Around the Brokerage Industry: Motif Investing

by on Sep 10, 2014

CI’s Around the Brokerage Industry series reviews public websites and digital resources offered by leading brokerages and investment firms that fall outside of our E-Monitor and Broker Monitor coverage groups.

Motif Investing is an online brokerage firm based in Rancho Cordova, CA that inexpensively and innovatively offers investors bundles of related stocks focused on a specific investing idea or “motif.” Each motif is composed of 20-30 individual stocks that can be purchased collectively for an initial investment of as little as $250 and a flat commission fee of $9.95. Clients can customize motifs before purchase by changing individual stock weights or by adding or removing individual stocks for no additional charge. Each additional share of stocks purchased within a client’s motif, however, incurs a charge of $4.95 per stock. There are almost 100 creatively named motifs developed by Motif Investing staff available such as “Caffeine Fix” and “Seven Deadly Sins”, and a Creator Royalty Program even allows users to build their own motifs that, if purchased or rebalanced, pay the creator royalties.

Motif Examples – Public Site Explore Motifs Section
Motif Examples – Public Site Explore Motifs Section
Homepage and Navigation
The firm’s public site homepage is sleek and smartly designed. Currently, it features a special 50% off promotion on rebalances, offering clients a discounted $4.95 for rebalances on motifs created by Motif Investing from September 10 to 25. A corresponding video that features a Motif Investing employee explains the importance of motif rebalancing, along with the process through which clients can accept the rebalance carried out by the firm. Additionally, the homepage is divided up into seven main tabs – Home, Explore Motifs, How It Works, Why it Works, About Us, News and Help – from which users can not only view detailed overviews of the firm’s motif offerings, but can also access investing ideas and news (through the firm’s SparkLine News section) without having to be an account holder.

Motif Public Site Homepage (Truncated)
Public Site Homepage (Truncated)
The firm’s private site homepage (Dashboard) is akin to a Facebook newsfeed through which clients can interactively discuss motifs and investing ideas with other users. In addition to the Dashboard tab, the private site is divided into five other main tabs – My Investments, Explore Motifs, Build a Motif, How it Works and Help. The Positions section of the My Investments tab features detailed information about clients’ positions, including extensive allocation details viewable by investment type, sector and motif.

Motif Private Site Homepage (Truncated)
Private Site Homepage (Truncated)
“Investing Made Social”
One of the most unique features offered by Motif Investing is its self-described “Investing Made Social” mentality, which is demonstrated in its in-built private site social network. As discussed above, the private site homepage appears and functions in a similar manner to a Facebook newsfeed. Clients can post questions and investing ideas to which other users can respond, in addition to promote their own custom motifs. Additionally, via Facebook or email, clients can invite their friends who hold accounts with the firm to join a more private Investing Circle within which each member is able to view the trading activity of their fellow members, depending on the privacy settings of the user. Clients can also participate in the firm’s Refer a Friend program that awards $100 to both the referrer and each friend that opens an account and places a motif trade.

Motif Client Trading Activity – Private Site
Client Trading Activity – Private Site
Concluding Thoughts
Motif Investing is innovative in multiple ways: Not only is the firm’s premise of investing in a broader idea as opposed to a traditional ETF unique in itself, its incorporation of social media into its private site trading platform demonstrates its understanding of the wants and needs of a younger investor. Both the public and private sites are expertly and creatively constructed and, along with the firm’s low investment minimum, should allow it to appeal to the increasingly important Millennial population.

You can find more information on Motif and other fintech startups in CI’s latest Next Generation Investing study – Transcending the Human Touch: Onboarding and Product Strategy for Automated Investment Advice.