In a nutshell: Blooom is a simple, affordable robo-advisor to manage your retirement account.
With low fees and access to financial advisors, Blooom simplifies the process of setting up your 401k.
$45 - $250/year
In a nutshell: Blooom is a simple, affordable robo-advisor to manage your retirement account. With low fees and access to financial advisors, Blooom simplifies the process of setting up your 401k.
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In this Blooom review, we'll take a look at this robo-advisor that helps you manage your retirement account.
Blooom is a simple, affordable robo-advisor to manage your retirement account. Read our Blooom review why it is such a great choice.
If you have a 401k or similar account and don't want to manage on your own, that's where Blooom can help.
Most robo-advisors can only manage a taxable brokerage account or IRA. But if you wanted help with you retirement portfolio, you would normally be out of luck.
Not so with Blooom. But does it get the job done? Let's find out.
What is Blooom?
$45, $120, or $250 Per Year
401(k), Joint Taxable, IRA, SEP IRA, Roth IRA, SIMPLE IRA
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 Os) enters, an automated portfolio management service or, robo-advisor.
Founded by three men in Leawood, Kansas, 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.
Today, Blooom also has support for Thrift Savings Plan (TSP) accounts.
Click for Blooom Pricing and Details.
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.
And Blooom is still alone in this field. Betterment offers 401k plans for employers, but not for individuals who want to manage their existing plan.
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 for a Blooom account, you are signing up with investors that help you manage your portfolio.
What is nice though is you still have control over your investment account accounts. You can have as little or as much control 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.
Rebalancing occurs on an as-needed basis every 95 days. If your portfolio hasn't drifted enough to rebalance it, no changes will be made.
They get your account set up that based on your current age against your planned retirement age. You can also adjust your asset allocation to match your risk tolerance and retirement date.
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.
While the main draw of Blooom is the fact that it can manage your 401k it does have several features worth mentioning:
- Ongoing optimization. Blooom will monitor your portfolio on an ongoing basis and make changes as needed. That includes watching the market for news stories, researching new funds, an automatically optimize your portfolio as needed (optional).
- Personalized portfolio. Rather than simply investing your money in a group of ETFs, blooom optimizes your portfolio to help meet your goals. That includes researching a portfolio that works for you, identifying your proper risk allocation, and minimizing investment fees.
- Access to financial advisors. Blooom gives you access to financial advisors at no additional cost. You'll receive a response within 2-3 business days—or access to a live chat for Unlimited subscribers.
- Withdrawal alerts. Blooom will send a text message alert if there is a withdrawal from you retirement accounts.
Blooom Account Types
The ability to manage 401(k) account is what stands out to many, but that's not all Blooom can do. In fact, it can manage a variety of account types:
- Thrift Savings Plan (TSP)
- Traditional IRA
- Roth IRA
- SEP IRA
- Simple IRA
- Spousal IRA
Notice that Blooom doesn't support any kind of taxable accounts. It focuses on retirement accounts, so this makes sense.
Bloom Pros and Cons
Pros – Blooom has narrowed down their niche to investment management for 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, 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 assets. This is where Blooom excels.
Normally, employer-sponsored retirement plans have few investment options, often with high fees. Blooom also improves here, giving you a range of options.
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.
If you have an IRA or Roth IRA with Charles Schwab, Fidelity, or Vanguard, Blooom can manage those, too.
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 minimum account balance 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.
Blooom is a fiduciary financial institution which means it is legally required to act in your best interest. It has bank-level security with 256-bit encryption as well.
Another nice feature of Blooom is that it can identify hidden investment fees. High expense ratios can eat away at investment returns, and Blooom helps mitigate that.
One last point to consider if the support Blooom provides. The company is made up of tech-savvy and registered 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.
Blooom will analyze your 401k plan for free. If you want further financial planning advice, you'll have to sign up for one of its plans.
Blooom's fee structure is simple. There are three different plans, each with a flat management fee.
Each step up the pricing tiers includes all features from the tier below it.
- Essentials: $45/year. This plan includes a personalized portfolio with auto optimization and activity alerts.
- Standard: $120/year. Standard adds trade capability, withdrawal alerts, and advisor access.
- Unlimited: $250/year. Unlimited adds unlimited accounts. In addition, it adds priority advisor access which gives you access to live chats with an human advisors to answer all of your questions.
These annual fees are charged to a credit card or debit card on file. It's that simple; there are no hidden fees.
Now comes the part where we'll answer some of the more common questions about Blooom.
Is Blooom Legit?
Yes, Blooom is a legitimate company. It is an American company based in Leawood, KS.
Unfortunately, it is not Securities Investor Protection Corporation (SIPC) insured at this time.
However, Blooom is an SEC Registered Investment Advisor (RIA). And being an RIA means it must adhere to the strict standards of the SEC.
Is Blooom a Fiduciary?
Yes, Blooom does act as a fiduciary. As the company says on its website, "Beyond the legal binds of being an SEC Registered Investment Advisor, and fiduciary, we treat our clients like our best friends and family.
Clearly, it takes its commitment to serving its customers seriously. In fact, it even considers them part of the family.
Is Blooom Worth the Money?
Blooom can be a great investment, especially if you want help managing your 401(k). That's because it is still the only robo-advisor capable of managing this type of account.
The fees aren't incredibly high, either. For the Essentials plan ($45/year), you'll get a personalized portfolio analysis.
That said, Blooom won't actually place trades on your behalf unless you upgrade to the Standard plan ($120/year). If you don't want to manage your own portfolio, it could be worth paying $10/month for Standard.
The main things that are added with the Unlimited plan ($250/year) is it can manage an unlimited number of accounts (hence the name). The other plans only support one retirement account.
The other big feature added with Unlimited is priority advisor access, meaning you have access to a live chat with a financial advisor.
These flat fees are certainly reasonable, but deciding if Blooom is worth it means deciding if it's worth paying a small fee to have your 401(k) managed for you.
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.
Where most robo-advisors only deal with taxable accounts, Blooom can help with retirement accounts. Normally you would have to manage them on your own.
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.
All in all, Blooom is an excellent low-cost robo-advisor for managing your retirement savings. If you need financial advice, Blooom can offer that as well.
If that sounds like something you need, Blooom might be the right tool for you.
Click for Blooom Pricing and Details.