Motif Investing is closing down as of May 20th 2020. If you choose to do nothing, your accounts will transfer to Folio Investing, and this process will be automatic. However, you do have the choice to choose a new brokerage account for yourself instead. As a former Motif user myself, here's why I think M1 Finance would be the best choice for your next brokerage account. Let's discuss some of the Similarities and Differences between Motif Investing and M1Finance.
Motifs vs Pies:
With Motif and M1 Finance you can select pre-made portfolios, combine pre-made portfolios to create a hybrid, or create your own portfolio! Motif Investing called these Motifs, while M1 Finance calls them Pies. This allows you to select multiple companies you would like to invest in, and purchase them all in one transaction. This was a game changer when Motif Investing first offered this to the public, and I jumped at the opportunity! This essentially allowed you to create your own Index Fund or Mutual Fund like portfolio. I used Motif Investing for over 5 years, up until I started using M1 Finance last year.
The great thing about both platforms is the ability to deposit a small amount of money, while being able to buy into the companies you believe in. No matter the price! This means that for as little as just $1 you could buy into high priced stocks like the MAGA Stocks: Microsoft (over $200), Amazon (over $2K), Google (over $2K), Apple (over $200) per share.
Lower Minimum Buys:
With Motif in order to add more money to your motif, you needed to either have the paid subscription to automate it, and you needed to buy-in with a minimum of $250 each time. With M1 Finance you only need $100 to open your account or $500 for a Traditional or Roth IRA, however once your pie is rolling, you only need a minimum of $10 to add money to your pie, and $1 per individual stock or ETF within your portfolio.
No bonuses for other users buying your pie, other than the current referral bonus available at the time if a new user joins based on you sharing your pie with them. This is one feature I liked about Motif, as you could make several portfolios, and whenever other users bought into your portfolio you would receive commission. It was a small amount at just $1-$2, but something that you could continue to receive even after their initial purchase if they continued to put money into it.
Rebalancing and Reinvesting Dividends:
Motif didn't offer rebalancing free of charge. All trades within M1 are free, whether you are buying, selling, or rebalancing. You have the ability to reinvest your dividends, as long as your cash balance is above $10. You can setup automatic reinvestment of your dividends into your whole pie, not just back into the stock that paid the dividend, once your total cash balance is over $10. You can set a higher cash balance threshold if you choose.
M1 Finance is essentially Motif, without the trading fees! Although you can upgrade to the M1 Plus account if you would like an additional afternoon trading window to make your purchases. Otherwise, your trades can only go through once per day if you put in your order before 10am EST.
Why M1 Finance?
Pretty Much the Same App, with less limitations, more automation, and no fees! Instead of a maximum of 30 stocks or ETFs in a Motif, you have a maximum of 100 stocks or ETFs in a your M1 Pie. Both have the option to automate your investing, add money to your fund in order to rebalance back to the levels you set for each stock or group of stocks, and allow you to purchase fractional shares!
Balance Transfer Bonus:
If you transfer a balance of greater than $100K, you will receive at least a $250 Bonus, up to a $2,500 Bonus. This bonus lasts through the month of May.
Folio Investing vs M1 Finance
The alternative you have to selecting your own new brokerage is to go with the new owner of Motif accounts if you take no action before May 20th, and that is Folio Investing. Is M1 Finance a better platform than Folio Investing? Well one of the major differences is that Folio Investing will charge you fees, when M1 Finance is essentially the same as Motif and Folio Investing but without the fees? What does FolioFirst have to offer?
Similar to Motif and M1 Finance, with their Basic Plan you can invest in groups of stocks and ETFs called Folios. Just like M1 Finance, Folio Investing also allows you to invest in up to 100 total stocks or ETFs within your Folio. There are 160+ ready to go folios that you can choose from. However Folio Investing charges $15 per quarter, and charges $4 per trade.
With the unlimited plan, you can make up to 2000 "commission free trades", so you don't have the individual $4 charge per trade. However you are charged $29 per month instead of $15 per quarter for this plan. Or you can save slightly by paying $290 for the annual plan, saving you 2 months worth of fees. However, that's still almost $300 per year in fees, compared to ZERO fees with M1 Finance.
The one feature Folio Investing has, is the ability to make market, limit, stop, and stop-limit orders...for a fee of course! If you have the basic plan it is $10 per trade or $3 per trade with the Unlimited Plan. With M1 Finance you have only 1 trade window per day with it's free basic account, or 2 windows if you choose to upgrade to their M1 Plus Account. The M1 Plus upgrade has a few other features as well, like a high yield cash management account, and the ability to borrow against your investments. These are not features I personally use, but may be of interest to others.
So what's keeping you from switching to M1 Finance? It's essentially a free version of Motif with less limitations and no fees! If you're a passive investor, and like to automate your investments into the individual stocks or ETFs you are interested in over a the long haul, then this is the perfect time to switch to M1 Finance!
I have a referral link available in the description and comment section below, so let us know what you think in the comments below. If you're a current or former Motif user, let us know what decision you made in the comments below. Did you stick with Folio Investing? Did you switch to M1 Finance? Or did you choose an alternate route, and if so what brokerage did you choose?
AJ Mobile Money
Husband | Father | YouTuber | Former ATLien
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