Blooom

7.8

Fees

8.3/10

Diversification

7.5/10

Ease of Use

9.9/10

Account Types and Services

5.6/10

Budget Flexibility

7.8/10

Pros

  • Fully automated service with a human touch
  • Low annual fees
  • Subscription-based service means you can cancel anytime
  • Free analysis of your current 401(k) plan
  • Independent, unbiased advice

Cons

  • Only manages 401(k) and defined contribution plans

2019 Blooom Robo Advisor Review

blooom logo

When it comes to your 401(k), the early bird gets the worm. If you start early, you can harness the power of compounding interest. But there’s a problem: not everyone knows a lot about managing investment portfolios. So instead of crunching the numbers manually or taking a crash course on Investing 101, why not let a Robo Advisor do all the hard work? This is the driving force behind Blooom.

Yes, Blooom is spelled with three o’s, which makes it unique (and prone to typos), but what makes it different from conventional robo advisors? Blooom is an investment advisory firm that caters to 401(k) plans. Some people spend huge money on a traditional human advisor to handle their non-taxable investment accounts. Blooom is designed to manage your 401(k) in a correct and proper manner without touching the money in your account.

Blooom was established in 2013 with its headquarters in Leawood, Kansas. The service is aimed at employer-sponsored retirement plans only. At the moment, Blooom is unable to manage IRAs or taxable investment accounts. So if you want a robo advisor to handle your taxable investments, you’re barking up the wrong tree.

For many people, their 401(k) plan is probably their single largest asset (apart from their home, perhaps). In this Blooom review, you’ll find out how they present an easier way to manage and grow your 401(k).

Fees and Deposit Limits

Special Promotion: If you sign up now using our link and use the code BESTROBO99, you can start investing your 401(k) plan with Blooom for only $99 per year!

The benefit of robo advisors over traditional human advisors is best demonstrated by comparing their fees and deposit limits. Blooom offers a brilliant free analysis of your existing 401(k) account with no obligation to continue to their paid service.

If you do want to continue with the paid managed service, it costs $120 annually. And since Blooom is designed to handle your existing 401(k), there are no deposit limits to think about.

Getting back to the annual fee, it’s quite clear Blooom is most beneficial to larger 401(k) accounts. If you think about it, managing a 401(k) worth $100,000 for $120 per year is not a bad deal. In fact, it equates to an annual fee of 0.12%. It’s even better when you use our link and code, because that fee drops to $99 (which ends up being an exceptional 0.099%!) This is among the lowest you’ll see in a robo advisor. It’s also many times cheaper than a traditional human advisor.

But the flat-fee structure may not work to your advantage if you have a smaller balance in your 401(k) account. In order to fully understand this, here’s a simple chart that compares the $99 annual fee as a percentage of assets per year based on the account balance:

Account Balance Blooom Fees
(annual percentage of assets)
$100,000 0.099%
$50,000 0.198%
$25,000 0.396%
$10,000 0.99%
$2,000 4.95%

Blooom Screenshots

Is Blooom Right for You?

Clearly, Blooom is best suited for larger account balances, ideally $50,000 and above, but over $25,000 also makes sense. It is hard to compare these rates to a traditional human or robo advisor since Blooom strictly caters to 401(k) and non-taxable accounts. But if you think about it, you get unlimited access to expert financial advisors for the fixed monthly fee, and this makes a lot of sense if you have a lot invested in your 401(k).

But the service is quite expensive for lower account balances. For example, a $10,000 balance will cost 0.99% each year with Blooom, while many other robo advisors will typically charge 0.25% to 0.50%. The point is the flat-fee structure is more oriented towards larger account balances.

If the fees are a bit too high for you, Blooom also offers a DIY plan for those just looking for the insight into what you should be invested in, without the ongoing management for a $49 one-time charge.

Diversification

We hate to say this, but diversification is not a strong attribute of Blooom. However, this has nothing to do with the service itself. Blooom is only available for 401(k), 401(1), 403(b), 457, and TSP plans. And like we said before, the service will not work with taxable investment accounts and IRAs.

Blooom does support multiple accounts; all accounts you have Blooom manage above the first are at a discounted rate of 25% off.

Blooom works with any 401(k) plan accessible online. Take note that Blooom may only work with plans that are provided by select employers. However, the service is designed to work with many different plan providers.

Ease of Use

financial adviceBlooom is easy to use, even for a newbie investor. The service is fully-automated but still allows you to have full control. The free analysis lets you play around with the service without opening a new account or even providing a credit card, and it allows you to see where your 401(k) has room for improvement. But to reiterate, the managed service costs $120 per year (or $99 per year if you use our link and discount code BESTROBO99) if you want to take full advantage of Blooom’s advisory service.

After completing the signup process, the Blooom robo advisor will analyze your 401(k) within 30 days. It factors in your current age and expected retirement age to come up with a solid plan; algorithms will handle the rest. Blooom then places the trades on your behalf, making adjustments as necessary.

The service automatically leans towards stocks and progresses to bonds as you approach retirement age. If you don’t like the changes, you have the option to change your risk preference to adjust the allocation. You can also adjust or change your retirement date manually.

But of course, we can’t let computers do all of the hard work. Blooom membership comes with chat access to financial advisors for all your tough questions, even beyond 401ks.

Accounts and Investment Types

Blooom is not a typical robo advisor. It only handles 401(k) accounts and it only works with the investment options that are offered in your 401(k), like mutual funds and ETFs. But the service will constantly monitor and rebalance your 401(k) account to obtain the best alignment with the ideal allocation.

You also get unlimited access to human advisors to answer all your finance-related queries, making Blooom a sort of hybrid robo advisor in disguise.

Hear the Blooom Story

2019 Blooom Review: Low Cost Robo Advisor for your 401(k) Investments

Suitability for Different Investment Budgets

blooom low feesThe $99 annual fee makes Blooom more suited for 401(k) plans over $25,000. But to further sweeten the deal, it’s payable via debit or credit card. This means Blooom does not withdrawal any fees directly from your retirement account.

As we mentioned above, we find Blooom to be ideal for investors with 401(k) balances above $50,000, and perfectly acceptable for those with balances over $25,000. Any lower than that though, and you’d probably be better off waiting until your balance gets a bit higher on its own, as the fees are likely to eat away at your gains. And unfortunately, there aren’t many other robo advisors that can manage your 401(k) accounts; in fact, we can’t think of any.

Conclusion

Blooom offers a cheaper and easier way to experience investment management services for your 401(k). It works with any online-accessible 401(k) and allows you to maintain control over your plan. But if for some reason you’re not satisfied after trying Blooom, you can cancel anytime.

On the flip-side, this robo advisor is not the best choice for lower 401(k) account balances, specifically $25,000 and below. If this is the case, you might end up paying larger fees in the long run.

Remember to use discount code BESTROBO99 when signing up to get your 401(k) managed for only $99 per year: