif itself. It's a very similar concept to the M1 Finance pie system (which we recommend and you can read about here). Motif takes it a step further, however, by allowing users to build custom motifs and then share them with the community who can buy in!

Custom Motifs

Motif creation page.

It's pretty simple to put together a custom motif. Below is an example of a facetious motif I made to demonstrate the capability. Please note that I am not recommending these securities. 

Notice that in any given motif you can combine ETFs and single stocks. This is a super cool feature that echoes M1 Finance and sports some of my favorite technology available to investors today.

You can set the weighting and group securities together into "folders" inside the motif. It makes the motif very visually appealing and easy to understand. Here's a motif I put together a couple weeks ago just to test the system. You can see what a published motif looks like on the Motif website.

Social Aspect

There's a large focus on creating and sharing motifs among the user base on Motif Investing. It's easy to compare the performance of your custom built motifs against the market and against others. Of course, I always encourage investors not to forget your own personal goals and objectives. Don't get too wrapped up in total return as the sole indicator of the suitability of any investment.

I do like that it's so easy to create, track, comment, and share motifs. It's a very well implemented system and you can expect to hear a lot more from me on this!

Creator Royalty Program

If you want to start making motifs and sharing them with the community, you might have an opportunity to increase your returns! Motif Investing will give you $1 every time another person buy or rebalances your motif. This is a very neat program that I'm sure will work out great for a few investors who can build a following.

In the future, you'll see some motifs from me that qualify on the creator royalty program.

Motif Impact Portfolios

Motif Impact portfolios are both retirement and non-retirement accounts designed to align with your investing philosophy and ideals. For a flat monthly fee (part of Motif Blue Unlimited which you can try for free with my link) Motif will create a customized robo-portfolio that aligns to your values.

While I haven't tried Motif Impact yet, I do know that it has a $1,000 minimum investment. You'll also be charged $10 per month once your first 3 months free expire by using my link. I do like that it gives you control and transparency to look inside your portfolio seemingly better than any other robo-adviser.

You'll have to do some research to decide if this is a good service for your needs. Check out the details on Motif's website. Because of the $10 fee per month, I'd say that you'll need to be very aware of that overall impact of that cost on your portfolio. With the minimum $1,000 investment it amounts to a 12% annual fee!

Best For:

Investors with moderate knowledge and moderate assets looking for a powerful platform to trade and create customized shareable motifs.

Because of the commission fees and monthly fees on Motif Blue you'll need to fully understand the fees and how they impact the performance of your investments. Motif really makes it possible to explore many different avenues of investing in one place.

If you prefer to use the commission structure, Motif has an option for you. If you'd rather pay a monthly subscription price and get commission-free trades and auto-rebalancing Motif has a plan for you! This platform has an incredible amount of power and flexibility.

Pros & Cons

Cons

  • Fees and commissions high for new investors
  • Motifs made by others vary in quality
  • Maybe overly complicated for new investors
  • Varying investment minimum amounts to track

Pros

  • Powerful platform with room to grow
  • Monthly fee or commission fees
  • Robo-adviser services
  • Customizable motifs
  • Advanced order types for buy/sell
  • Fractional trading on shares

Conclusion

This has been one of our longest reviews for one reason: Motif Investing offers a ton of options and power. While it's aimed a more active investor, there are options that suit even the most passive and conservative investors.

Remember that on a socially based investing platform like Motif, the investments you see others buying may not be the best for you. Only you can decide what investments suit your needs.

If you found our Motif Investing review helpful, consider signing up with our referral link. You'll get 3 months of Motif Blue for free! You'll have a lot better understanding of the Motif platform and you'll be able to avoid some of the fees during your first 3 months!

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