With so many online brokerage firms to choose from, it can be hard to narrow down the selection and find one that is the right fit for your investment goals. If you are searching for greater control over your investment portfolio while keeping the trading costs manageable, then consider what Motif Investing has to offer. Note that I do not have an account with Motif Investing therefore this is an unbiased opinion based on my analysis.
With Motif Investing, you have the ability to create your own portfolio, or motif as they call it, of up to 30 stocks or ETFs. You can select from a wide variety of funds in order to build your custom motif for a flat commission fee of $9.95. If you are interested in investing in socially conscious companies, investment trends or sector specific funds, then you will find a greater selection using Motif.
If you prefer a more simplified approach, for the same flat fee, you can choose from a catalog of over 100 pre-designed motifs that are offered in a diversity of industry sectors. Once you select a motif, using their streamlined platform, you still have the option to add or remove individual stocks or ETFs, alter segments and change the weighting of the portfolio in order to suit your interests.
Motif Investing offers individual and joint brokerage accounts and no fee Traditional, Roth and Rollover IRA’s. The minimum motif investment is $250 therefore you may end up with fractional shares depending on the amount you invest. To trade on a margin account, you will need to maintain a minimum balance of $2000.
The Benefits of Motif Investing
With Motif Investing, you get to try before you buy. Upon signing up, you can browse the motif catalog and create a watchlist in order to monitor its performance. From there, you can decide if their investing model is a match for your needs and open a trading account.
One of the strengths of Motif is the transparency of their fees. Aside from the $9.95 initial purchase of a motif, any addition or removal of a stock or ETF in a motif will cost you $4.95 per trade. There are no management fees or expense ratios while any fixed income motifs that contain ETFs, already have the management fees and expense ratios accounted for in the price.
Motif also provides quarterly or yearly rebalancing of catalog motifs. You will be informed of any change made to a motif you own and can adopt the same rebalancing at a cost of $9.95.
Another interesting feature is the ability to discuss and share investing ideas with other Motif members using an in-house platform. Whether you join the Motif social network or create a investing circle that contains a private group of investors, similar to a private Facebook group, you have control over how much information you want to reveal on your profile thanks to privacy settings.
The Drawbacks of Motif Investing
The biggest disadvantage of Motif Investing is that they do not offer dividend reinvestment. Other than receiving the dividend payout in cash, the alternative is to select stocks in a motif that pays out a stock dividend. In this case, the motif you own will receive a credit for those additional stock shares.
The investment choices are somewhat limited given that Motif only offers stocks and ETFs for purchase. There is no word yet on if or when they will begin to offer options or mutual funds at this time.
Although the commission fees are very low, there is the potential for fees to add up quickly and cut into any profits made. If you want to sell and buy several stocks or ETFs in your motif, remember that for each stock or ETF you trade, the cost is $4.95. The cost to buy more of, sell or rebalance a motif is $9.95 with a minimum investment of $250.
Overall, Motif Investing is a viable option if you are especially wanting to invest in niche investment offerings that are in addition to your existing investment portfolio you hold elsewhere.