Blooom Review

Blooom Review

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Our writers nor our editors receive direct compensation of any kind to publish information on TheTokenist.io. Our company, Tokenist Media, is community supported and may receive a small commission when you purchase products or services through links on our website. See more information here about how we make money.

Forget about blooming where you are planted. That old adage ceased to apply when Blooom (yes, the company name is really spelled with three o’s) burst upon the robo advisor scene several years back.

Blooom’s founders planted this niche-market robo advisor with strategic precision in a marketplace that has been historically underserved: employer-sponsored investment plans. (Although we have to admit it feels a touch grandiose to use the word “historically” in the digital investment platform industry, which is as of yet in its own infancy.)

Blooom’s management also recently made the decision to begin managing IRAs (individual retirement accounts) and Roth IRAs, a move that was warmly welcomed. However, Blooom’s FAQ states that currently only IRA/Roth IRA accounts held at these three financial institutions are eligible: Charles Schwab, Fidelity and Vanguard.

Investor Warning: The information is provided for discussion purposes only and should not be considered as investment advice. Blooom is limited to the funds available in your employer sponsored retirement plan. There is no guarantee blooom can or will reduce your fund expenses. Blooom relies on the ability to receive updated account and transaction information. We do not guarantee we will be able to provide account monitoring to all accounts.

Blooom is Doing its “One Thing” and Doing it Well

From this unique vantage point, Blooom is a robo advisor that seems tailor-made for long-term growth, stability and success, seeing how it is currently the sole robo advisor that does one thing (and only one thing) and does it well: managing your investment retirement accounts.

Originally founded in 2013 to serve as a business-to-business (B2B) 401k robo advisor, Blooom made news headlines in 2017 when it took the corporation in a new direction to focus on the end-user – you, the investment retirement account holder.

Blooom Homepage ScreenshotThis move reshuffled the internal workings of the corporation and sent its longtime founder/CEO, Chris Costello, off to the board of directors instead.

The reshuffling also doubled Blooom’s holdings by a cool $1 billion in just six short months.

But while Blooom may be the only dedicated robo advisor digital retirement investment platform out there, it is far from the only way to manage these types of holdings.

Is Blooom the right fit for your retirement account management needs? Let’s find out!

Is Blooom Really the Only One of Its Kind Out There?

This is what the company itself claims. But is it really true?

The answer, refreshingly, is a resounding “yes.”

Blooom sets itself apart not only in its single focus on managing investment retirement plans, but it literally focuses only on the following types of retirement investment savings plans:

  • 401k (for-profit employer-sponsored savings plan)
  • 403b (government and tax-exempt worker savings plan)
  • 401a (government and tax-exempt worker savings plan)
  • 457 (local and state government and nonprofit savings plan)
  • TSP (thrift savings plan for federal government employees)
  • IRA (individual retirement account)
  • Roth IRA

Interested in a Bloom account? Get started here.

What Blooom Offers You, The Employee

Blooom’s most enticing offering is the option it offers to you, the employee, to receive expert investment guidance for managing that all-important source of future financial security: your employer-sponsored savings plan or individual retirement account (IRA/Roth IRA) plan.

Blooom Homepage ScreenshotIf you happen to have a degree in finance and work in the finance industry, perhaps this will not sound especially appealing.

But for all the rest of the employed workforce who likely has neither the time nor the inclination to dig deep into matters of asset allocation and portfolio management (or the personal means to pay someone else hefty fees to do the same) Blooom appears as a delicate flower of hope growing among the sharpest of thorns.

Blooom stands in the gap to help the average every-person actively manage their retirement savings without requiring any actual active participation (of course, the option for active participation also exists, but we will get to that in a minute).

Low Flat Monthly Fees to Boost Your Return on Investment

The first thing you need to know about Blooom is that even if you only have $1 in your employer-sponsored savings plan, you are eligible to use Blooom’s robo advisor services platform to invest it for you.

Blooom FeesWhile Blooom’s fees are not free, the platform has built a portion of its reputation to date on sleuthing out ways to save you money on the types of hefty management fees charged by traditional investment brokerages and funds management teams.

The process starts with Blooom’s proprietary free initial analysis of your current 401k, IRA or other eligible retirement account. They call this the “health analysis.” The goal is to figure out if your account is optimized so you are earning the most on your investment holdings.

Either way, for just $10 per month (billed at $30 per quarter or $120 per year) you can receive the benefits of Blooom’s digital algorithm, which continuously monitors your holdings for more advantageous investment opportunities and makes adjustments every 7 to 10 days on your behalf.

This is a steal no matter how you slice it, but especially so for larger investment accounts with significant assets.
If you decide to cancel your connection with Blooom, you will be refunded the amount of any unused funds you have pre-paid.

No Need to Enroll or Move Your Funds

It is hard to pick just one “neatest thing” about how Blooom works with retirement accounts. But if we had to pick just one thing, perhaps it would be this one: you don’t have to enroll or move your funds to use Blooom’s robo advisor platform to optimize your returns.

Blooom Link Existing Retirement AccountAll you have to do is verify that the institution holding your funds is set up to work with Blooom (not all institutions will be, but Blooom does state that it works with hundreds of institutions). If you need help, you can reach out to Blooom’s team directly for guidance.

No App, But Live Chat

On the downside, there is currently no app interface for customers to use Blooom – there is only the desktop-based website.

While this is in keeping with the overarching principle of Blooom as a hands-off robo advisor that essentially manages your retirement account on your behalf with very little input from you, it may be frustrating for some. Blooom’s FAQ does state that an app is in the works but it offers no idea of a timeline for the app release.

On the plus side, there is a live chat feature that operates in real-time during regular business hours and connects you to actual human advisors.

Blooom Algorithm Follows Solid Traditional Investing Protocols

Blooom’s choice to focus on management of ESRA (employer-sponsored retirement accounts) and individual retirement accounts means it is subject to the limitations of ESRA plan restrictions.

For general purposes, the Blooom algorithm is set up to calculate portfolio optimization based on age, estimated retirement date and results of a Risk Tolerance quiz, all in accordance with any existing applicable ESRA plan limitations. To change your portfolio allocations, Blooom FAQ states that you must first re-take the quiz and edit your risk tolerance.

Otherwise, Blooom’s algorithm-based portfolio re-allocation recommendations rely on traditional retirement investment strategies, namely:

  • Stocks to bonds ratio based on time remaining to anticipated retirement date.
  • Well-rounded portfolio with representation of all ESRA-permitted asset classes.
  • Focus on choosing the lowest internal fee funds available.

The Real Savings May Be Fee Savings

While there is an undeniable focus on optimizing each retirement investment portfolio based on traditional investing strategies, the real gold (and much of Blooom’s headline-making news to date) may actually come in the form of the fee savings.

Traditional brokerage firms and management teams often assess hefty fees for personalized financial guidance. Blooom essentially offers the same for a $10 flat fee per month. In addition, Blooom’s robo advisor algorithm is continually calculating and recalculating to find the maximum portfolio returns for the lowest internal investing fees.

Will Blooom put traditional financial advisors out of business? It hasn’t, at least as of yet. But for investors on the high extreme end of the retirement investing bell curve in particular, it continues to present a notably attractive alternative to these.

Here is an example. Let’s say that, based on the data you input initially about your current age and anticipated date of retirement, Blooom calculates that a certain percentage of your holdings should come from managed funds.

Blooom will then take a look at all of the funds that meet this criteria and select the one with the lowest overall internal management and administrative expense fees. In this way, the algorithm makes sure your funds are being used to fuel investment growth rather than to pay a fund manager’s salary and commissions.

Get the Free Review and Do With It What You Will

One of the big perks Bloom offers is that you get the free portfolio review up front.

This means it really is free.

Blooom Homepage ScreenshotYou can take it and do with it what you will, whether that means returning to your employer’s portal to make adjustments, continuing to manage your funds on your own or deciding to use Blooom’s algorithm to automate that process for you.

At the very least, it is worth letting Blooom’s algorithm take the pulse of your retirement portfolio holdings to date so you have more data to work from to maximize your potential for future returns and a nice retirement nest egg.

Blooom is a Bonafide Fiduciary

The word “fiduciary” essentially means “good faith.” Any individual or entity that is designated as a fiduciary is bound by law to act in the best interests of those being served.

This can be a real eye-opener for inexperienced investors in particular, because not all financial advisors and institutions are designated as fiduciaries.

What this means is that the highly paid financial advisor or team you are trusting to manage your holdings for you may not actually be advising you towards your own best good!

But if an individual or entity is a legally designated fiduciary, then the Securities and Exchange Commission (SEC) mandates that all actions taken must be towards the highest good of those being served.

Blooom’s algorithm and the entity itself is set up to serve as a fiduciary to you. This means Blooom must act in accordance with each of these tenets:

  • Avoids all potential conflicts of interest.
  • Acts on your behalf in complete good faith, trust and honesty.
  • Provides full disclosure of all important investment facts.
  • Does not mislead customers.
  • Does not use managed assets for personal gain or for the gain of other customers.

Any departure from these tenets constitutes SEC fraud and is actionable under federal law.

Learn as You Go With Blooom

Because Blooom is a legally designated fiduciary and because Blooom’s algorithm is continually making automated account adjustments to maximize your holdings, you are able to learn about investing by observation, if you care to do so.

However, if you do not care to do so, you can trust Blooom to handle your investment management for you as your fiduciary.

For younger, time-crunched investors in particular, the chance to receive what amounts to personalized financial advising for a low monthly flat fee under a fiduciary agreement is about as close as you can get to winning the financial advisor lottery.

No Continental Drift with Blooom

In the world of investing, there is such a thing as “drift.” Drift occurs when changes occur within funds or in the market as a whole. Drift can (and does) easily throw your portfolio allocation off-balance.

Every 95 days, Blooom’s algorithm will optimize your portfolio for drift, rebalancing your portfolio automatically and then sending you an alert to this effect. If you have questions, you can always talk with a real human financial advisor at Blooom to learn more about how this process works.

Is Blooom the Right Fit for Your Retirement Account Management?

Blooom may not offer absolutely every bell and whistle that is available out there in the greater wide world of retirement investment account management.

And there is no doubt Blooom is not going to be the right fit for everyone.

Yet it is in a class all its own in the new emerging field of robo advisor investment platforms.

Blooom’s sheer lack of competition means that if you like what it has to offer and want what it has to offer, you aren’t going to suffer any indecision about who to go with – Blooom is quite literally it!

Blooom is going to be the best fit if you:

  • You don’t have time or interest in hands-on retirement account management yourself.
  • You want to avoid over-paying in advising fees.
  • You can handle using only email and live chat for communications (there is no app and no phone number to call).
  • You have a higher tolerance for risk, since Blooom is known to recommend investing in straight stocks.
  • You have a weightier portfolio which can make the flat monthly fee more attractive.
  • You simply want the free account analysis to use as a learning tool for continued self-management of your portfolio.

Ultimately, we believe Blooom has a ton to offer and is certainly worth a shot – and remember, you can cancel anytime with a pro-rated refund of any prepaid monthly fees.

About Author

Tim Fries Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim is also the co-founder of Protective Technologies Capital (protechcap.com).