Motif Review: Technology-Driven Thematic Investing

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Motif is a hybrid robo-advisor and broker service that offers access to stock and ETF trading, as well as thematic investing through pre-built portfolios called Motifs. The company uses data science and automation to promote thematic investing, which Motif defines asa top-down investment approach that helps investors gain exposure to macroeconomic themes and trends through managed funds or baskets of related stocks.”

The San Francisco-based company launched its first dollar-based portfolio trading platform in 2012, and it now says that it serves over 350,000 individual and institutional clients, including Goldman Sachs, J.P Morgan and US Bank.

Motif offers community-built and professionally-built portfolios, fractional share trading in real-time and access to IPOs. In 2017 Motif launched Motif Impact, or “investing shaped by personal values.” Recently, Motif teamed up with Goldman Sachs to launch five “Next Wave of Innovation ETFs,” including Data-Driven World (GDAT) and New Age Consumer (GBUY). Moving forward, Motif plans to offer Crypto Portfolios.

What is Motif

Motif offers no-fee individual and joint taxable accounts, traditional IRAs, Roth IRAs, trusts and rollover IRAs. Investors can trade stocks by purchasing in either dollars or shares, and also can trade ETFs on the platform.

Motif offers automated investing through Motif Thematic Portfolios and Motif Impact Portfolios that give access to socially and environmentally conscious companies and industries. Investors choose among a list of cleverly named motifs such as “Tech Takeout Targets,” “Housing Recovery” and “Healthy and Tasty.” Investors can also build their own motifs.

Why Motif is Worth Your Time

According to Motif’s website, “thematic investing has been around since the 1980s, but it has typically remained in the realm of pension funds, endowments, and ultra-high-net-worth wealth managers.” Previously, investors were usually stuck with investing in mutual funds, usually through their retirement plans, and that meant high fees and little personal choice.

Motif claims to offer ordinary investors an opportunity to bet on longer-term, transformational industries and trends by using data science and automation. It’s not clear, however, exactly how they do this, or how it’s different from similar funds or ETFs you can purchase through competitor discount brokers.

Motif offers investors commission-free investing in select companies at their IPO price before they are publicly available with a minimum investment of $250. As the IPO market heats up in 2019, access to IPOs and secondary offerings could be particularly attractive for risk-seeking investors.

How to Get Started with Motif

Before signing up, investors can explore Motifs without an account. After verifying your email, you can open a brokerage account by filling out an application. This is currently only available to U.S. investors.

After funding your account, you can choose from the Motif Catalog, which lists over 50 Motifs in different investment themes. At least $300 is needed to buy your first Motif. To trade on margin, you’ll need at least $2,000 in your account. Motif Impact accounts have a minimum balance of $1,000.

The platform is also a social network which offers the option to request connections with other users and follow your connections’ activities and motif ratings.

Is Motif Free?

Motif’s Next Wave Portfolio charges no annual fee, while its Motif Thematic Portfolios and Motif Impact Portfolios charge 0.50% and 0.25% respectively.

Motif’s unique pricing model also includes:

  • Free next market open trading for ETFs and stocks and $4.95 for real-time trades.
  • Professional motifs cost $9.95 per trade or $0 next day, personal or community motifs costs $19.95 or $9.95 next-day.
  • For a $19.95 per month, the Motif Blue subscription service offers three monthly commission-free real-time trades and real-time quotes, and five commission-free next market open trades for motifs built by you or another Motif community member.
  • $95 IRA closure fee
  • $65 full account securities transfer out fee

Is Motif Legit?

Motif has been a leader in the fintech revolution and is well trusted in the industry.

  • Motif is a member of the SIPC, meaning that every account is insured up to $500,000, including a maximum of $250,000 for cash claims.
  • Each Motif customer is protected up to $1.9 million through excess SIPC insurance provided by Lloyd’s of London
  • Platform leverages a leading information security management system, with secure encryption algorithms to safeguard users’ accounts and data
  • Motif is head by founder and CEO Hardeep Walia, a serial entrepreneur and former Microsoft executive.

Final Thoughts on Motif

Motif is a great option for more hands-on and experienced investors seeking to build portfolios based around themes, investing styles or multi-asset models for a low annual fee. Socially conscious investors, as well as those who want access to fractional shares, may also find the free-to-low-cost automated investing and brokerage service attractive.

Though Motif was ahead of the curve when it offered themed investing almost ten years ago, the emergence of similar brokers and the proliferation of themed ETFs in the last decade have made it easier than ever to invest your ideas with any number of brokers.

For more on how to save, read our Micro-Investing: What It Is, Why It’s for You and How to Start.

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