OpenInvest is a robo-advisor which offers a fully diversified and customized portfolio within a transparent and affordable pricing structure. OpenInvest offers more than 10 investing theme, which allows for a customized portfolio.
- Hybrid investors
- Socially responsible investors
- Relatively low fees
- No hidden fees involved
- Voting allowed in shareholder resolutions of companies a client is invested in
- Allows tax-loss harvesting
- Custom portfolio option
- Automatic portfolio rebalancing
- Doesn’t manage 401(k)s
- Minimum deposit requirement is high relative to most other robo advisors
- Socially responsible assets may not always generate the highest returns
OpenInvest, a public-benefit corporation, focuses on socially responsibleinvesting. The company aligns investment goals with personal interests in causes such as climate change and equal rights to ensure that clients’ finances truly reflect personal values and drive positive social change.
Who’s OpenInvest for?
OpenInvest's unique approach to socially-responsible investing is not suited for all traders. OpenInvest caters to a specific audience:
- Hybrid investors: A true robo advisor, OpenInvest provides online financial advice based on mathematical rules and algorithms. It also allows portfolio customization.
- Socially responsible investors: Investments can reduce carbon emissions, demand transparent politics, protect global forests, keep fossil fuels in the ground, fight gun violence, support women in workplaces, and more.
OpenInvest’s Platform and Tools
Since OpenInvest is only an investing platform, its role is restricted to custom portfolios based on your values.
The OpenInvest app, which keeps track of your performance as well as your real-time social and environmental impacts, is available for iPhone and Android.
The app also lets you swipe your vote in shareholder resolutions and other powerful actions. Voting in a shareholder meeting lets you have a say in crucial decisions made by the company, including in causes close to your heart.
OpenInvest’s Research Offerings
OpenInvest doesn’t offer well-rounded research or third-party research. Its blog features company-related news, causes it stands for, personal finance information and articles on shareholder activism.
OpenInvest’s Commission and Fees
OpenInvest mandates an account minimum of $100. It charges one flat annual fee of 0.5% of assets managed and there are no expense ratios. There are no hidden ETF fees, no account opening or closure fees and no trading fees involved. Note: If you invest in a green bond fund, you’ll have to cough up 0.22% in fees.
Since OpenInvest invests in individual stocks, you can avoid hidden charges such as ETF fees. Tax-loss harvesting, which reduces your taxable income by using losses on your investments to offset capital gains in other investments, is free if you have a taxable account.
OpenInvest is a Securities and Exchange Commissions (SEC)-licensed investment advisor. Tradier Brokerages, the broker-dealer which implements trades at OpenInvest, is a Financial Industry Regulatory Authority (FINRA) member.
Apex Clearing, the custodian that holds money and clears trades of OpenInvest clients, is Securities Investor Protection Corporation (SIPC) insured. Assets held are covered by SIPC federal insurance, which offers protection up to $500,000, including a $250,000 limit for cash.
OpenInvest uses 256-bit encryption, which is monitored 24/7. All sensitive personal information such as bank accounts and social security numbers are encrypted. In order to prevent fraudulent activities, multi-factor authentication is enabled for all online services; an account cannot be accessed with only a password.
The firm’s internal servers are locked down by IP and port in order to reduce visibility for external attackers.
OpenInvest’s Customer Support
OpenInvest’s support team can be accessed via email address at email@example.com. Their phone support is available at 1-855-466-6545.
OpenInvest’s webpage has a call-back option. To use this, fill out an online form, which asks for name, email address and the issue for which help is needed. Attachments, if any, can also be added to the form.
OpenInvest’s Tradable Asset Classes
OpenInvest offers individual stocks and green bond funds. A green bond fund would qualify as a socially responsible mutual fund, the proceeds of which are invested in environmentally-friendly projects.
You have to be a U.S. citizen or permanent resident and be at least 18 years of age. OpenInvest provides two types of accounts, investment accounts and socially responsible IRA accounts:
- Individual investment account
- Custodial investment account
- Joint investment account
- LLC investment account
Individual Retirement Accounts
- Traditional IRA
- Roth IRA
- Simplified Employee Pension (SEP) IRA
OpenInvest’s Ease of Use
Opening an account at OpenInvest is fairly easy.
You’re asked to select the theme you value and asked a series of personal questions. These include your age, investment objective (make an impact in the world/save for retirement/buy a home) as well as your initial investment amount. The firm generates a sample portfolio for you and recommends stocks for the chosen portfolio.
Based on the inputs provided, the firm recommends risk tolerance in terms of a numerical rating scale and asks for your risk tolerance preference.
The following is the portfolio component generated for a 46-year-old investor who plans a $3,000 initial investment and $50 per month contribution and a risk tolerance rating of 4.
Withdrawing funds can only be done manually. After an email is sent to the support team, the withdrawal request gives details such as how much is to be withdrawn and whether the withdrawn funds are to be transferred to a linked bank account.
If you’re into social responsibility, OpenInvest might be for you. Cheaper fees and lack of hidden fees could also make it a go-to option for cost-conscious investors.
However, a weak breadth of asset classes with less volatility are definite negatives.
Frequently Asked Questions
How does Openinvest make money?
Openinvest makes it money by charging its 0.5% management fees. However, there are no fees on ETFs.
Who owns Openinvest?
Openinvest was bought out by JP Morgan on June 29th, 2021. Openinvest still retains its own brand separately from JP Morgan.