Motif Investing is quietly growing its arsenal of institutional investors (Goldman Sachs invested recently in Motif), an A-list board of investors (former SEC chief Arthur Levitt joined recently), awards (best of show at Finovate), and its share of innovative new products.
Though CEO Hardeep Walla as much hinted at this possibility when I interviewed him for my podcast, Motif Investing introduced today a way for investors to make money from their ideas.
Called the Creator Royalty Program, this new product enourages investors to create their own portfolios (called, motifs) and pays them when another investor invests in their motif.
According to the WSJ:
“Under a “Creator Royalty Program” that Motif is set to announce Thursday, people who craft their own motifs can collect $1 for each person who subsequently invests in it. A user who creates a housing-market motif, for example, also would collect royalty payments when other users personalize the motif to add a little more Home Depot stock, and a little less weighting on mortgage brokers.
“Our idea is to let people monetize their ideas,” said Motif Co-Founder and CEO Hardeep Walia.”
This can clearly attract attention beyond individual investors. I know investment advisors are beginning to find value in the thematic investing service and its 1-click, low price portfolio building. But affinity groups could begin to brand portfolios that represent their interests. Not only does Motif Investing encourage investors to share their ideas, it compensates them for doing so.
Other online platforms that pay investors for ideas
Motif isn’t the only place investors can go to make money off their stock ideas. In an earlier post, I addressed this potential revenue model versus starting a hedge fund. Here are just a few ways people can get paid for their investment ideas:
- Seeking Alpha’s Premium Program: Seeking Alpha has been building a content warchest over the years and has upped the ante with a program that pays contributors a share of the ad revenue generated by their articles.
- Collective2: Collective2 (see my interview with the founder) is a marketplace of investment strategies. Individuals can create and trade a portfolio and investors can auto-trade those strategies they find interesting. System creators get paid a subscription fee when that occurs. (Check out my system: the Tradestreaming Hedge Fund Guru Strategy, up almost 70% over 2 years).
- Zignals: Zignals is very similar to Collective2 but if Collective2 has the user interface of Craigslist, Zignals is more like Microsoft. And that’s partly because Zignals is built on MSFT’s Silverlight technology. The sleek site has a lot more tools for designing portfolio: charts, alerts, screeners, etc.
- Currensee and etoro: These next generation forex trading sites both allow talented traders to open up their activity to others to follow. In return, they make money by doing this. If you have a good track record, you can make some serious change as you can also profit as part of a carry — if you’re profitable in your trading strategies, you can make a percentage of the money you make your followers.
- Start your own investment newsletter: This isn’t as turn-key revenue as some of the other options but certainly viable. It’s as easy a building a small website, sending periodic emails, and collecting a subscription payment.
Did I miss any?
Anyway, Motif is doing great things and building an investment platform that combines the low-cost do-it-yourself ethos with the interactivity and transparency of social. And now, the incentives to build, share, and profit from investment ideas just feels right…like Motif is headed in the right direction.
(If you’re interested, I composed this beginner’s guide to Motif Investing a while back.)