Folio Investing review
Its prepackaged investment baskets are unique, but fees are high and it’s not currently accepting new investors.
Investors seeking diversified bundled investments may be interested in the Folio Investing platform. But the brokerage doesn’t have the best track record among investors, and traders seeking bonds, options, futures or forex will need to look elsewhere.
- Consider Folio Investing if you’re a passive investor interested in prepackaged investments.
- Look elsewhere if you’re an active trader that relies on intraday trading.
$15 per quarter
How does Folio Investing work?
Folio Investing is an online investment platform that offers self-directed brokerage accounts with access to stocks, fractional shares, exchange-traded funds (ETFs), mutual funds, American Depository Receipts (ADRs) and real-estate investment trusts (REITs).
A variety of accounts are available, including a comprehensive lineup of retirement accounts, and investors have access to tax-loss harvesting, automated portfolio rebalancing and margin trading.
Among the platform’s offerings are “folios” — bundled investment baskets of up to 100 stocks, mutual funds and ETFs. Investors can select from over 160 Ready-to-Go folios or customize their own. Market research is provided by Quotemedia and investors have access to charting tools to track their investments against indices, mutual funds and individual securities.
How easy is it to use?
According to investor feedback on Reddit, Folio Investing’s platform is outdated and cumbersome to navigate. Similar feedback has been reported on Folio Investing’s mobile app from both Android and Apple users.
Folio suggests that its account signup process can be completed online — but as the platform currently isn’t accepting new investors, we were unable to explore the application process.
Who is Folio Investing best for?
Folio Investing may be a practical fit for:
- Passive investors. Automated features like portfolio rebalancing and tax-loss harvesting can help passive investors make the most of their funds without copious research or account monitoring.
- Buy-and-hold investors. Ongoing commissions make Folio Investing’s fee structure better suited to buy-and-hold investors executing fewer trades than day traders.
Prepackaged folios make this platform ideal for investors seeking structured, guided investments. And features like automatic portfolio rebalancing allow for a set-it-and-forget-it approach that helps reduce the stress of consistently monitoring your investments.
That said, Folio Investing isn’t for everyone. Its window trading feature, ongoing commissions and lack of sophisticated research tools may not be able to meet the needs of active traders.
Pricing and fees
Folio Investing isn’t priced competitively when compared to its peers. Not only does it charge ongoing monthly subscription fees — a rarity in the industry outside robo- and human-managed portfolios — it also charges hefty commissions with added fees for investors who want to execute market, limit, stop or stop-limit orders.
Compare Folio’s fees to the commission-free trading available through most brokers on the market, like Charles Schwab, Robinhood, TD Ameritrade and Webull, and its pricing structure is all the more unappealing. Granted, Folio’s prepackaged folio investment baskets are a unique offering, but investors will need to gauge whether this feature is worth the ongoing cost.
Folio’s fee structure is complex. Unlimited accounts are billed on a monthly or annual basis. Basic accounts, on the other hand, are billed on a quarterly basis — but the $15 fee only applies to investors who hold tradable securities in a funded account who have made three or fewer trades in the previous quarter.
The structure of its commission fees is also confusing. Folio charges commissions based on “Window Trading,” with fees that apply per window, per security. Window Trading groups orders together by side and symbol until each Window Trade deadline. After these deadlines — which Folio states occur one or more times daily — orders are executed and processed. You can only place one order per folio in any given Window Trade.
|Commission fees||$4 per window trade per security||Includes 2,000 commission-free trades twice daily trading windows monthly, $0.50 per additional window trade per security|
|Special orders||$10 market, limit, stop and stop-limit orders||$3 market, limit, stop and stop-limit orders|
|Subscription fee||$15 quarterly for investors with funded accounts holding tradable securities who have executed three or fewer trades in the preceding quarte||$29 monthly or $290 annually|
|Partial account transfer||$5 per security ($25 minimum, $75 maximum)||$5 per security ($25 minimum, $75 maximum)|
|Full account transfer||$100 per account||$100 per account|
|Broker-assisted trades||$45 per trade or transfer request||$45 per trade or transfer request|
|IRA custodial fees||$25 annually||$25 annually|
Is Folio Investing legit?
Folio Investing was founded in 2000 and is headquartered in McLean, Virginia. It is an accredited business with the Better Business Bureau (BBB) and has no complaints on the Consumer Financial Protection Bureau.
Folio Investments is a registered broker-dealer and member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). Cash balances are FDIC-insured and extended insurance of up to $4.5 million for individual accounts and up to $9 million for joint accounts is available.
Folio Investing reviews and complaints
Overall, Folio Investing feedback is fairly negative. As of October 2020, it’s an accredited business with the BBB, but receives an average rating of 1 out of 5 stars from a total of 10 customer reviews. It also has 34 official BBB complaints. On the BBB, Folio investors warn of slow-to-respond customer service and high ongoing fees. Most BBB complaints come from Motif customers acquired by Folio who experienced difficulty accessing and transferring their assets.
Reddit feedback on the investment platform is also unfavorable. While a few Redditors mention Folio’s fee structure may be advantageous for investors with large portfolios, there are numerous complaints of the platform’s clunky user interface, poor customer service and high fees.
Folio’s mobile app also misses the mark, scoring 1.2 out of 5 stars after 85 ratings on Google Play and 1.1 out of 5 after 107 ratings in the Apple App Store. Investors complain of login loops, app crashes and an outdated interface.
Pros and cons
- Account variety. There’s no shortage of accounts to select from, including individual, joint, custodial and a lineup of business accounts and IRAs.
- Prepackaged investments. Folios are prepackaged investments of up to 100 stocks, mutual funds and ETFs. Select from over 160 Ready-to-Go folios or customize your own.
- Fractional shares. Diversify your portfolio by investing in fractional shares.
- Tax-loss harvesting. Take advantage of tax-loss harvesting by letting Folio identify securities to sell to generate gains or offset losses.
- High fees. Unlike many of its competitors, Folio Investing still charges commissions on trades and ongoing monthly fees may eat into your bottom line.
- Limited securities. Investors interested in options, futures, bonds, forex or cryptocurrency will need to look elsewhere.
- Negative feedback. Folio Investing receives poor feedback on the BBB, Reddit, Google Play and the Apple App Store.
How do I sign up?
As of October 2020, Folio Investing is not accepting new investors due to its recent acquisition by Goldman Sachs.
How do I contact Folio Investing support?
There are three ways to reach out to Folio Investing support:
- Phone. Folio support is available toll-free at 888-973-7890 or internationally at 703-245-5772 weekdays from 7 a.m. to 9 p.m. and weekends from 8 a.m. to 4 p.m. ET.
- Email. Fill out a secure online form on Folio’s website or shoot an email to firstname.lastname@example.org.
- Mail. Send hand-written queries to Folio Investing, 8180 Greensboro Drive, 8th Floor, McLean, VA 22102.
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*Signup bonus information updated weekly.
Folio Investing offers prepackaged and customizable investment baskets with no investment minimums and tax-loss harvesting options. But ongoing fees may eat into potential profits and investors warn of unresponsive customer service.
Explore your options across multiple trading platforms to find the brokerage best suited to your investment goals.