Understanding Why Blooom Started
If you are looking for investment help, there are many companies available. But if you want a company that specializes in specific investment plans, like 401k help, the options start to narrow down.
Here is where Blooom (yes, it has three o’s) enters, an automated portfolio management service or, robo-advisor. Founded by three men, their goal is to provide professional yet straightforward help to every American with their 401k accounts. To them, typical investment companies thrive when their clients have a minimum amount of investable assets (usually in the millions). But what ends up happening is those who have smaller to no investment portfolios at all are left without professional investment services.
America has roughly 90 million people that invest in a 401k or a similar retirement account. What the Blooom founders have figure out is out of that 90 million, about 80 million of them have no financial help available or that they can afford. This is what made the founders create Blooom, a way for everyone to get the help they need for their 401k accounts at an affordable rate. With the rise in popularity of robo-advisors like this one, here is a Blooom review to see if it is the right fit for you.
How Blooom Works
When you sign up with Blooom, you are signing up with investors that help you manage your portfolio. What is nice though is you still have control over your accounts, as little or as much as you want. You won’t have to open up a new account or worry about transferring anything over. As long your 401k is accessible online, Blooom will work.
When Blooom gets to work on adjusting your 401k plan, they use a four-step process and their algorithm to do the work to maintain your portfolio. They get your account set up that based on your current age against your planned retirement age.
Blooom will remove any funds that don’t work within your portfolio. They tend to use index funds based on their algorithm to help achieve your target allocation. All results are double-checked and cross-referenced with your recommended 401k distribution.
Blooom Review – Quick Overview
Pros – Blooom has narrowed down their niche to manage employer-sponsored retirement plans. They will handle any 401k account, no matter who you work for and who holds your account. There is no account minimum needed, and you can get a free analysis. You have access to financial advisors and the costs to use Blooom’s help is quite low.
Cons – Blooom is limited to just 401k and similar accounts and doesn’t offer diversification. The sign-up assessment is simple but is limited.
Overall – If you are new to investing in a retirement plan, need some help and cannot afford high fees, Blooom is definitely a good starting point.
More In-Depth Bloom Review
Finding an advisor that deals with 401k aren’t easy; not many advisors deal with individual retirement accounts. This is where Blooom excels. Providing help exclusively to 401k retirement plans hits a market that is lacking investment advice. Other companies offer guidance in 401k. But Blooom offers direct management of your 401k no matter where the account is held. Your employer does not need to be in partnership with Blooom for you to utilize their services.
The downfall to their specified niche? If you have other accounts, like an IRA, Blooom cannot do anything with it. They can’t allocate between different accounts. The lack of diversification can cause troubles when you want to do one thing with your 401k, but Blooom doesn’t realize you have other accounts contributing as well.
Because Blooom lets you still maintain control of your portfolio, you can make the adjustments needed yourself. Through the setup process, Blooom will give recommendations for your allocations. However, you can still make changes on your own.
Having no account minimum means anyone can get the professional help Blooom has to offer. Beginner investors can sign up and start developing their portfolio and Blooom will make sure they get on the right track.
If you decide to try out Blooom, they offer a free analysis. This means you can register and link your 401k account without being charged. You’ll see a flower once you connect your account. This tells you how your 401k is going and offers ways to improve its health.
If you decide their recommendations are suitable for what you are looking for, you then sign up for a monthly fee of only $10. As long as you keep paying your monthly fee, Blooom will continue monitoring your portfolio and rebalance your 401k at least every 90 days.
A downfall of Blooom is the limited assessment of yourself at the beginning. They are planning out your portfolio based on two questions, your current age and planned retirement age, that’s it. They don’t take into account how risk-tolerant the investor is. But what Blooom does instead is it allows you to make adjustments to your allocation manually.
One last point to consider if the support Blooom provides. The company is made up of tech-savvy and licensed and certified financial advisors. If you have any questions or anything that may affect your finances (a big purchase), you can talk to Blooom’s support to help you make your decisions. The offer live chat and email support to their clients.
Final Thoughts on Blooom
Is Blooom worth checking out? If you are a beginner investor, do not have an extensive portfolio and have no idea what you are doing with a 401k plan, then yes, Blooom is worth checking out. It’s free to get an analysis, and the monthly fee is quite affordable. They also allow you to cancel at any time. But if you have other accounts besides a 401k, Blooom cannot consider those with your allocation. A different investor or robo-advisor may be better suited.