Blooom is a comprehensive investment platform. It is an affordable Robo-advisors designed to make it easy for your retirement accounts, including your 401 (K). Blooom helps you manage your employer-sponsored retirement plan eliminating the need to transfer your funds to another platform. It makes the best Robo-advisor in Singapore if you are looking for a specialist for your retirement funds. Check out our guide on robo investing in Singapore.
The platform helps you manage your portfolio at low fees. This article will give you a comprehensive Blooom review. It will help you decide your best choice for your retirement assets.
What is Blooom?
Blooom was launched in Leawood, Kansas, in 2013. It was set up to manage employer-sponsored retirement funds. The platform makes it easy to use since it works alongside your current employer’s retirement plan without needing you to change to another platform.
It is important to note that Blooom only manages your retirement account but does not control it. Additionally, it does not need your employers to approve its services. Blooom also extends its services to Fidelity IRA accounts and manages Fidelity retirement plans. The Robo-advisor also offers DIY investment advice for Schwab and Vanguard IRA accounts.
Blooom offers the ideal platform to use if you are among the millions of people who have an employer-sponsored plan and are not confident enough to manage your investment account. The platform creates your portfolio, manages the asset allocation, and reinvests the dividends.
The best thing about using the platform is it works hard to maintain the fees to be as low as possible. Low fees from Blooom translate to higher investment returns than other retirement investment options.
- Minimum Investment: $0
- Fees: From $45 to $250 per year, depending on the plan you choose
- Accounts: Simple IRA, Joint, 401 k, Traditional IRA, Roth IRA, SEP IRA
- Tax Loss Harvesting: No
- 401 K Assistance: No
- Portfolio Rebalancing: Yes
- Advice: Automated
- Social Responsibility: No
- Smart Beta: No
- Fractional Shares: Yes
- Customer Service: Live Chat
Blooom is a fiduciary and legal action in the best interest of its users. It features 25-bit encryption bank-level security to protect user personal information. It does not offer SIPC insurance since it does not take custody of your plan. Your plan, however, provides that coverage.
Other Blooom unique features include:
- Auto Optimization: It keeps your portfolio on track with the market by offering periodic rebalancing, which occurs every 95 days but only when necessary.
- Personalized portfolio: The feature is available in all three plans. The platform picks optimal funds and helps minimize hidden investment fees.
- Advisor access: Reverts to financial questions between two to three days.
- Withdrawal alerts: Sends you a text message once a withdrawal from your account is detected.
- Priority Advisor Access: Offer live chats from financial advisors. They are available during regular business hours from Monday to Friday.
Blooom Is Perfect For
Blooom is perfect for anyone who does not have the experience, extra time, or inclination to manage their retirement plans. It is ideal for many retirement plans and works for employer-sponsored plans and IRAs.
Blooom handles all aspects of investing, including the construction of your retirement portfolio, rebalancing your assets periodically, and minimizing the fees.
How Does Blooom Work?
Blooom is a unique Robo-advisor designed to provide two primary investment services: IRAs and employer-sponsored retirement plans. Here is an overview of how the two services work:
1. Blooom and Employer-Sponsored Retirement Plans
Bloom has focused on employer-sponsored retirement plans over the past seven years. The platform is the only Robo-advisor available where investors can choose to manage their employer plan.
- The platform manages a full range of employer-sponsor retirement plans: They include TSP, 401(K), 403 (K), and 457plans. All these retirement plans are managed from where they are. This means that you do not need your employer’s or your cooperation’s approval to use the services.
- With Blooom, you maintain full custody of your funds: They do not take control of your plan. The platform is an investment management service. Blooom builds your investment portfolio based on your existing employer plan.
- It will analyze your investment options and move your funds into the most appropriate investment portfolio to help minimize the investment fees. Once you sign up for the service, the Robo-advisor will analyze your current investment portfolio with no charges. They will give you a summary of the fees you have been paying, whether or not you are aware of the fees or not.
- Blooom invests your funds with index-based ETFs and low-cost mutual funds: The platform does not invest in individual stocks; if you are already holding stocks in your current portfolio, they will be sold and moved to the appropriate ETFs that match your investment goals.
The only exception is your employer’s stock company. You will retain your position with the stocks, but it must not exceed 10% of your total portfolio value.
2. Blooom and IRAs
Blooom for IRAs is a recent service by the platform launched over the past years. Adding IRAs to the mix is a natural progression since the Robo-advisor has vast experience managing employer-sponsored plans.The IRA service is similar to the employer-sponsored plans.
- They evaluate your current IRA fund and move your funds to low-cost ETFs that match your investment goals, time horizon, and risk tolerance. The investment funds are selected to have the lowest expense.
- Unlike employer-sponsored retirement plans, Blooom requires you to move your IRAs to either of these three brokerage firms: Fidelity, Charles Schwab, or Vanguard. This is not as limiting a factor as it may seem. These three brokerage firms are the largest retirement trustees, and millions of investors already have accounts with them.
- Once you sign up for a Blooom IRA account, you must know it is not a democracy: This means whatever portion you choose to be managed by Blooom will be fully managed. Therefore, you will not be able to choose any of your investment options. You, however, can alter your portfolio allocation by changing your investors’ profiles.
An advantage of the Blooom IRA service is that you can allocate a portion of your IRA fund to Blooom and engage the rest in self-directed trading. We, however, recommend you maintain a separate IRA account for self-trading since it can often be confusing to navigate between the two accounts.
3. Blooom Charges and Fees
Blooom offers three different services, which include:
- The Essentials Plan: It costs $45 per year and offers you access to a personalized portfolio while minimizing the overall investment fees.
- The Standard Plan: It costs $120 per year and offers access to a personalized portfolio. It also allows auto-optimization of your accounts, access to an advisor, and withdrawal alerts.
- The Unlimited Plan costs $250 per year and offers unlimited account access. The plan includes all the benefits of all the other plans and also includes priority access to an advisor.
All the plans require you to have a credit card on file to pay for the annual fees. This ensures Blooom does not withdraw funds from your retirement account, including a taxable plan distribution.
Blooom’s fee structure is based on flat annual fees and does not have any hidden fees. However, there are fees associated with individual investments in every plan, including ETF fees and other fees that your plan administrator or custodian might charge. It is important to note that these fees are paid to third parties, not Blooom.
What are the Advantages of Blooom?
- Low management fees on large plans: If you have a high-value plan and go for the highest plan on the platform, it will most likely be cheaper than your typical Robo-advisor.
- No need for employer’s consent: Blooom can be easily added to any employer-sponsored retirement plan without the employer’s consent.
- No minimum initial investment: Most investment management services require a minimum initial investment, but Blooom does not need you to have a large sum in your account balance. You can open your Blooom account with as little as $1.
- There is no need to move your employer-sponsored retirement plan: The best part about Blooom is that they manage your funds exactly where it is. It uses the investment options available within the plan.
- Suspicious activity alerts: Blooom will send you a text message if there is any activity in your account. Therefore, it is easy to avoid any fraudulent activity connected to your retirement plan.
- Offers hybrid investment management: You can have Blooom manage part of your IRA and have the rest of the portion under self-directed investing.
What are the Disadvantages of Blooom?
- Monthly fees can be too high for small accounts: If you have a low account balance, it can be uneconomical to subscribe to the $120 plan per year that gives you access to all the platform services.
- IRA funds are limited to specific custodians: Blooom only manages IRA funds held by Fidelity, Charles Schwab, or Vanguard.
- Customer service does not offer phone support: Customer support is only limited to live chat or email.
- Not available for taxable investment accounts: Blooom only deals with retirement accounts; if you need a managed taxable account, you will need to look for another service.
How to Sign Up for Blooom
Here are the simple steps you will need to follow when signing up for Blooom:
Step 1: Go to Blooom’s official website and click the ‘Sign Up’ Button on top of the main page.
Step 2: Here, you will need to provide your email address and create your password, or you can easily sign up with your Google account.
Step 3: You will then need to provide personal information and answer various questions to get your free portfolio assessment. Some of the personal information you will need to provide include:
- Your name
- Your date of birth
- Expected retirement age
- Email address
- Type of retirement you have (the options include a traditional or Roth IRA account, employers sponsored plan, and others including a brokerage account and a college savings account)
- Your knowledge of bonds and stocks (your choices include: limited, pretty good, or limited).
- Questions to measure your risk tolerance
- Your ideal vacation
- What you would do to your retirement account contributions fell below 20%
- How would you respond to a 200-point drop in the stock market
Blooom indicates your investment strategy based on how you answer the questions. The platform classifies investors as conservative, moderate, or aggressive. After you have been allocated your classification, you will be asked to link your investment account to see if your invested funds match your investment goals.
You will then receive a free assessment to see your current investments’ risk. You can evaluate your portfolio in terms of fees, risk level, and diversification. Additionally, you can use the information provided to make changes to your portfolios without paying for their financial services.
How Does Blooom Compare to Its Competitors?
Blooom does not have direct competition based on the investment services it offers. Blooom provides investment management services for employer-sponsored retirement accounts and IRA accounts. Betterment and Wealthfront are alternative services that also provide taxable brokerage accounts.
Here is a look at how Blooom compares to Wealthfront and Betterment:
|$45 to 120 per||Betterment Digital: 0.25% Betterment Premium: 0.40%||
|Unique Features||Designed for employer-sponsored retirement plans||Uses sub-accounts employing different portfolios to reach multiple goals||
High-yield Cash Account & live financial planning
|Best For||Retirement accounts, including employer-sponsored plans and IRAs||Taxable brokerage accounts and all types of IRAs||
Taxable brokerage accounts and all types of IRAs
1. What Is Blooom’s Cancellation Policy?
If you want to cancel your service, the annual fee can be handled in either of the following ways:
- You can continue with the subscription till the end of the year or
- You might be eligible for a refund based on the amount of time left on your current subscription
2. Is Blooom Safe?
Blooom is a fiduciary as well as an SEC-registered company. This means they are legally required to always act in their best interest. It features 256-bit encryption security to ensure users’ data is always secure. The platform also uses a secure socket layer (SSL) and stores all users’ information on an electronic database.
Blooom does not hold your assets; hence it is not required to offer SPIC insurance. The insurance will, however, be found with the trustee of your retirement plan.
3. Is Blooom Worth Your Time?
Blooom is the only Robo-advisor available that specializes in employer-sponsored retirement plans. Additionally, the platform allows you to keep your account where it is and does not require permission from your employer to use it.
However, deciding whether Blooom is with your time or not only depends on the size of your portfolio. Blooom prices are fixed and can be quite steep for small portfolios. On the other hand, large portfolios will put you in a better position to save on your portfolio costs.
When you pay $120 per year, you will have access to a human financial advisor, which will be worth your money when making better financial decisions. You will need to calculate the fees you are paying to determine whether Blooom makes financial sense for your investment objectives and risk tolerance.
If you find that Blooom can help you save on fees and provides you with peace of mind, it may be your ideal Robo-advisor for your retirement fund. Signing up for Blooom is free, and their software gives you an overview of how your 401 (K) investments are doing regarding assets allocations and potential fees.
4. What Are the Benefits of Investing with Blooom?
- Offer unlimited access to financial advisors
- Cuts hidden fees by 66%
- Offer unlimited access to human financial advisors
5. What Does Blooom Do?
Blooom is an online financial advisor for different retirement accounts. The platform helps you with the following when it comes to your IRA and 401k account:
They research, analyze and create personalized portfolios for age-appropriate and diverse users while offering the lowest management fees.
- The platform also optimizes your account and adjusts it to more conservative investments as you get closer to your retirement.
- The platform monitors and alerts you of any suspicious activity in your account.
- They offer advice on any finance-related issues or questions you might have
6. Can You Adjust Your 401k Asset Allocation Without Blooom’s Permission?
Yes. You maintain total control of your investment account. However, it is important to remember that any changes you make to your account can interfere with the platform’s services. This means you might experience some issues or delays with your services the next time they try to optimize your account.
7. Does Bloom Have Long-Term Contracts?
No. The platform offers the services as you go. This means you have to pay for the services every year. If you wish to cancel the services, you can turn off auto-renewal on your account so that you may not be billed for the next billing cycle.
8. Will I Get A Refund If I Cancel My Blooom Subscription?
You will only be eligible for a refund based on when you left the subscription. If you are found eligible, you will receive the refund before you complete the cancellation process.
You can also decide to finish out your current subscription but discontinue the auto-renewal.
9. How Do I Link My Retirement Account to Blooom?
To link your account, you will need your institution’s name and password for the account that you would like Blooom to analyze. If you are unsure which financial institution your company plan is at; you can ask your HR or co-workers to help you.
10. What Is the Minimum Account Balance?
No. Blooom’s mission is to provide access to independent financial services. The platform works with beginners and longtime investors as well.
11. What Account Are Available with Blooom?
The platform manages 401k accounts. This is what makes the Robo advisor stand out from its peers. Here are the types of accounts available at Blooom:
- Thrift Savings Plan (TSP)
- Traditional IRA
- Roth IRA
- SEP IRA
- Simple IRA
- Spousal IRA
Please note that Blooom does not offer taxable accounts but only focuses on retirement accounts.
Blooom is your best solution if you want investment management services to manage your retirement savings. It is the only Robo-advisor that offers management of employer-sponsored plans. The platform creates and manages your portfolio while helping you minimize investment fees.
- Blooom manages employer-sponsored retirement plans and IRAs.
- The platform offers a flat annual fee for the three plans available, deducted from the user’s credit card.
- Blooom does not require a minimum initial amount.
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