Motley Fool expanding its wealth management division

'Fools' gain free comprehensive financial planning services with annual subscriptions

Jul 8, 2014 @ 12:01 am

By Liz Skinner

Online investment platform, Michael Kitces, Charles Schwab, Fidelity, TD Ameritrade, robo-adviser
+ Zoom

The Motley Fool plans to expand its fledgling wealth management division and is hiring as many as 10 more financial advisers over the next couple of years.

The firm, created as an investment advice newsletter 21 years ago by brothers David and Tom Gardner, is now offering more comprehensive financial planning and recently hired its fourth adviser, said Nick Crow, president of Motley Fool Wealth Management.

Motley Fool jumped into the financial planning business in February 2013 with an online advising tool for members that generated stock recommendations based on an analysis of their holdings and their risk profiles. A single adviser at that time was available to answer questions about the advice.

The unit, known as Motley Fool Financial Planning until March 2014 when it was renamed Motley Fool Wealth Management, has about $130 million in assets under management and recently expanded its advising services to offer comprehensive financial plans, including non-equity financial advice.

The firm regularly updates its advice on the clients' investment dashboard, according to the company's June 30, 2014, ADV form filed with the Securities and Exchange Commission.

In addition to reviewing clients' online questionnaire inputs and advising on possible investment changes, the advisers will help the client determine which model portfolio managed account program to follow and be available to answer specific questions about financial goals and investment suitability, Mr. Crow said.

“We are looking for the very best planners out there to help in our vision of wanting to help the world invest better,” he said. “This portion of our business is relatively new and growing and the scope of our services is also growing.”

The financial planning services are available to subscribers to Fool One who pay a single fee and receive access to all the Motley Fool newsletters and other advice content. The company doesn't publish its prices for this service online, but a Motley Fool review site in March 2014 cited the prices at about $7,500 for a one-year subscription or as low as $2,500 a year with a five-year subscription commitment. Motley Fool would not confirm its pricing because it changes.

There is no separate fee for Fool One members to sign up as a wealth management client and there is no way to buy just the Motley Fool financial adviser services, Mr. Crow said.

In addition to its newsletters and wealth management units, Motley Fool has an asset management branch that sells mutual funds and isn't part of the Fool One subscription service.

Michael Kitces, partner and director of research at Pinnacle Advisory Group, said while Motley Fool is delivering financial advice online, it shouldn't be thought of as a direct competitor to the crop of so-called robo-advisers that have emerged in the past few years.

Motley Fool subscribers are fundamentally different than those who might sign up with an online-adviser platform, even one like Personal Capital that comes with some live financial advice. The Motley Fool offering most directly competes with investment platforms from companies such Charles Schwab & Co. Inc., Fidelity Investments or TD Ameritrade Inc., he said.

“The Motley Fool subscriber base tends to be a primarily investment-picker, do-it-yourself crowd,” Mr. Kitces said.

Motley Fool's added financial planning enhancements simply “bolster their value proposition” as an investment newsletter service and do-it-yourself platform, he said.

Mr. Crow said skilled financial advisers who may be poor salespeople would be a great fit at Motley Fool Wealth Management, because they will not be selling any products or services.

Motley Fool, whose name derived from Shakespeare's comedy “As You Like It,” recently won national recognition as the best medium-sized company to work for by Glassdoor.com.

The open adviser positions for now will all be in the Alexandria, Va., office.

An earlier version of this story misstated the name of TD Ameritrade Inc.

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