- Editor Rating
- Rated 3.5 stars
- Very Good
- Blooom Review
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Blooom’s robo-advisor service manages your 401(k) plan on your behalf. It is relatively easy to use, working with any retirement accounts you hold that provide online access. Overall, they are low-cost, charging just $10 per month in management fees. However, Blooom will not take into account your individual tolerance for risk.
They are a fully registered and reputable Investment Advisor business that specializes in both 403(b) and 401(k) plans. Blooom analyzed more than 25,000 401(k) plans, stating that after careful and intricate analysis, over 80% of these plans were not being managed correctly. They won’t get involved where IRAs or taxable investments accounts are concerned.
The 401(k) market is not overly crowded, and one of the significant benefits of what they offer is their ability to manage almost any 401(k) plan, regardless of with who or where it is held. Above all else, because Blooom is a fiduciary, they are obliged by law to always act in your best interests.
The challenge that their services resolve for clients is that the majority of employer-sponsored plans will be quite random in the range of investment options which can be a little bit challenging to understand. Investors are left confused and uninformed of what is happening with their funds. Moreover, the likes of Betterment and Wealthfront will not manage plans that are provided by employers – enter Blooom.
With the majority of retirement assets being held in 401(k) plans, Blooom’s specialist approach to this sector of investment management has given them more than $500 million in assets in just four years. Their attractive flat-rate fee of just $10 per month means they are also extremely affordable.
Earn A $10 Amazon Gift Card Per Referral
Once you’re a member of Blooom, you can start making referrals to earn a $10 Amazon gift card per referral. Your referrals don’t even need to become clients, they just need to use Blooom’s service to analyze the health of their 401k. If your referrals signup, they’ll get the first 30 days of Blooom service at no charge.
You’ll be able to refer via Email, Facebook, Twitter, LinkedIn, or with your own personal referral link.
How Does Blooom Work?
Using a combination of human advisors and automation, they deliver on their promise of maximizing a client’s plan. Every 90 days they will check for opportunities to re-balance. Customers of Blooom can access financial advisors at the company through a live chat function or contact them via email – you cannot contact them by phone.
Once you have signed up to the service, you retain absolute control of your account, but you give Blooom Legal power of attorney to act on your behalf. They will not be able to remove any funds from your retirement account, but they will be able to invest it on your behalf. You do not need to transfer your account or open up new ones. As long as your account has online access, they can manage it on your behalf.
They will look at your expected retirement age and your current age. In the earlier stages of your retirement plan, they will weigh more heavily in favor of stocks. Then, as this plan matures and you come closer to your retirement, they will orientate this more towards bonds.
How does Investment Selection Work?
As outlined above, Blooom tends to favor index funds with actively managed funds added where needed to give exposure. A target allocation is created which is made up of the funds within your 401(k) plan that meets your desired allocation requirements. The foremost proprietary algorithm is what determines this, and this is the robo-advisor element from Blooom working at its finest.
However, something you don’t often see with other robo-advisor services is the ability to make alterations to your mix of investments. This means that even after your application has been put in place, you still retain control to make alterations as required. Blooom makes this super-easy to do. There is a button marked with ‘adjust allocation’ which you need to select in order to make any changes. It’s that simple. Any re-balancing that occurs in the future will be done in line with those changes. Moreover, you can easily change your expected date of retirement too by selecting a button titled ‘adjust retirement’.
Who Is Blooom Suitable For?
- Ideal for investors who prefer a hands-off approach
- Perfect for those who have employee-sponsored retirement plans
- Those you prefer a greater than average tolerance to risk
- Those who want a specialist and comprehensive approach to employee retirement plans
Pros and Cons of Using Blooom
Blooom provides a superb, hands-off solution for those who need help to manage their employee-sponsored retirement plan. It makes it easy to sign-up and test the waters with a free, no obligation analysis tool. They also provide clear and upfront pricing that is competitive with no surprises in terms of hidden fees or charges.
Overall, their approach to managing retirement plans is spot-on. The algorithm they use places a particular emphasis of low-cost investments and diversification; both of these principles have been firmly supported by countless years of research.
With no minimum amount required to open an account, along with the added assurance that not only can you make your own adjustments, but you can cancel the service at any time without any penalties, I feel that Blooom has an excellent offering in a not so-crowded marketplace.
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