Investing in your 401(k) account at work has traditionally been one of the best ways to save for retirement. In fact, employer-sponsored retirement accounts can make a bulk of one's retirement balance, making it all the more important to understand how to optimize the investments within that account.
Unfortunately, many workplace custodians carry high-fee funds, as well as costly management fees that can destroy returns over your working career.
Blooom is a robo-advisory service that provides automated management of employer-sponsored retirement accounts, as well as Fidelity IRA accounts.
It is an SEC Registered Investment Advisor that offers free analysis for workplace accounts, including a fee analyzer, asset allocation recommendation, and even access to licensed financial advisors to help users maximize their retirement investing.
No other account fees apply (e.g. withdrawal, closing, trading, transfer)
|Expense Ratios||Expense ratios depend on work retirement plan offerings|
|Investment Options/Choices||Depends on work retirement plan offerings|
|Investment Account Options||
Workplace plans - 401(k), Thrift Savings Plan (TSP), 403(b), 401(a), 457
IRA, Roth IRA, SEP IRA, SIMPLE IRA, Spousal IRA, Non-deductible IRA (Fidelity Only)
|Portfolio Construction||Automatic portfolio rebalancing on all accounts|
|Tax Strategy||Tax-loss harvesting not applicable|
|Customer Service and Support||
Live chat and email support, 10am to 5pm EST
No phone support available
No mobile app available
Website is mobile-friendly, with full account functionality
Simple account setup, all done online.
To open an account, you can sign up with your email address, answer a few questions about risk tolerance, and connect to your work retirement account for portfolio suggestions.
|Security||Bank-grade data protection, 256-bit encryption, two-factor authentication.|
|Ease of access||Blooom is easily accessible on web browsers|
What is Blooom?
Blooom is an online robo-advisory service that focuses on workplace retirement account management. This includes plans like 401(k)s, 457s, 403(b)s, TSPs, and others. Blooom offers a free portfolio analysis to help users quickly find where they may be paying too much in investment fees, as well as a suggested portfolio asset allocation based on the investment choices within the workplace account.
Blooom has set itself apart as one of the only options that offers full workplace retirement account advisory services, as well as direct access to licensed financial advisors to answer any financial questions (including investment, budgeting, debt payoff, and general money advice).
Blooom is a great option for individuals looking to automatically optimize their workplace investments while minimizing costly account fees.
How Does Blooom Work?
Blooom is a robo-advisory service that uses advanced algorithms to analyze and optimize workplace retirement accounts. Users can sign up for a free account online, answer a few questions about investment risk tolerance, and securely connect a workplace retirement account.
Blooom will perform an initial analysis for free, showing users a breakdown of account fees, including fund fees, as well as overall asset allocation. Blooom will then give suggested account changes, including updated asset allocation, new funds to invest in order to lower fees, and how to manage your risk within the account.
Users can choose to make the account changes themselves, or subscribe to one of the paid service plans to allow Blooom to manage the account.
Blooom offers some unique features in the robo-advisory world, including a free analysis of your workplace retirement account. Here are a few of our favorite features from Blooom:
Personalized Portfolio Recommendations (Free)
Blooom offers a free, deep-dive analysis of your 401(k) or other work retirement account. This service allows users to connect their workplace account directly, and give a report on your retirement plan fees, asset allocation, and risk.
It will provide suggested updates to your investments, including lower-fee fund options within your account, as well as a suggested asset allocation based on a few risk assessment questions.
This option is free, and users can take this information and make the suggested changes themselves, or sign up for a paid plan to have Blooom manage the account.
Available as part of the Standard and Unlimited paid plans, Blooom helps you set a target asset allocation, and then monitors that allocation over time. If your allocation drifts from the initial target, Blooom will automatically rebalance to bring it back to the specified allocation.
Financial Advisor Access
Blooom Standard and Unlimited paid plan users will gain direct access to a licensed financial advisor to ask any money questions they may have. This not only includes questions about the retirement plan Blooom is managing, but also any financial questions about debt payoff, retirement, savings, and major purchases.
Blooom Standard users will have email access, with responses typically within 2 - 3 business days, while Unlimited users can chat live with a financial advisor (during normal business hours).
SMS Withdrawal Alerts
For both Standard and Unlimited accounts, Blooom offers SMS alerts for any account withdrawals. This helps secure user accounts, and immediately alerts them of any account withdrawals, including fees or other initiated withdrawals.
Account Types Available
Blooom manages most workplace accounts, including 401(k), Thrift Savings Plan (TSP), 403(b), 401(a), 457 accounts.
Blooom recently added support for IRA accounts, including IRA, Roth IRA, SEP IRA, SIMPLE IRA, Spousal IRA, Non-deductible IRA accounts. Currently, Blooom will only manage IRA accounts for Fidelity customers.
Blooom does not manage taxable brokerage accounts.
Blooom offers a free analysis of your workplace retirement account (or IRA), but also offers full account management for a fee. For users that want to hand over automatic management of their account to Blooom, there are several levels of service available.
Blooom Essentials ($45/year). The basic Blooom package includes a personalized portfolio, which shows you exactly which funds to invest in within your workplace retirement account. While this option does not execute trades for you, it will suggest the exact asset allocation to each investment, and monitor changes in your account to help you keep your target asset allocation.
Blooom Standard ($120/year). This option has the personalized portfolio from Essentials, plus Blooom will execute the trades for you, automatically rebalance your account when necessary, send SMS withdrawal alerts, and give you direct access to the licensed financial advisor via email.
Blooom Unlimited ($250/year). This option gives you everything from Standard, plus priority access to a licensed financial advisor, which includes the option of live chat.
Is Blooom Legit?
Blooom is one of the first robo-advisory services to offer workplace retirement account management, and does a decent job of helping clients lower fees and invest smarter. Blooom is an SEC Registered Investment Advisor, and a secure way to take advantage of automatic investing management for a low annual fee.
Blooom does not own the funds in your retirement accounts, but is a fiduciary that is required by law to act in the best interest of its clients. Its algorithm is designed to help you keep fees as low as possible while investing in diversified funds that fit within your desired asset allocation and risk tolerance. As a third-party, Blooom has no interest in selling you on the high-fee funds that your 401(k) custodian might recommend, so it is a great option for truly unbiased financial advice.
Pros and Cons
While Blooom can be a great option for those looking to automate their workplace retirement investing, it is not a perfect service. Here are a few things we love about Blooom, as well as a few areas they could improve.
Professional investment advice for workplace retirement accounts
Free fee analyzer to help users save (potentially) thousands in investment fees
Access to licensed financial advisors (paid accounts only)
No minimum investment required
Don’t need permission from your job to have Blooom manage your account
Paid service fee may be high for small account balances
No phone support or access to advisors
Limited IRA support
Blooom is designed to manage your workplace account, helping you avoid confusing fees, and giving professional advice on how to pick the best funds within your account.
Your workplace retirement account may very well be your largest investment account by the time you retire, so finding a way to lower fees, diversify your investments, and manage your risk can have a massive long-term benefit to your retirement savings.
If you want a free analysis of your workplace retirement account (or Fidelity IRA), Blooom is a simple-to-use, comprehensive tool that can give you personalized recommendations within minutes. If you would like to have full account management and advisory services available to you, Blooom is one of the best options on the market, with a flat-fee structure that keeps your costs low as your account balances rise.
You can learn more about Blooom here, and try out the portfolio analysis for free.