Starting at $45
401(k), 457, 403(b), 401(a), IRA
In 2003, automated trading accounted for approximately 15% of the market volume. That figure has skyrocketed to 70%–80% by 2020, according to stock market statistics.
But did you know that you can use a robo-advisor to help you with your retirement investments? With our blooom review, we’ll show you the ins and outs of the online investment advisor. Also, we’ll teach you the importance of early investing in your pension fund, so bear with us.
What is Blooom?
Founded in 2013 and headquartered in Leawood, Kansas, blooom is a robo-advisor that focuses on the extensive online investment management of your employer-sponsored retirement plan. In fact, the blooom robo-advisor is one of the few financial management companies oriented towards 401(k) and IRA plans, along with 403(b), 457, 401(a), and Thrift Saving Plans.
In addition to creating and managing your portfolios, blooom will help you spot and reduce hidden investment fees. Given the fact that such costs could be above average, their reduction could improve your assets’ overall performance.
Besides the robo portfolio management, blooom Inc. offers access to a human financial advisor who you can turn to whenever in doubt.
The company is fiduciary, meaning that it’s obliged by law to act in your best interest. In other words, it mustn’t manage your account in a way that will generate more profit for the company.
How Does Blooom Work?
Currently, blooom has over $5 billion in assets under management for more than 25,000 investors. The technology it uses to optimize accounts resembles the one a human advisor would implement. Only that the blooom pricing and costs are far lower.
The company has a free analysis tool that reviews your retirement plan to figure out how well your investments suit your risk preferences and ultimate goals. The only thing you need to do is open an account with blooom, link it with your retirement account, and fill in a risk profile.
Having reviewed your account, the company will show you where you stand and recommend the stock/bond mix ideal for your situation. If you’re satisfied with the company’s suggestions, you can sign up for the blooom investment account. Once you do so the digital manager will take care of everything.
Who Is Blooom Best For?
Considering that blooom is a robo-advisor, it certainly isn’t meant for active traders or investors. Quite the contrary, this investment management service is intended for hands-off investors who have little to no experience.
Simply put, the service is ideal for those who want to open a retirement account and have it managed so that they don’t have to pay great attention to it.
The platform offers a range of retirement plans, involving 401(k)s, 401(a)s, 403(b)s, 457(b)s, IRAs, and Thrift Saving Plans.
Blooom Service Overview
According to retirement stats, only 16% of Americans are on track with their retirement savings, while even 52% are behind. To prevent this from happening, it’s wise to start investing in retirement asap.
Blooom Inc. focuses on two main retirement management services: employer-sponsored retirement plans and individual retirement accounts (IRAs). Let’s dissect them both!
Employer-sponsored retirement plans
Ever since its foundation, blooom was geared exclusively towards this particular niche. At the time, there were very few companies providing 401(k) management services. Even though some robo-advisors, such as Betterment, included 401(k) in their offer, blooom 401(k) is still the only service that allows a client to manage their plan on their own.
In addition to 401(k)s, blooom covers TSPs, 403(b)s, and 457s. The greatest advantage of these plans is that they can be managed regardless of where they are opened. Plus, your employer’s consent or cooperation isn’t required.
It’s worth mentioning that all blooom investments are under your control. The company doesn’t have custody over them. It just functions as an investment and money management advisor.
Given that it works with your current employer plan, blooom will create your portfolio according to the investment options stated in it. However, it’s not the only thing the company will do. It will also analyze those options and put your money in the funds that suit your portfolio best. This way, it will help reduce your investment fees.
In numerous blooom reviews, the company is acknowledged for its free portfolio analysis. Its main purpose is to discover unnecessary charges you’re paying without even being aware of them.
While building your portfolio, the company will implement index-based ETFs and low-priced mutual funds. Unfortunately, it doesn’t work with individual stocks. If you happen to have them in your plan, the company will sell them and move to adequate ETFs.
Yet, this doesn’t apply to your company’s stock. You may retain the position you’ve already had, but it’s recommended that it doesn’t surpass 10% of your entire portfolio value.
Individual Retirement Accounts (IRAs)
Blooom IRA was included in the company’s offer just a few years ago. It’s quite akin to other employer plans. First, blooom assesses your portfolio and moves your funds into low-priced ETFs that comply with your risk tolerance and objectives. Typically, those funds have minimal expenses in their class.
Possibly the most significant downside of blooom IRAs, which is the subject of many negative blooom.com reviews, is that you need to open your account with Charles Schwab, Fidelity, or Vanguard.
This, however, isn’t such a big deal as it may seem at first sight. The three brokerages are among the best retirement management companies across the USA. As such, they provide some of the best alternatives for IRAs. Given that, myriads of investors have already opened their accounts with the brokerages.
Unlike the bloom 401(k)s, which are under your control, blooom retirement accounts are managed exclusively by the company. You cannot choose any specific investments, but you do have the possibility to modify your investor profile.
In numerous reviews of blooom, the company has been acclaimed for its financial advisors. While other brokerages charge for this service, blooom offers it for free.
The advisors are at the clients’ disposal on weekdays, 9 a.m. to 4 p.m. Central Time. Whenever you need help, you can contact them via a contact form or a live chat on the company’s website. Live, video, or phone call sessions aren’t available. Depending on the question and the membership plan, it may take two or three days to get a response.
As long as you use blooom financial management services, you’ll have access to an advisor at no extra fee. Considering that a financial advisor may charge an annual fee ranging from 0.5% to 2% of your balance, we can conclude that blooom’s services are among the cheapest on the market.
None of the blooom 401k reviews would be complete without mentioning other extraordinary features that the company boasts of.
Expectedly, a personalized portfolio is included in all of the company’s automated financial planning services, regardless of the membership plan. It evaluates your funds and selects the ones that match your situation and investment goals. This way, it can minimize and reduce investment fees you weren’t even aware of.
Every 95 days, blooom will review your portfolio to keep it on track with the market. This is referred to as automatic rebalancing, and it aims to maintain the target portfolio options, and ultimately, attain your investment goals.
In case blooom detects a suspicious withdrawal activity from your account, it will immediately alert you by sending a text message.
Priority advisor access
In our blooom review, we’ve already mentioned that the company provides a free online financial advisor. But not all members will get the response within the same period of time. Those who subscribe to higher plans will have priority over those who signed up for cheaper plans.
Blooom Pricing and Fees
Blooom prospective clients may choose among three pricing plans: Essentials, Standard, and Unlimited.
The annual subscription for the Essentials plan costs $45. The package is very basic and doesn’t include many features. It provides portfolio analysis and management, reduction of hidden fees, and automatic rebalancing.
The Standard plan is a bit pricier but more inclusive in terms of services. For $120 a year, you’ll get an opportunity to place trades. You’ll also be alerted whenever the blooom investing advisor notices a suspicious withdrawal from your account. Ultimately, you’ll have access to a human financial advisor in case you need their help.
The Unlimited Plan is the most expensive. For $250 a year, you’ll get access to all the services covered by the two previous plans, plus priority advisor access. This means that you’ll be able to chat with your financial advisor via live chat instead of waiting for two-three days for their response.
The blooom referral program is also available for the company’s faithful clients. Those who join the program may get a $40 Amazon gift card whenever a new member registers using their referral link. New clients will also get a $40 discount, meaning that they may join bloom for as low as $5 a year.
Blooom Customer Reviews
We’ve been digging through the internet to find both positive and negative customer reviews of blooom. But since the company is relatively new, it doesn’t come as a surprise that there are neither complaints nor appraisals on the web.
We even didn’t manage to find any blooom reviews on BBB. In fact, the company had only one complaint from 2019 regarding billing, which was successfully resolved.
What does the lack of critiques mean? Well, it may definitely suggest that the company lives up to its clients’ expectations, so they don’t feel the urge to complain or warn other prospective members about the advisor’s downsides.
To help you choose an online investment advisor that will meet your needs best and help you accomplish your goals, we’ll now compare blooom with its competitors.
Blooom vs Betterment
Betterment is the greatest blooom’s rival when it comes to the management of employer-sponsored plans. But the striking difference between the two investment advisors is that you can’t open an account independently with Betterment. Instead, your employer must seal a contract with the company for the plan management.
Blooom asset management options are poorer than those of Betterment. Yet, Betterment is pricier. It charges a 0.25% fee for its advisory services on the majority of its accounts. Blooom’s packages that include a financial advisor start at $120 annually. Betterment’s premium service fee for accounts exceeding $100,000 amounts to 0.4% of the portfolio balance, whereas blooom’s Ultimate Plan costs $250 a year.
Let’s not forget about the minimum investment — while you can start with 0$ with blooom, Betterment requires you to invest at least $500.
Lastly, Betterment robo-advisor also allows automatic portfolio rebalancing. But, unlike blooom, it can’t place trades.
Blooom vs FutureAdvisor
Besides Betterment, FutureAdvisor is one of the greatest blooom competitors. The company provides two levels of service — a basic and a full-scale investment. The former involves a free analysis provided by a robo-advisor. Once it does it, the financial technology company will give you suggestions which you may or may not follow.
The latter is applicable only for Fidelity or TD Ameritrade accounts. If you opt for it, you’ll have to pay a fee of 0.5% of your total portfolio value. Initially, FutureAdvisor may be cheaper than blooom if you own a small portfolio. Yet, the larger the portfolio, the greater the price. If your portfolio increases, you may end up paying more than you planned.
As mentioned throughout our review of blooom, the fintech company focuses solely on retirement accounts. FutureAdvisor, on the other hand, provides both standard investment and retirement accounts.
Blooom vs Personal Capital
Personal Capital focuses on human advisors, so it’s not surprising it’s a bit pricier. Plus, it has an extraordinary collection of robo-advisor tools, such as a free analyzer, a retirement planning and investment check-up tool, to name a few.
Personal Capital charges an account management fee of 0.89% for the portfolio balances up to $1 million. For bigger accounts, the cost is lower, reaching 0.49% for amounts exceeding $10 million. The company offers a range of IRAs and investment accounts, as well as trust. But, unlike blooom fintech, Personal Capital won’t manage your 401(k) account for you, though it will give you much helpful advice.
Blooom vs Acorns
Starting at just $1 per month, we could say that Acorns is undoubtedly among the cheapest online robo advisors. What makes it stand out from its competitors is its unique rounding feature. Once you link your accounts with the app, it will round each of your purchases to the next dollar. This way, you’re investing in your ETFs portfolio without spending too much money.
As opposed to blooom, which focuses on retirement accounts with greater savings balances, Acorns is more driven to those who are just starting their investment journey. It supports taxable investment ($1 a month) and retirement accounts ($3 per month). For $5 a month, you can even open an account to save for your children’s college.
To finalize our blooom review, we’ll briefly discuss what we liked and didn’t like about it.
The fintech company is one of the few that are geared towards employer-sponsored retirement plans. While its competitors mainly offer IRAs and taxable accounts, blooom includes the management of 401(k) accounts. The choice of such an exclusive niche helped blooom shine among other best online financial advisors.
What is also praised in many blooom reviews on the web is the fact that the company will manage any 401(k)s, regardless of where the account holder is employed or has their account opened. A partnership with an employer is not required.
To become a blooom’s client, you don’t need to make a big investment — the minimum you can start with is $0. The free analysis that the robo advisor performs will detect all your hidden fees and give further suggestions on reaching your investment goals.
What smartphone enthusiasts won’t like is the lack of a blooom app. Currently, you can access the robo-advisor only via the web browser. But we do hope that the company will enter the mobile scene soon.
- Automated investment management of 401(k) accounts
- No account minimum and hidden fees
- Free 401(k) and IRA analysis
- Access to a human financial advisor
- Suspicious activity alerts
- Limited to retirements accounts only
- IRA accounts restricted to Fidelity, Vanguard, or Charles Schwab
- Limited risk tolerance assessment
- No mobile app
Is blooom legit?
Yes, it is. Blooom is an SEC Registered Investment Adviser, and as such, it has to comply with the strict rules and standards that the regulator imposes.
Is blooom a fiduciary?
Yes. Being a fiduciary, blooom is obliged to act in your best interest rather than looking forward to reaping profit for itself.
How often does blooom rebalance?
Account rebalance takes place about 95 days after the last adjustment. In case the account hasn’t changed much to guarantee an optimization, the company will watch for the changes until a new adjustment becomes necessary. This way, rebalancing may happen one to four times a year.
How to cancel blooom?
In case you don’t really resonate with blooom, you can cancel your account in several easy steps. Sign in to your account, then select Account Settings. Under it, choose the three-dot menu on the account you want to cancel. Select and click Cancel Management.
Is blooom safe?
Yes, it is. All your credentials and personal information are safe with blooom. The company implements bank-level security and 256-bit encryption to safeguard your personal data.
Is blooom worth it?
Blooom can be an extraordinary investment tool, particularly if you need help with managing your 401(k) account. For a very low fee, you can have your portfolio analyzed and managed to suit your investment goals. If you’re not interested in placing trades or opening multiple accounts, our blooom review is here to confirm that this fintech is definitely worth your money.