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by kurrent 4386 days ago
nice catch.

so is this site just piggybacking and creating custom portfolio's through motif?

2 comments

Motif Investing allows users to create and share motifs. I don't understand why this site was made?
The short version is that is exactly what being a RIA is.

I have no relationship with anyone in this particular chain of companies, although I did work at "big financial corp" a long time ago. It might help to define and provide analogies based on that experience.

So valuedinvesting is a registered investment advisor. The focus of those people is providing advice. They can't buy or sell anything but they can recommend and "help" you do it. Where "help" is in quotes because exactly how much of the work they're legally allowed to do is fuzzy to me and probably fuzzy to them too.

(Edited to add a RIA analogy is they're like an analyst role in tech... or maybe a product manager role. They don't actually write code but they talk to both sides of the fence a lot to theoretically smooth the process along to everyone's best interests, well, theoretically)

http://en.wikipedia.org/wiki/Registered_Investment_Advisor

The guy who actually buys sells stocks is apparently Motif a broker-dealer. How much advice a broker-dealer can provide without also having to register as a RIA is a pretty fuzzy topic. There are plenty of brokers with in-house team of RIA willing to talk to you. Their primary business is being a broker not being an advisor. It is highly unlikely they'll give you advice that does not help the broker side of the house improve its revenue numbers. I'm not claiming the in-house RIA of any brokers currently under discussion are biased, but historically it has happened in other situations. So I wouldn't personally do business with a RIA linked to a broker. (edited to add, in an otherwise factual post, the preceding was strictly my personal opinion and you will hear good opposite arguments) Its like asking your barber how often you should get a haircut, what do you think he's going to say...

(for what its worth I worked for some time at an outsourcing technology provider for broker-dealers and to a lesser extent we provided some services to RIAs)

http://en.wikipedia.org/wiki/Broker-dealer

Motif is in the SIPC which I won't bother linking to but they basically are insurance like FDIC for retail end users. So if everyone goes bankrupt, SIPC will provide you with what you owned before the bankruptcy. Like a general contractor's bonding insurance.

Motif uses (probably?) Apex as a clearing house. A clearing house is like insurance between brokers analogous to how SIPC is insurance between retail investors and the broker.

http://en.wikipedia.org/wiki/Clearing_house_%28finance%29

If you'd like an analogy, its kind of like I paid my roofer to buy materials and install a roof as per his advice. I could have theoretically contacted the shingle manufacturer or his rep directly, at least in theory, and he may even be a licensed contractor. However I'm doing business with "my favorite roofing contractor" specifically.