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Investing

Blooom Review 2019

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Managing a 401(k) plan wasn’t in your job description, so you may not be giving your employer-sponsored retirement account the attention it needs. That’s where Blooom comes in. It works a bit differently than most other robo-advisors: Blooom’s only purpose is to manage your 401(k).

With Blooom, there’s no need for 401(k) rollovers or transfers of funds into a new account. You give this robo-advisor permission to access your existing retirement account, and Blooom ensures that you’re maximizing your account’s earning potential. Blooom tailors your investments to factors such as your age, how close you are to retirement and your risk appetite.

Blooom
Visit BlooomSecuredon Blooom’s secure site
The Bottom Line: Blooom could be a useful option if you have a work-sponsored retirement plan that you need some extra assistance with.

  • Blooom makes adjustments to your account within seven days of signing up.
  • You maintain full control of your account, but Blooom will make trades on your behalf once you sign up for their services.
  • There is a low monthly fee for management and monitoring.

Who should consider Blooom?

Blooom is a great option for novice investors who aren’t sure how to maximize employer-sponsored retirement accounts. If your employer offers you a 401(k), 403(b), 401(a), or a 457 retirement account, Blooom can manage it in a way that most benefits you.

Note that individual retirement accounts (IRAs), healthcare savings accounts (HSAs), and 529 college savings plans are not eligible for management by Blooom.

Blooom scans your account to find any excessive or hidden fees that you’re paying now, and moves your money into investments with the lowest fees possible. Any time an investment isn’t performing as well as it should, Blooom may rebalance your portfolio to keep you on track for your retirement goals.

As a robo-advisor, automation is a big part of the process. This algorithm-driven app oversees and maintains your retirement account. However, you can also chat with a live financial advisor if you have questions or concerns.

Blooom fees and features

Amount minimum to open account
  • $0
Account fees (annual, transfer, inactivity)
  • $108 annual fee
  • $0 full account transfer fee
  • $0 partial account transfer fee
  • $0 inactivity fee
Automatic rebalancing
Tax loss harvesting
Offers fractional shares
Customer supportChat, Email

Management fees

Blooom has one flat fee: $120 per year or $30 per quarter. That sounds enticing, since most robo-advisors are based on a percentage, rather than a flat rate. Wealthfront and Betterment, for example, charge annual fees of 0.25% of your total balance. But on a percentage of balance basis, $120 a year can look quite different depending on how much money you have in your account.

Fees mentioned in this article are accurate as of the date of publishing.

Account balanceBlooom fee as a percentage of assets
$100,0000.12%
$75,0000.16%
$50,0000.24%
$25,0000.48%
$10,0001.2%
$5,0002.4%
$2,5004.8%
$1,00012%

While it’s good to be able to start investing with a little bit of cash, the flat fee doesn’t work in your favor. With $1,000 invested, you’re paying 12% a year in fees. But if your investments are around $50,000, you’ll be on par with competing robo-advisors. And the more you invest, the lower that fee is, percentage-wise.

How does Blooom analyze your 401(k)?

A Blooom analysis of your existing company-sponsored retirement account: 401(k), 403(b), 401(a), or a 457 account is completely free. When you sign up for Blooom, you’ll answer a few questions about your investing habits to help them recommend the best strategy for you.

Then you are asked to link your existing account to Bloom. To repeat, you’re not moving your funds or your investment account; you’re just giving Blooom access to an existing account.

Blooom will show you what your current investment setup looks like compared to your ideal investment strategy. You’ll compare diversification, allocation and fees. If you’d like to move forward with Blooom, they’ll move the trades in your account to ones with the lowest flat fee.

It takes about seven business days for your account to get adjusted, depending on your company’s account setup. While machines are doing some of the work, Blooom says registered advisors and account coordinators are carefully managing the accuracy and quality assurance of all accounts.

Keep in mind that the type of investment account you have can inhibit your Blooom investment strategy. For instance, if you have a portion of your investment account in a self-directed brokerage, Blooom will leave it alone.

Investment selection and management

When trying to figure out what works best for your ideal plan, Blooom looks to:

  1. Ensure you have the right stock-to-bond ratio for your retirement time frame.
  2. Diversify your asset classes to as many as your retirement fund allows.
  3. Pick the lowest funds for each asset class.

While you can’t approve transactions before Blooom makes them, you’ll get an email every time a change is made to your investments.

Rebalancing is done on a per-fund basis. Blooom says that if your funds have transaction restrictions, they may not be included in your asset rebalance.

Blooom doesn’t change your contributions or withdrawals; those are still handled directly through your account custodian.

Strengths of Blooom

  • Live analyst assistance: One downside to some robo-advisors is that they lack the option to discuss strategy or investment choices with human representatives. With Blooom, you can live chat with financial advisors on any pressing money questions you have. Investing isn’t one-size-fits-all, and you may need to discuss your options occasionally.
  • Blooom is a fiduciary: Fiduciaries are legally required to act in your best financial interest, but not all financial advisors are fiduciaries. Your custodian may not be a fiduciary, which means you might not be getting the attention your portfolio needs to earn the best return. You can rest assured Blooom will make recommendations based on what’s right for you.
  • No account minimum: Many investment accounts request a minimum to start investing. Because Blooom is only helping you manage your employer-sponsored retirement account, they don’t need you to have a minimum to invest. That means you can start using Blooom as soon as you have access to your work 401(k).

Drawbacks of Blooom

  • Limited to work-sponsored accounts: If you don’t have an employer-sponsored plan or you work for yourself, Blooom isn’t going to work for you. They only offer support for 401(k), 403(b), 401(a) and 457 accounts. HSAs, 529s and IRAs aren’t accepted.
  • Smaller balances pay more in fees: Blooom flat fee pricing structure is very simple, and easy to understand. The downside is that clients with smaller balances are paying much more in fees, percentage-wise, than may be available with other robo-advisors.
  • Skews toward more aggressive investments: Blooom believes that the younger you are, the more you should invest in stocks. The older you get, the more you move towards less-risky bonds. That means if you’re more than 20 years away from retirement, Blooom assumes you can handle the ups and downs of the market. If you’re not comfortable with more aggressive investing choices, you may not always agree with how Blooom manages your money.

Is Blooom safe?

All investments carry risk, and your 401(k) is no different. If you feel your investments are too aggressive to your liking, you can always talk to Blooom about adjusting your portfolio.

Blooom discusses their security measures in a way many other robo-advisors don’t. They talk about encryption levels, secure servers, and the multi-level verifications in place to confirm it’s really you requesting changes to your account.

Because Blooom is a fiduciary, they are required to act in your best interest. They don’t hide fees and are upfront about their monthly fee. You can speak with experts any time you wish, like when the market fluctuates. Blooom alerts you any time there’s suspicious activity on your account. They’re also registered with the Securities and Exchange Commission (SEC).

Is Blooom right for you?

If you have the opportunity to save for retirement through an employer-sponsored plan, using Blooom could help make sure you’re getting every penny you should be. Not all employer plans have advisors that act in your best interest, which is where Blooom comes in. If you don’t like it, you can cancel any time without any fees.

However, if you don’t have a plan offered through your employer, you’ll likely use an IRA to save for retirement. Blooom doesn’t help with those, so there’s no use in signing up unless you have a work-sponsored account.

If you meet the requirements, Blooom may help you max out your earning potential, giving you the most money when you retire. If you don’t, there are plenty of other robo-advisors available to help you manage an IRA or other investment accounts.

Open a Blooom accountSecured
on Blooom’s secure website

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Dori Zinn
Dori Zinn |

Dori Zinn is a writer at MagnifyMoney. You can email Dori here

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Investing

USAA Investments Review 2019

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

USAA is known for their great workplace and customer service. One in four employees are veterans or military spouses. These are attractive traits to draw in customers who are military service members.

USAA offers a slew of different products, including car, health and homeowners insurance. They also have checking accounts, mortgages and personal loans available as well, though this review will focus on the company’s investing products. While most of USAA’s offerings target military service members and their families, anyone can open an investment account.

USAA Investments
Visit USAASecuredon USAA Investments’s secure site
The Bottom Line: Unless you’re already a member of USAA and want to keep your investments within one company, you don’t need to put your money here.

  • A $3,000 minimum balance is hefty.
  • High costs per trade and other fees.
  • Longevity is attractive but costs are a turnoff.

Who should consider USAA Investments?

Online brokers are a great way to let you manage your money, whether you’re new to investing or you’ve been handling them for years.

If you’re already a USAA member, enlisting them to be your online broker is enticing. Keeping your money all in one place can be a convenient option, and you can talk to real, live people when you have investment questions or concerns.

If you’re looking for a specific kind of account, such as a custodial or SIMPLE IRA, you can find it at USAA. Their long list of various account types can be a big draw if you need something in particular.

USAA Investments fees and features

Stock trading fees
  • $8.95 per trade
Amount minimum to open account
  • $500.00000
Tradable securities
  • Stocks
  • ETFs
  • Mutual funds
  • Bonds
  • Options
Account fees (annual, transfer, inactivity)
  • $70 full account transfer fee
  • $20 partial account transfer fee for a security through the Direct Registration Service (DRS); $0 to transfer a security that is not eligible for DRS.
  • $10 if less than $100 in account and no activity for 12 months
Commission-free ETFs offered
Mutual funds (no transaction fee) offered
Offers automated portfolio/robo-advisor
Account types
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • 529 Plan
  • Joint taxable
  • Rollover IRA
  • Rollover Roth IRA
  • Custodial Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
  • Custodial IRA
  • SEP IRA
  • SIMPLE IRA (Savings Incentive Match Plan for Employees)
  • Trust
  • Guardianship or Conservatorship
Ease of use
Mobile appiOS, Android
Customer supportPhone, 4 branch locations
Research resources
  • Earnings press releases

Strengths of USAA Investments

Extensive choice for different accounts: You’ve got your choice of different accounts to choose from when signing up for a USAA brokerage account. If you’re a business owner and need an SEP or SIMPLE IRA (Savings Incentive Match Plan for Employees), you can take your pick. If you need a Custodial IRA or 529 Plan, they’re available. There’s also joint accounts, trusts and conservatorship accounts.

Great customer service: While a machine answers your phone call, it doesn’t take much time or effort to get to a human representative. Whether you have a question about certain stock performance or less-risky exchange-traded funds (ETFs), the easy customer experience spans across USAA’s product offerings.

A robo-advisor option is available: To complete with robo-advisor companies, USAA offers their Digital Investment Advisor. If you like the idea of a robo-advisor and a brokerage in one, USAA has the best of both worlds for you. Keep in mind that the annual fee for the robo-advisor is 0.50% a year — that’s double other leading robo-advisors like Wealthfront or Betterment.

Drawbacks of USAA Investments

High trading costs: $8.95 per trade is pricey. Other companies charge anywhere from $4.95 to $6.95 per trade. This could deter new investors from making any transactions and active investors might find this too costly for their taste.

Lots of fees: There’s a fee for almost everything. A transfer fee, whether partial or full, can range from $20 to $70. If you aren’t active in your account for a year, you’ll get charged $10 and then your account will close. Make sure you fully understand the rates and fees, or you might get stuck paying way more than you expected.

Restricted expansion to other products: While USAA Investments is open to the general public, it’s hard to get access to their other products — such as health insurance or loans — unless you’re in the military or related to a service member.

Limited info available online: If you have specific questions or concerns regarding your investment account, you may have trouble tracking down answers on USAA’s website. Though many competitors have detailed FAQs to help consumers, you may need to speak with a customer service rep to find answers at USAA.

Is USAA Investments safe?

Investing in any form carries risk. As you look into different investment accounts, it’s important to see if a company has security measures in place in case fraud or other theft takes place.

USAA doesn’t have a policy in place that ensures members get their money back in the event of fraud, identity theft or other malicious activity. The most you can do is call to report suspicious activity, but there’s no guarantee you’ll get a refund for the lost cash. However, USAA is a member of the SIPC — Securities Investor Protection Corporation — which means your money is insured if the company goes under.

Final thoughts

For current USAA members, having your investments under the same umbrella as some other products you use could be a useful option. But for those who don’t serve in the military or those who aren’t related to servicemembers, you may find better options elsewhere.

A high account minimum with high trading costs means you can find less-expensive options elsewhere.

Open an USAA Investments accountSecured
on USAA Investments’s secure website

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Dori Zinn
Dori Zinn |

Dori Zinn is a writer at MagnifyMoney. You can email Dori here

Advertiser Disclosure

Investing

TD Ameritrade Essential Portfolios Review 2019

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

TD Ameritrade has a long history of helping investors. But they’re somewhat new to the robo-advising game.

The Essential Portfolios is TD Ameritrade’s robo-advisor option. It aims to attract young investors who like the idea of letting their investments grow on their own with minimal attention. The Essential Portfolios is an alternative to other robo-advisors on the market today.

Like other robo-advisors, you’ll complete a questionnaire to see what kind of investor you are. The Essential Portfolios puts your cash into low-cost exchange-traded funds (ETFs). This is a quick and easy way to diversify your portfolio without much work from you.

TD Ameritrade Essential Portfolios
Visit TD AmeritradeSecuredon TD Ameritrade Essential Portfolios’s secure site
The Bottom Line: TD Ameritrade customers will love this robo-advisor option to keep their investments within one company.

  • A 0.30% annual management fee is the only charge.
  • Has a long list of account offerings.
  • Hundreds of branches nationwide.

Who should consider TD Ameritrade Essential Portfolios?

Robo-advisors are a good option for investors who don’t have the time, energy or expertise to micromanage their investments. Essential Portfolios is great for investors who prefer to invest passively.

Because it’s part of TD Ameritrade, you get the easiness of a hands-off robo-advisor and the chance to talk to a financial professional, if needed. For investors who prefer the help of a human, you might choose this over another robo-advisor.

Their laundry list of account types is another big draw. Individual retirement accounts (IRAs) are a common offering. But Essential Portfolios also offers joint and guardianship accounts. This expands their reach even more.

TD Ameritrade Essential Portfolios fees and features

Amount minimum to open account
  • $5,000
Management fees
  • 0.30% annual advisory fee
Current promotions

Trade commission-free for 60 days + get up to $600

Account types
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • Joint taxable
  • Rollover IRA
  • Rollover Roth IRA
  • Coverdell Education Savings Account(ESA)
  • Custodial Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
  • Custodial IRA
  • SEP IRA
  • Solo 401(k) (for small businesses)
  • SIMPLE IRA (Savings Incentive Match Plan for Employees)
  • Trust
  • Guardianship or Conservatorship
Portfolio
  • 8 asset classes
Automatic rebalancing
Tax loss harvesting
Tax loss harvesting detailCustomers are automatically enrolled in tax loss harvesting with no additional cost. Portfolios are monitored daily for tax loss harvesting opportunities.
Offers fractional shares
Ease of use
Mobile appiOS, Android
Customer supportPhone, 24/7 live support, Email, 360 branch locations

Strengths of TD Ameritrade Essential Portfolios

  • An account type for everyone: Individual taxable accounts and IRAs are one thing, but the Essential Portfolios offers a ton of other accounts for investors. If you need a Joint taxable account, Trust account or Guardianship or Conservatorship account, you can get that here. The list of account types is exceptional and longer compared to many industry competitors. For example, the Essential Portfolios offers a Coverdell Education Savings Account(ESA) while competitor Wealthfront does not.
  • One straight-up fee: While other TD Ameritrade accounts have additional fees, the Essential Portfolios only has one — a 0.30% annual advisory fee. This is a little more compared to other robo-advisors. Wealthfront and Betterment have a 0.25% fee.
  • Tax-loss harvesting: If a particular investment isn’t performing well, Essential Portfolios will sell it at a loss and replace it with a better-performing one in an attempt to offset capital gains tax liabilities. While losing money isn’t ideal, the goal is to rebound with the new investment quickly so you aren’t down for very long.
  • Round-the-clock support: If you can’t make it into one of their 360 branches, you can chat with a financial professional anytime. Essential Portfolios lets you Phone,Email or 24/7 live support.
  • Socially responsible investing: If you want your money to go beyond long-term earnings, this is a great perk. The Essential Portfolios offers environmental, social and governmental investment principles. For investors that are looking to make a difference but don’t have mega cash donations to back it up, this might entice you to join TD Ameritrade. A little bit can go a long way.

Drawbacks of TD Ameritrade Essential Portfolios

  • Limited asset classes: TD Ameritrade doesn’t lie when they say it’s the “essentials.” They offer 8 asset classes while Betterment offers 12. The more asset classes available, the more spread out your money is. The less that is offered, the more money you could stand to lose if something goes wrong, like a stock market crash.
  • Minimum account requirement: Essential Portfolios requires at least a $5,000 investment to start using the service. Competitors in the market can capitalize on lower (or no) minimums where TD Ameritrade requires thousands of dollars. Wealthfront only requires $500 and Betterment doesn’t even have a minimum.

Is TD Ameritrade Essential Portfolios safe?

All investments carry risk, even robo-advisors like the TD Ameritrade Essential Portfolios. But TD Ameritrade has been around for 40 years and is a leader in the investing space.

TD Ameritrade guarantees you’ll get your money back from unauthorized activity on your account. They’re a member of the FDIC and SIPC with more than $1.8 billion in assets under management. This should give you the peace of mind that, should anything happen, your money is safe in case of a breach.

Final thoughts

As you compare Essential Portfolios to other robo-advisors, keep product offerings in mind. Access to lots of different account types, minimal fees and socially responsible investing are all good reasons to sign up.

But a high minimum opening investment could turn you away. Other companies offer many of the same highlights as Essential Portfolios, but with a much smaller account balance. If you’re just starting your investment journey, $5,000 is a lot and might keep you from signing up.

Although, if you have the cash, it may be worthwhile. The expert help available to customers 24/7 is a big reason to use a company with some clout. For current TD Ameritrade customers, this is an easy addition to your other accounts. For those who are looking to make the switch, their lengthy history serving investors might be enough to grab your attention — and money.

Open a TD Ameritrade Essential Portfolios accountSecured
on TD Ameritrade Essential Portfolios’s secure website

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Dori Zinn
Dori Zinn |

Dori Zinn is a writer at MagnifyMoney. You can email Dori here