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Blooom Review

A robo advisor specifically for employer-sponsored retirement plans, blooom offers a way to dig in if you're looking for simplified, hands-off retirement analysis and management.

securely through Blooom's website

1 Minute Review

Robo advisors peel more customers away from active managers every day. Blooom, laser-focused on employer-sponsored retirement plans, has found a really creative way to carve a niche among robo advisors. Learn More

Best For

  • Retirement planning
  • Hands-off investors
  • Long-term investors

Pros

  • Portfolios over $100,000 get the cheapest robo advisor rates
  • Combines computer-driven approach with human touch
  • Automatic rebalancing

Cons

  • Limited to only employer-sponsored plans - no IRAs
  • Expensive for small accounts
  • No research tools

Following the launch of Betterment and Wealthfront, blooom was established in 2013 and only takes on clients with existing 401(k), 403(b), TSP, 457, or 401(a) accounts. 

You can get a free personalized analysis of your retirement account in just a few minutes; all you have to do is link your employer-sponsored account. A checkup is well worth the amount of time you’ll spend, as it’ll let you know quickly whether you’re spending too much on unnecessary hidden fees. You’ll share:

  • Your name
  • Birthdate
  • Target retirement date
  • Where your 401(k) is currently held
  • Your credentials, using bank level, 256-bit security data-encryption

Blooom will analyze your 401(k) against 25,000 different funds and the health of your 401(k) will be represented by (what else?) a flower. In addition to hidden fees, you’ll be able to see if you have the right balance of stocks and bonds in your account, whether you’re too aggressive or conservative, etc.

Most importantly, blooom will share how you can fix the problems it has uncovered in your retirement fund.

  1. Your portfolio will be evaluated based on your answers and your desired retirement age.
  2. Then you’ll get a recommendation of how to properly allocate your assets and blooom will explain how using the service will save you money in the long run.

Who Uses Blooom?

Blooom is not for traders or investors looking to make a quick buck; rather, it’s for investors with a multi-decade time horizon. The goal of the company is to provide long-term results for a low cost. Your portfolio will be rebalanced as needed, but you can always take manual control and change your preferences. 

Note that your targeted retirement date is taken into heaviest consideration by the algorithm. If you have 40 years of work left, the platform will put you in 100% stocks.

Blooom Pros

Blooom promotes itself as “affordable online 401k management for the 99%” and the moniker is accurate, at least in most respects. You don’t need to know anything about trading or asset management to use the platform successfully.

Low Costs for Big Portfolios

If you decide to take the plunge and have blooom work with your accounts, it’s a $10 charge per month for the service. That’s $120 per year, meaning an account with a balance of $100,000 would only be charged 0.12% in expenses.

Wealthfront charges 0.25%, so Blooom is incredibly cost-efficient for investors with big account balances.

Computer-Driven Models with a Human Touch

Some investors require a conversation with a human being instead of an everything-on-a-computer approach. Blooom cultivates that human touch nicely with registered financial advisors available to discuss strategy with clients.

Automatic Rebalancing

Sometimes your asset allocation can get out of whack after a big market drawdown (or upswing). When this happens, your 60/40 stocks-to-bonds portfolio might shift to 65/35 or 55/45. When this happens, it’s smart to rebalance.

Blooom does this for you automatically, checking your portfolio’s allocation once per quarter and adjusting to reach the proper balance. Rebalancing a portfolio on your own can be a tedious process, so blooom does all the work for you

Blooom Cons

Blooom’s platform isn’t without drawbacks. It’s less sophisticated than other robo advisors and might not always be the cheapest option, and unfortunately, there’s no app. Here are the major cons:

Expensive for Small Portfolios

Blooom charges a monthly rate instead of a percentage of assets. If you have over $100,000 in assets, it’s certainly one of the most affordable robo advisors available today.

But if you’re a young saver and only have $10,000 in assets, that $120 per year fee turns into a 0.48% expense ratio, which is incredibly high for a platform that’s only going to stick your money in index funds. Ultimately, you’ll want to amass at least $50,000 in your 401(k) before using blooom.

No IRAs or Taxable Accounts

The platform is only for employer-sponsored retirement vehicles, which eliminates a lot of potential customers.

Final Thoughts on Blooom

The company has already amassed $2 billion in assets, so there’s no doubt it’s a great service for investors who want a “set it and forget it” approach to their retirement planning. Use a taxable account if you want to pick stocks and the leave the retirement assets in index funds.

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