Motif Investing Review
- January 10, 2017
- Posted by: Jeff Gitlen
- Category: Investing
If you haven’t yet heard of Motif Investing, you’re missing out on a fun and useful means to organize your stocks while investing in a way that’s most meaningful to you, the investor. A motif is a reoccurring element in a story or design, and it accurately describes the idea behind Motif the investment brokerage. Motif is a concept-driven investment platform. As a brokerage, Motif is different because it provides stocks and ETFs in preselected bundles (or create your own) based upon what the individual investor most cares about.
There are motifs to invest in companies going green, companies involved in virtual reality, companies producing fossil fuels, and tons of other themes. Motif bundles are customizable within the bundled concepts. For example, the “No Glass Ceiling” motif is comprised of companies with female CEOs, and the investor can pick and choose where their dollars go among the various company options within the motif. This is a fun way to invest in themes and concepts important to the investor or in emerging fields such as wearable technology.
Motif was started in June 2010 by a former Microsoft executive, Hardeep Walia, who received $126.5 million in venture capital funding to get Motif up and running. Motif attracted the attention of the crème de la crème of Wall Street from the start – its investors included Goldman Sachs, JPMorgan Chase, Balderton Capital, and many more high-profile names from the financial sector. Since then, it’s been named “most innovative company” in the personal finance category by Fast Company magazine and has appeared twice in the CNBC “Disruptor 50” rankings. Motif wants investors to have more say over who they invest with, and pay less money to do it. The company also incorporates mobile platforms and social media elements, making Motif a true “next generation” investment platform.
What is Motif?
Motif is both the name of the company and the product it offers. Essentially, Motif offers stocks and ETFs in bundles, or “motifs” as the company calls them, according to theme. Within a motif the investments will share a theme, and that theme will also be the name of the motif. Over 150 motifs have been professionally built by Motif itself, and thousands more, built by Motif users, are available to browse and invest in. No matter your niche interest, chances are you can build a motif of up to 30 investment opportunities within that niche using Motif.
Interested in investing in socially responsible companies? There’s a motif for that. Want to invest in sports-related companies? There’s a motif for that, too! And investors can adjust their investing easily within their selected group of companies by dividing the percentage of their investment among particular securities with a slide of their finger or a swipe of their mouse. Users can delete and add to a preselected motif based upon their preferences, or design their own from scratch.
Cost of Using Motif
There is no monthly fee for using Motif, which is great for investors tired of monthly maintenance charges. Buying each motif of up to thirty securities costs a single transaction fee of $9.95. And for another $9.95 commission fee, Motif lets you trade within a single motif. You could swap out every one of the securities within your motif and the cost would come to only about $0.33 each, but that fee applies to each motif you want to trade within. Or, Motif will let you trade a single stock for just a $4.95 commission. Furthermore, the initial investment into Motif is low. There is no true minimum to start an account – only a $250 minimum balance in order to make a trade.
Searching for Motifs Within Motif
There are many different ways to search for motifs. It wouldn’t take too long to scan the list of approximately 150 of the motifs offered directly by the company, for starters. But there are also thousands of motifs created by users and published by Motif on its website for others to invest in. Users can look for motifs by industry, current events, keyword, and in other ways. It’s possible to search by factors such as rate of change, too. And if you don’t find the motif you’re looking for, you can create your own – still for the one-time flat fee of $9.95.
Motif's Social Network
Motif can be accessed on a personal computer, iPhone, Android device, and even the Apple Watch. Perhaps this is why Motif’s social network aspect is increasingly popular. When logged into the Motif community, you can share investment tips and the motifs you’ve created. What’s more, users can earn royalties when other users like and use their unique motif for their own investments.
Motif BLUE and Motif Horizon
Motif has a monthly subscription program aimed at the more active investor. It comes in three levels and accompanying pricing structures, from $4.95 to $19.95 per month. The most basic plan gives the subscriber one free auto-invest and one free auto-balance of a motif per month. The highest-priced plan offers unlimited rebalancing of all an investor’s motifs, and three free auto-invest moves per month, plus three commission-free trades and some secondary benefits such as free market reports. Another program, Horizon Motifs, seems to be aimed at the less active investors and employs more a robo-advisor approach. With Horizon, investors can select a time horizon, similar to retirement target date funds, and Motif does the rest. One nice feature of Horizon is that it does away with the $9.95 commission entirely.
Where Motif has Room for Improvement
Motif doesn’t allow users to automatically reinvest dividends, which would be a really nice feature to add. If users want to reinvest they’ll still have to do so manually. But really, compared to its many innovations and low prices, its fairly easy to overlook this flaw. Some users also note that the interface is a bit awkward when making trades and customizing motifs. For the price per trade and the lack of maintenance charges, this is again a flaw easy to ignore.
Motif lets you find, build, and customize investments in a unique way. While for many investors it may not replace all their current investment needs, there’s no denying it’s a unique way to diversify AND focus your securities. Motif is low-cost and a great way for beginning investors, such as millennials, to get excited about actively managing their portfolios. If you haven’t yet given Motif a try, it’s definitely worth looking into.