Hedge Fund Managers

[Automek]

The 40 richest hedge fund managers
Quase todos 45+

[Counter Retail Trader]

Isto ate faz sentido... pena ser um artigo curto (que ate parece para angariar clientes..)

http://news.efinancialcareers.com/uk-en/228265/why-hedge-fund-traders-fail/


Why bank traders fail when they move to hedge funds. And what they can do about it


The move from being a trader in a bank to a portfolio manager in a hedge fund is one that’s been taken by many, and has equally proven extremely challenging for many. For every bank trader who’s made the leap successfully, there are many more who’ve made the leap and failed.

Why? Because the leap from being a trader in a bank to being a trader in a hedge fund is often far more challenging than many people think. This is why many bank traders move to hedge funds for a few years and then move back again.

There are a number of reasons for this. Firstly, the pressure in a hedge fund is far higher. Hedge fund portfolio managers are under pressure to achieve consistent returns form the start. When the market environment isn’t right at a bank, traders with a strong reputation and track record can often take a back seat as they wait for a more productive risk environment. However, this approach is a rarity in the hedge fund world, where investors are constantly checking the performance of their investments and where portfolio managers are expected to trade a lot more actively. Traders from banking backgrounds can find it hard to make sound and rational decisions under these new conditions, and can become anxious as a result.

Secondly, traders from banks can find it hard to adapt to the social environment at hedge funds. The traders who move across are often high-performers who were the big fish in the big investment banking pond. In a hedge fund, they find themselves in a smaller pond with some far bigger fish. Our research suggests that people are heavily affected by this aspect of the transition. Subconsciously, it has an invisible pull on their trading strategy, biasing their decision-making, and adding extra pressure on them to perform.

Thirdly, when you move from a bank to a hedge fund, you lose the ‘noise.’ When you’re sitting on a large trading floor in an investment bank with hundreds of other traders, there’s a buzz which you pick up on and which in itself is quite revealing. A lot of people don’t even realize they’re trading off this noise – until it’s gone. In a hedge fund, there are far fewer traders and they will quite often be trading completely different markets. You therefore miss the hum, the buzz, the chatter, the talk and seeing and feeling how people react. These are all little signals that you pick up subconsciously, and which it can be hard to do without.

Fourthly, traders often find that hedge funds have a very different approach to risk to investment banks: they’re far stricter. Because hedge funds are dealing with investors’ money, their investments are often scrutinized in fine detail. They therefore pay far more attention to risk limits and are far less tolerant of people who break them. Historically, banks were far less stringent, although this may be changing. Ideally, you want to find a firm that fits with your ‘risk DNA.’ We worked with one high quality bank trader recently who had a great track record, and excellent credentials and qualifications, including an engineering degree from MIT. However, our analysis suggested he had the wrong risk profile for the hedge fund thinking of hiring him. This proved correct, the individual was released by the firm after less than three months: his performance had been very poor and they quickly cut their losses.

Fifthly, ex-bank traders who move to hedge funds can simply become lonely. They lose the camaraderie and support network offered by colleagues and salespeople on a bank’s trading floor. Trading in a bank can feel like a team effort, whereas trading in a hedge fund is often more individualistic. Hedge funds can be serious places and people can become lonely as a result.

Lastly, traders who move to hedge funds may simply not fit in with the fund’s DNA. Each hedge fund is different – one might be serious, one might be more prone to banter, some may be full of introverts and others may be more outgoing. Some are full of diverse characters and others aren’t. Ideally you should pick up on this during an interview, but it’s not always obvious.

How can you avoid these pitfalls? Coaching helps, especially when it’s undertaken with the cooperation of your hedge fund line manager. However, the main answer is to be aware that they exist and to prepare for them as best you can. Hedge funds can be exciting places to work: they are smaller, flatter, and more democratic organizations than banks and this is one of their strengths. However, they are also very different to the banking sector. The more that you go in with your eyes open, the greater your chances of success.

Steven Goldstein is a former senior rates and FX trader at Credit Suisse, an associate director at Commerzbank and a senior prop trader in the rates group at American Express. He’s now a trading coach with Alpha R Cubed and Chrysalis Performance Coaching.

[zAPPa]

Meredith Whitney, the star analyst whose bearish calls on financial stocks were borne out by the credit crisis, has resurfaced as an investment manager at a Bermuda insurance company.

Ms Whitney has been trying to rebuild her career after the closure of a consulting business and then a hedge fund that she set up to try to capitalise on her fame.

 http://www.ft.com/cms/s/0/050c9ed4-9e0a-11e5-b45d-4812f209f861.html#ixzz3uf2XZEPn

[Counter Retail Trader]

Acho que  o link diz tudo... parte do artigo esta nas imagens...
http://www.valuewalk.com/2016/01/the-10-best-and-worst-trades-of-all-time-infographic/]
[url]http://www.valuewalk.com/2016/01/the-10-best-and-worst-trades-of-all-time-infographic/[/url]

[Mystery]

Isto ate faz sentido... pena ser um artigo curto (que ate parece para angariar clientes..)

http://news.efinancialcareers.com/uk-en/228265/why-hedge-fund-traders-fail/


Why bank traders fail when they move to hedge funds. And what they can do about it


The move from being a trader in a bank to a portfolio manager in a hedge fund is one that’s been taken by many, and has equally proven extremely challenging for many. For every bank trader who’s made the leap successfully, there are many more who’ve made the leap and failed.

Why? Because the leap from being a trader in a bank to being a trader in a hedge fund is often far more challenging than many people think. This is why many bank traders move to hedge funds for a few years and then move back again.

There are a number of reasons for this. Firstly, the pressure in a hedge fund is far higher. Hedge fund portfolio managers are under pressure to achieve consistent returns form the start. When the market environment isn’t right at a bank, traders with a strong reputation and track record can often take a back seat as they wait for a more productive risk environment. However, this approach is a rarity in the hedge fund world, where investors are constantly checking the performance of their investments and where portfolio managers are expected to trade a lot more actively. Traders from banking backgrounds can find it hard to make sound and rational decisions under these new conditions, and can become anxious as a result.

Secondly, traders from banks can find it hard to adapt to the social environment at hedge funds. The traders who move across are often high-performers who were the big fish in the big investment banking pond. In a hedge fund, they find themselves in a smaller pond with some far bigger fish. Our research suggests that people are heavily affected by this aspect of the transition. Subconsciously, it has an invisible pull on their trading strategy, biasing their decision-making, and adding extra pressure on them to perform.

Thirdly, when you move from a bank to a hedge fund, you lose the ‘noise.’ When you’re sitting on a large trading floor in an investment bank with hundreds of other traders, there’s a buzz which you pick up on and which in itself is quite revealing. A lot of people don’t even realize they’re trading off this noise – until it’s gone. In a hedge fund, there are far fewer traders and they will quite often be trading completely different markets. You therefore miss the hum, the buzz, the chatter, the talk and seeing and feeling how people react. These are all little signals that you pick up subconsciously, and which it can be hard to do without.

Fourthly, traders often find that hedge funds have a very different approach to risk to investment banks: they’re far stricter. Because hedge funds are dealing with investors’ money, their investments are often scrutinized in fine detail. They therefore pay far more attention to risk limits and are far less tolerant of people who break them. Historically, banks were far less stringent, although this may be changing. Ideally, you want to find a firm that fits with your ‘risk DNA.’ We worked with one high quality bank trader recently who had a great track record, and excellent credentials and qualifications, including an engineering degree from MIT. However, our analysis suggested he had the wrong risk profile for the hedge fund thinking of hiring him. This proved correct, the individual was released by the firm after less than three months: his performance had been very poor and they quickly cut their losses.

Fifthly, ex-bank traders who move to hedge funds can simply become lonely. They lose the camaraderie and support network offered by colleagues and salespeople on a bank’s trading floor. Trading in a bank can feel like a team effort, whereas trading in a hedge fund is often more individualistic. Hedge funds can be serious places and people can become lonely as a result.

Lastly, traders who move to hedge funds may simply not fit in with the fund’s DNA. Each hedge fund is different – one might be serious, one might be more prone to banter, some may be full of introverts and others may be more outgoing. Some are full of diverse characters and others aren’t. Ideally you should pick up on this during an interview, but it’s not always obvious.

How can you avoid these pitfalls? Coaching helps, especially when it’s undertaken with the cooperation of your hedge fund line manager. However, the main answer is to be aware that they exist and to prepare for them as best you can. Hedge funds can be exciting places to work: they are smaller, flatter, and more democratic organizations than banks and this is one of their strengths. However, they are also very different to the banking sector. The more that you go in with your eyes open, the greater your chances of success.

Steven Goldstein is a former senior rates and FX trader at Credit Suisse, an associate director at Commerzbank and a senior prop trader in the rates group at American Express. He’s now a trading coach with Alpha R Cubed and Chrysalis Performance Coaching.

as principais razões estão relacionadas com 1) o tempo que é necessário investir em actividades que não a gestão de carteiras e 2) a ausência de capital permanente

[Counter Retail Trader]

Quant hedge fund manager Roy Niederhoffer, the founder of New York-based R.G. Niederhoffer Capital Management, is off to a tremendous start in 2016.

The $731 million Niederhoffer Diversified Offshore Fund is up 18.71% through February 10, according to performance data compiled by HSBC.

Meanwhile, the average hedge fund is down -4.53% this year, according to data from Hedge Fund Research.

It's a horrible start for hedge funds in general, and follows a brutal year in 2015, with the average fund falling -3.64%, HFR's data shows.

Niederhoffer's fund also had a good year in 2015, ending up 4.32%.

The fund's gone through some rocky periods in the last five years though, slipping 16.7% in 2011 and falling 22.39% in 2012, according to the HSBC performance data.

Over the last twenty years, the fund has posted annualized returns of 6.17%.

The computers are winning
Niederhoffer, 49, is part of the group of hedge funds called managed futures funds or commodity trading advisers (CTAs). CTAs are having a killer year, with the average fund tracked by HSBC up 5.5% this year.

Most CTAs are defined as trend following, meaning they use quantitative models and invest in financial futures across currencies, stocks, bonds, and commodities. Basically, they go long markets that are going up and short markets that are going down. Many CTAs have been short, and with the markets selling off they have done well in January.

Niederhoffer is different from most CTAs though. He's not a trend following CTA.

He explained this in a recent interview with former hedge fund manager Niels Kaastrup-Larsen's podcast "Top Traders Unplugged"

"...I think there's been a difficulty in explaining trend following, why it should work. Everyone knows (or I should put "knows" in big quotation marks) that stocks rally and that companies get better over time at producing earnings and therefore there should be this upward bias in equities. It's not quite so obvious why there should be a tendency of a market move once it's established itself to continue in that same direction. I think in fairness, we all, in the CTA world, have been a little bit lax in providing the fundamental explanations for why this strategy should work. In my case, we really have gone in a different direction from most CTAs, and I always say that our correlation to CTAs which has been about .1 historically, makes us more different from CTAs than CTAs are from hedge funds and equities and pretty much everything else out there. We certainly trade the same things that most CTAs trade."

Niederhoffer employs a short-term trading strategy. He also said on the podcast that his strategy does better when there's volatility and stocks are going down:

"...the strategy that we employ has a very specific intent which may distinguish it from many other things out there. We are trying to combine both interesting standalone returns with very, very consistent downside protection for people's portfolios in equities, traditional investments overall and also alternatives. What we try to do is maintain a consistent negative correlation to equities. In other words, we do better than average when equities are having trouble, and there's a lot of volatility. Typically when portfolios that most people have are having their toughest times, our strategy's actually tuned not to maximize our own sharp ratio, not to maximize our own risk-adjusted return, but actually to maximize the risk-adjusted returns of our clients."

Niederhoffer, who developed an interest in computers as a kid, graduated magna cum laude from Harvard in 1987 with a degree in computational neuroscience.

After college, he worked for his older brother, Victor Niederhoffer, the famous quant trader. In 1993, he launched his hedge fund firm.

Aside from investing, he's talented in other areas of his life. He's a violin player with the Park Avenue Orchestra and he's played in Carnegie Hall and Avery Fisher Hall. He's also on the board of The Harmony Program, a nonprofit that provides music programs to children in underserved areas.

He was also involved in saving the New York City Opera after it went bankrupt in October

[Zel]

em geral os resultados desses hedge fund managers sao tao maus que custa acreditar

[Counter Retail Trader]

em geral os resultados desses hedge fund managers sao tao maus que custa acreditar
[/quote

O meu cunhado nao acredita que ha quem consiga ganhar algo a negociar , isto porque ve varias contas de milhoes a serem geridas la fora com um retorno que nem chega a 10%, e isto pelos pros...
Obvio que nao tem grande comparação..., mas é incrivel a percepção que as pessoas tem... como ve algo presumem que é o normal..ou o fora de serie

Explica lhe que nem tudo é high water mark (ele nem sabe o que é) e que ha quem ganhe o seu (e nao é pouco) mesmo que nao tenha sucesso

[Zel]

em geral os resultados desses hedge fund managers sao tao maus que custa acreditar
[/quote

O meu cunhado nao acredita que ha quem consiga ganhar algo a negociar , isto porque ve varias contas de milhoes a serem geridas la fora com um retorno que nem chega a 10%, e isto pelos pros...
Obvio que nao tem grande comparação..., mas é incrivel a percepção que as pessoas tem... como ve algo presumem que é o normal..ou o fora de serie

Explica lhe que nem tudo é high water mark (ele nem sabe o que é) e que ha quem ganhe o seu (e nao é pouco) mesmo que nao tenha sucesso

pois, o teu cunhado esta bem enganado
mas eh preciso ver que eh mais facil ganhar com contas pequenas

[Counter Retail Trader]

sim nada comparavel , mas no geral as pessoas ainda vem o mercado como Casino e outras coisas associadas do genero

[JoaoAP]

why-do-majority-of-fund-managers-cannot-beat-the-sp500/


As 2016 began, USA Today reported that 66% of fund managers could not match the S&P500. Back in 2014, 86% of investment managers lost money. Studies back in 2013 showed the same general ratio that only 24% of active mutual fund managers outperform the market index. Last year, 2016 was the WORST year for fund managers picking stocks. The London FT reported that active fund managers last September were lagging behind the stock market. Stockpickers in their semi-annual survey found that 90% of all managers fell short of benchmark.
This is a HUGE problem. The crisis in funds management illustrates what I have been warning about. OPINION is your worst enemy. I try on this blog to cover the world range of topics. To be a good hedge fund manager. the first thing you MUST do is be on top of everything unfolding in the world ALL the time. The tsunami waves of market corrections and breakouts ALWAYS unfold from an international perspective. Even the US media never really talked about BREXIT until about 10 days before it even took place. You cannot successfully invest or manage money and be oblivious to world trends.

[Mystery]

porque é estatísticamente impossível

why most drivers in a room full of drivers cannot beat the average driver in the room

[Incognitus]

porque é estatísticamente impossível

why most drivers in a room full of drivers cannot beat the average driver in the room

Não, não é impossível à maioria dos condutores numa sala baterem o condutor médio dentro dessa sala. Depende da distribuição de abilidade, se existirem alguns poucos condutores incrivelmente maus (e menos incrivelmente bons), a maioria já pode bater a média.

[Kin2010]

porque é estatísticamente impossível

why most drivers in a room full of drivers cannot beat the average driver in the room

Não, não é impossível à maioria dos condutores numa sala baterem o condutor médio dentro dessa sala. Depende da distribuição de abilidade, se existirem alguns poucos condutores incrivelmente maus (e menos incrivelmente bons), a maioria já pode bater a média.

Além disso, poderia ser que a maioria ou quase todos os hedge fund managers batessem o mercado simplesmente porque os outros intervenientes não batiam, e estes baixavam a média.

Mas a realidade é oposta. A média dos hedge funds é inferior à média do mercado. Creio que isso significa que é melhor investir de olhos fechados, ao acaso, do que investir num hedge fund.

[Meme Dealer]

Abstract

Performance of Renaissance Technologies’ Medallion fund provides the ultimate counterexample to the hypothesis of market efficiency. Over the period from the start of trading in 1988 to 2018, $100 invested in Medallion would have grown to $398.7 million, representing a compound return of 63.3%. Returns of this magnitude over such an extended period far outstrip anything reported in the academic literature. Furthermore, during the entire 31-year period, Medallion never had a negative return despite the dot.com crash and the financial crisis. Despite this remarkable performance, the fund’s market beta and factor loadings were all negative, so Medallion’s performance cannot be interpreted as a premium for risk bearing. To date, there is no adequate rational market explanation for this performance.

TOPICS: Portfolio management/multi-asset allocation, performance measurement

Key Findings

• The performance of Medallion Fund was unprecedented over the 31 years from January 1998 to December 2018.

• The performance results cannot be rationalized as a risk premium.

• Medallion represents the ultimate challenge to the efficient market hypothesis.

© 2020 Pageant Media Ltd






https://jpm.pm-research.com/content/early/2020/01/14/jpm.2020.1.128

[zAPPa]

• The performance of Medallion Fund was unprecedented over the 31 years from January 1998 to December 2018.

• The performance results cannot be rationalized as a risk premium.

• Medallion represents the ultimate challenge to the efficient market hypothesis.

https://jpm.pm-research.com/content/early/2020/01/14/jpm.2020.1.128

https://www.fnac.pt/The-Man-Who-Solved-the-Market-Gregory-Zuckerman/a7331403?&origin=google_dsa_livro&gclid=EAIaIQobChMIg-O5uvDy7AIVBLDtCh03-g18EAAYASAAEgLLXPD_BwE&gclsrc=aw.ds

[Meme Dealer]

                 

           Thanks  💯 👍

[Thorn Gilts]

porque é estatísticamente impossível

why most drivers in a room full of drivers cannot beat the average driver in the room

Não, não é impossível à maioria dos condutores numa sala baterem o condutor médio dentro dessa sala. Depende da distribuição de abilidade, se existirem alguns poucos condutores incrivelmente maus (e menos incrivelmente bons), a maioria já pode bater a média.

Se for binário não. :-)

[Thorn Gilts]

• The performance of Medallion Fund was unprecedented over the 31 years from January 1998 to December 2018.

• The performance results cannot be rationalized as a risk premium.

• Medallion represents the ultimate challenge to the efficient market hypothesis.

https://jpm.pm-research.com/content/early/2020/01/14/jpm.2020.1.128

Obrigado, boa recomendação.


https://www.fnac.pt/The-Man-Who-Solved-the-Market-Gregory-Zuckerman/a7331403?&origin=google_dsa_livro&gclid=EAIaIQobChMIg-O5uvDy7AIVBLDtCh03-g18EAAYASAAEgLLXPD_BwE&gclsrc=aw.ds

[Counter Retail Trader]

nao sei propriamente qual a melhor categoria , mas fiquei surpreendido com isto que tenho seguido desde o começo.

https://www.investmentnews.com/motif-investing-closes-191780

The automated investment platform, which raised roughly $126 million in funding since launching in 2012, is just the latest digital wealth manager to shut down

Motif specialized in impact investing, where clients can chose to invest in companies that promote social good. For a subscription fee, clients could create individualized portfolios that adhered to their own ESG guidelines and could see exactly which company stocks were in their portfolios at any given time.
The automated investment platform listed approximately $869 million in client assets on its latest Form ADV, filed in March, however only about $18 million was managed in discretionary accounts. The firm had 184 clients, according to the regulatory filing.


https://accessipos.com/motif-investing-what-happened/

What Happened to Motif Investing and Folio?

Motif Investing was an innovative online broker that popularized thematic investing, empowering investors to buy groups of similar stocks in one investment transaction.
For a time, it was also the most promising platform for IPO investors. Motif Investing provided IPO access to ordinary investors for a minimum investment of $250.
In the Fall of October 2015, the company announced the launch of its IPO investing platform as a place for customers to access shares of IPO stocks. However, it wasn’t until about a year later that the deals started to arrive.
From late 2016 through 2019, Motif Investing facilitated more than 200 IPOs and secondary offerings on its platform. Some of the more notable deals were Trivago, Redfin, several biotech IPOs, and a handful of Reg A+ IPOs.

By early 2020, the IPO deal flow slowed. As Charles Schwab led the online brokerage industry into commission-free trading, Motif Investing was meeting with potential suitors.
Motif Investing sold its customers and technology to two different buyers in an unexpected fate, breaking up the company and directing its former customers to a lesser-known investing platform.
This article lays out what happened to Motif Investing and what lies ahead for its former customers.

Motif Investing Customers Sold to Folio Investing
On April 17th, 2020, Motif Investing customers received an email informing them that the company was ceasing its operations.
All individual and registered investment advisor (RIA) accounts transferred to Folio Financial, the McLean, VA-based boutique wealth management custodian, fintech, and online broker that previously purchased the customer accounts from LOYAL3 and BuyandHold.com.
It appears the Motif Investing customers will go to the Folio Investing platform, not the FolioFirst platform.
Folio Investing is a lower-tier option for individual investors that offers folios, which are similar to motifs. The platform pre-dated FolioFirst, which was built for former LOYAL3 customers and comes with a $5 per month fee.
Folio Financial, the umbrella company, has other unique capabilities, including the ViaFolio private investing platform and its institutional platform for RIAs.

It also maintains a secondary marketplace for LendingClub called FolioFN.
Folio Investing also provided limited access to Reg A+ IPOs, a type of crowdfunding IPO enabled by the JOBS Act of 2012.
Customers looking to switch from Folio Investing to an alternative online broker can find suitable options further below.
Motif Investing Technology Sold to Charles Schwab
A few weeks after the Motif and Folio Investing announcement, Charles Schwab announced its acquisition of Motif Investing’s technology, including source code, patents, and algorithms.
Schwab also hired most of Motif Investing’s San Francisco-based engineering team and its founder, Hardeep Walia.
We continue to see an increasing number of clients interested in customizing their investing experience to suit their values, objectives, and personal circumstances. We intend to leverage Motif’s platform to build on Schwab’s existing capabilities and help accelerate our development of thematic and direct indexing solutions for Schwab’s retail investors and RIA clients – all with the sophisticated digital experience our clients expect from Schwab. – Neesha Hathi, EVP and Chief Digital Officer at Schwab
Direct indexing is the term Schwab is now using to describe a custom ETF-like investing experience with fractional shares, a la Motif.
Reports suggest that the Motif Investing customer base was of no interest to Charles Schwab, so they declined the customers and purchased only the technology.

Retail Motif Investing customers had smaller average account balances than Charles Schwab’s existing client base.
Goldman Sachs Purchased Folio Investing
Less than a month after the Folio Financial customer acquisition announcement, Goldman Sachs purchased Folio Financial for an undisclosed sum.
Folio Financial seems to be a jack of all trades but master of none. With various customer accounts from different acquisitions over the years, and maintaining at least two separate retail platforms, perhaps it was too segmented to consolidate and grow alone.
Goldman Sachs was looking to further its business expansion into the retail banking space on the heels of its successful growth of the Marcus online banking and lending platform.
The institutional platform will become a new RIA product for Goldman Sachs.
For the individual accounts, Goldman Sachs can either improve and consolidate Folio Investing and FolioFirst, sell the accounts, or launch a brand new standalone platform or a brokerage integrated with Marcus.
This may be an exciting new offering for patient customers.
Folio Investing Accounts Sold to Interactive Brokers
On December 4th, 2020, Interactive Brokers announced that it purchased the self-directed retail brokerage segment from Folio Investments Inc (owned by Goldman Sachs).
Goldman Sachs will keep the clearing and custody services created by Folio Investments for investment advisors.
The acquisition involves 70,000 retail accounts with assets totaling about $3 billion (~43,000 per account).
Since the transaction involves all self-directed retail accounts, we can infer this includes both the individual Folio Investing accounts (former non-RIA Motif) and FolioFirst (former LOYAL3) accounts.
This transaction appears to be the end of the LOYAL3 and Motif customer saga. Notably, only 70,000 accounts remain. The original LOYAL3 accounts totaled about 400,000, as I recall. Motif and Folio Investing never disclosed the number of accounts involved in the transaction.
That means most of the former LOYAL3 customers already closed or transferred accounts, and many of the Motif customers followed suit.
Interactive Brokers should serve as a permanent home for these customers, finally getting access to a full-service commission-free broker.
The Downfall of Motif Investing
What led to the end of Motif Investing?
First and foremost, I don’t think thematic investing ever resonated with retail investors because active investors seek to buy and trade best of class stocks.
For example, if you buy a group of biotechnology stocks, your portfolio will rise the average of all the stocks combined.
However, if you can identify the best stock of the bunch and only own that one, your portfolio will benefit.
Of course, finding that best in class is the challenge, but Motif Investing was the antithesis of a best in class investing strategy.
I also believe Motif Investing became distracted from its core offering instead of focusing on continuous improvement. Investors wanted zero-commission trades and a simplified investing experience.
Motif offered neither.
The company focused a great deal of its attention on ESG investing (environmental, social, and governance) with its Motif Impact product.
ESG always seems like the next big thing in retail investing, but most investors aren’t interested, preferring active trading, dividend growth, or passive indexing strategies.
Swell Investing, an offshoot of Pacific Life Insurance, was exclusively aimed at ESG investors. It failed, as did Motif Impact.
Motif Blue was an attempt to create a recurring revenue model, likely pushed by its venture investors.
Meanwhile, Robinhood entered the industry as a lightweight app with zero trading commissions.
The IPO platform was probably a distraction too. Though exciting for those of us interested, it wasn’t enough to drive new revenue growth.
The biggest disappointment was lack of access to the high-demand IPOs and an abundance of mediocre deals.
Motif built a robust IPO platform, but Charles Schwab already has its own.
The wealthiest Schwab customers will likely continue to get preferred access to the high-demand IPOs. Former Motif IPO investors should expect to be out of the loop unless Goldman Sachs builds IPO investing into its new endeavor.
Motif Investing never lowered its motif trading fees to zero, enabling more ambitious platforms such as Robinhood and M1 Finance to increase market share.
The company de-emphasized peer referral and affiliate marketing efforts while its competitors aggressively grew theirs.
Motif’s sixth and final funding round closed in January 2015. With an unproven business model and lack of new funding, April’s announcement was inevitable.
Motif Investing Alternatives
Now that former Motif Investing customers have been moved to the Folio Investing platform, what are the best alternatives if you’re looking to switch?
If you like the Motif Investing model, your best bet may be to switch to Charles Schwab since they’ve acquired the technology. It remains to be seen which aspects of Motif Investing will be adopted.
For IPOs
Former Motif IPO investors have two decent options to invest in IPOs. The two brokers below have partnered with ClickIPO, a smartphone app that helps match investors with IPO deals.
The first is Tradestation.
Tradestation is a full-service online broker with excellent desktop and smartphone access. The platform is integrated with the ClickIPO app so that you can place orders on the app, and allocated shares show up in your Tradestation account.
Get started with IPO investing with a $500 minimum account balance.



For Motif-Style Investing
Motif Investing was innovative and unique how it enabled investors to create personalized mini-ETFs.
A newer broker that empowers investors to do the same thing is M1 Finance. M1 Finance’s core investing platform is designed for long-term investors.
On M1, investors create customized pies, including whatever stocks or ETFs the investor wants to own in pre-determined allocation percentages.
Every time the investors adds more funds to the account, M1 Finance automatically distributes new funds into the portfolio as allocated.
It’s a way to dollar cost average into a portfolio of stocks instead of individual stocks or ETFs. You can easily use the pies as a replacement for motifs.
Read my M1 Finance review here to understand how it works. The platform is more intuitive than Motif Investing. Trades are 100% commission-free.
Conclusion
I am a former Motif Investing customer who joined to get free access to IPOs. I’m grateful that I participated in a handful of profitable deals. Still, the IPO access was not enough of a value for me to maintain an additional investing account.
I closed my account to consolidate and simplify my overall investing strategy.
In the wake of LOYAL3, Motif Investing demonstrated that ordinary investors have a strong desire for IPO access, and built a powerful and seamless platform to facilitate deals.
But they demonstrated that breaking into the old-boys-club of IPO share allocation is challenging for start-ups in an industry full of behemoths.
Perhaps ClickIPO and its partners are learning this now.
The lesson to take away from the downfall of Motif Investing is that there’s value in innovative technology. But investors also demand simplicity, flexibility, zero-fee commissions, and consistent improvement to core offerings.
Companies that get too distracted from their core products may be passed by if they aren’t on the lookout.
And another takeaway, the most prominent players continue to grow with strategic acquisitions. Aspiring broker start-ups beware.
Congratulations to the Motif Investing team for a triumphant acquisition.