Technology Update

Motif provides investors with investment themes, advisers should take note too

& Schwab Advisor Services holds its first Tech Talk audio conference

Jun 10, 2012 @ 12:01 am

By Davis Janowski

Let's say you or a client want to capitalize on a broad-based societal or business trend — say, green technology — by investing in stocks that somehow are benefiting from the trend or theme.

You can look for an appropriate mutual fund or ETF, but finding one that tracks the emerging trend can be iffy.

Enter Motif Investing, a startup designed to match investors with developing investment opportunities. It emerged from beta last week, and is targeting investors and financial advisers.

Unlike most startups, Motif has a full staff, some significant firepower on its board and a former Microsoft Corp. executive with tech experience at the helm.

Sallie Krawcheck, former president of Bank of America Global Wealth and Investment Management, is a director, and former Securities and Exchange Commission Chairman Arthur S. Levitt is an adviser to the board.

“We are launching the first trading that is social,” said Hardeep Walia, Motif's chief executive and co-founder.

“We are taking what investors do naturally and taking it online,” he said, referring to the informal process of discussing a potential stock purchase or other investment among friends, family and colleagues prior to following through. “Keep in mind, though, it is the idea — not just the stock.”

In a nutshell, a “motif” is a thematically weighted, index-based portfolio. For each of a passel of preset themes or motifs, the company has identified key companies in which to invest.

Let's use mobile Internet as an example of an investment theme or motif, as Mr. Walia did for me. Mobile Internet is a growing area; according to the February Visual Networking Index, calculated by Cisco Systems Inc., global mobile data traffic is forecasted to increase 18-fold between 2011 and 2016.

A tech-savvy client interested in this sector might have in mind investments in the companies that erect cell towers, develop mobile application software and spread the wireless spectrum into new areas.

Unfortunately, mutual funds and exchange-traded funds aren't providing advisers with the stocks that clients are seeking in this area.

By starting with the online catalog available at Motif, advisers can explore the mobile Internet theme, and others, by category or industry.

Advisers can customize any of the motifs they find and make them their own by adding or deleting stocks, and even changing weights. They also can create watch lists and save any motifs they like, including those that they have customized, and track their performance.

To get started looking at the various motifs, all a user has to do is provide a name and e-mail address.

Users who want to trade motifs must open and fund a brokerage account, much as at any other online brokerage firm.

The account minimum is $1,000, and there is a $250 investment minimum per motif. Trades cost $9.95 apiece, though new users can trade free through the end of June.

I suspect that advisers will be most interested in Motif from a research perspective. The interface is attractive, and there is plenty of humor to be found in the names and construction of the motifs.

And advisers may enjoy how Motif shakes up their thinking.

For more information visit Motif Investing online.

(BTW, I especially like the Motif Investing overview pages; don't be put off by how slick these are, they are after all targeting an investor audience. Despite how unique its methodology is Motif is vying for attention against probably two dozen websites out there that inhabit the same general “online investing” category).


Last week was the first time Tech Talk was hosted by the folks at Schwab Advisor Services.

Despite a glitch with incoming questions during the Q&A session, and in spite of a sore throat, Neesha Hathi, senior vice president of technology solutions, successfully took a select group of listeners through several updates on Schwab's tech developments for registered investment advisers.


The most interesting news was that Schwab will roll out an iPhone app for advisers this month. (I originally had iPad, sorry if I got folks hopes up, and sorry for the error in my hearing).

Second was the announcement that 28 more universal work flows will be available in the SAS workflow library this month.

That might not seem tremendously interesting, in and of itself. But for advisers who use the Junxure (from CRM Software Inc.) or customer relationship management applications, work flows can be your best friend.

The first five work flows became available in February, and more than 250 firms are using them.

Suffice it to say that work flows — think of them as sort of online CRM wizards for completing tasks — can have a big impact on efficiency and ensure that processes such as account opening are completed in a predictable and uniform way.

Finally, since I have been keeping a scoreboard of who is using what, I found it interesting to hear that SAS has sold 20 units of its turnkey Integrated Office platform. That offering, with a customized version of Salesforce at its core, has been purchased by firms ranging from those with just a few million dollars in assets under management up to at least one with $600 million, according to Ms. Hathi.

About 250 firms use Schwab's OpenView Gateway platform. Gateway offers a choice in CRM, and this batch is split fairly evenly between Junxure and Salesforce.

If you find all of this Gateway and Integrated Office stuff a lot of mumbo jumbo, and want more perspective, see the links below to my past coverage. or on Twitter @ddjanowski


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