Liftoff, created by Barry Ritholtz and Josh Brown of Ritholz Wealth Management, is an automated investing platform that aims to provide relatively low-cost portfolio management. The service charges a 0.40% annual management fee and requires a minimum balance of $5,000. The robo-advisor prides itself on hewing to a strict fiduciary standard as a registered investment advisory (RIA) firm and uses Upside technology on the back-end of its digital platform. With the ability to invest in a wide variety of exchange-traded funds (ETFs), Liftoff takes stock of your risk tolerance and financial goals to create a diversified portfolio for your needs.
Investors with more than $5,000; Those who don't need to work with human advisors; Investors who want a trustworthy advisor service that follows a fiduciary standard
Though investors can have their questions answers by the Ritholz Wealth Management team behind the robo-advisor, Liftoff does not stress human advisor access or interaction.
Pricing: How Much Does Liftoff Cost?
|Option Name||Management Fee||Minimum Balance||Features|
|Liftoff||0.40% annually||$5,000 opening balance||Individualized portfolio, automatic rebalancing and management, expert advice|
To open a Liftoff account and start the investment process, you will need to deposit at least $5,000. During the application process, you will be asked to write in your estimated monthly contribution. Of course, you can change this amount at any time, but keep in mind that the amount you provide helps determine your investment portfolio's make-up and projected returns.
Employing Liftoff’s services will cost an annual management fee of 0.40%. This fee is charged quarterly, so each quarter you will see 0.10% deducted from your account.
Liftoff's Investing Strategy
Liftoff’s goal is to act as an impartial investor when it comes to managing your portfolio. In terms of investing strategy, two of the company’s “central tenets” are portfolio construction and risk management. This means that Liftoff’s advisors and algorithms take stock of the client’s goals and risk management to create the best possible portfolio for the long-term. Individual investors tend to make moves according to changes in the market, often potentially hurting their investments. Liftoff removes that volatility from investing, ensuring a client’s portfolio remains stable throughout the many changes in the market.
In terms of your portfolio’s assets, Liftoff mainly employs ETFs. This allows your investments to include a wide swath of the market rather than just a few individual companies. Investing in a wider array of the markets helps you mitigate your downside. So if one specific market sees a drop-off, your entire portfolio won’t collapse because of your balanced mix of investments.
You can also trust in Liftoff to act in your best interest. Liftoff and Ritholtz Wealth Management are held to a fiduciary standard as they are a registered investment advisory firm (RIA). Acting as a fiduciary means they are bound to make decisions that are best for their clients and not for themselves. You pay for the services you receive from Liftoff, and in return, Liftoff promises not to compromise its integrity by making recommendations based on its own potential for financial gain.
- Traditional IRA
- Roth IRA
- 401(k) rollover
- Individual brokerage account
- Joint brokerage account
- 529 college savings
Liftoff has a relatively high minimum balance. This limits potential investors with lower available capital from accessing Liftoff’s services. If you do qualify for Liftoff, you gain access to regular expert advice from Ritholtz Wealth Management experts. These experts help with the management of your individualized, low-cost portfolio. That way, you can ensure your portfolio stays updated according to changes in the market and in your own goals.
Once you’re working with Liftoff and its experts, you’ll have access to a convenient online dashboard to check on and manage your accounts. There, you can see how your accounts are performing and manage settings like notifications and savings goals.
Liftoff automatically rebalances your portfolio. But you will be able to reach Ritholtz advisors should you need to speak to an human being about your investments. Plus, Liftoff seeks not only to create the most personalized portfolio for its clients, but also to educate each client about personal finance. That way clients can go on to make more educated financial decisions in other financial aspects.
Who Liftoff Is For
As the robo-advisor arm of Ritholtz Wealth Management, Liftoff is geared toward wealthier clients just like its parent company is. For those who can meet the $5,000 minimum, Liftoff provides a less-expensive portfolio management option.
If you fall into this category, Liftoff could be the right choice for you. This is especially true if you tend to let your emotions get in the way of logical and calculated investing. Liftoff works to optimize your assets without letting personal preferences and knee-jerk reactions get in the way.
It’s often noted that Liftoff targets younger investors, like the children of Ritholtz clients. However, Liftoff is available to investors of all ages who cannot make the higher minimum that Ritholtz Wealth Management requires. Liftoff seeks to help these clients with their various investment plans, financial goals, estate planning and more. The ultimate objective is to the need for more complex portfolio planning management through the growth you see with Liftoff.
- Portfolios built based on your needs
- Rebalancing done automatically
- Constant portfolio performance reports
- Direct human advisor relationships
How Liftoff Works
Once you’re ready to open a Liftoff account, you’ll first have to provide your name, email address and age. Then you’ll be led through a short series of options to determine your risk score. This helps Liftoff get a better look at the kinds of investment risk you’re willing to take on. Once you receive your risk number, you can move on to creating your tailored investment plan.
You are given a choice between saving for retirement and simply growing your wealth. You’ll input your estimated monthly contribution to the account, and your goal retirement age to tailor your plan further. Liftoff will then show you a breakdown of your potential portfolio. This includes their mix of stocks in percentages and dollar amounts.
Throughout this process, you can adjust your goals and risk numbers to make a portfolio that feels best to you. Then you can choose between importing an existing portfolio or starting a new one. Once you’re confident with the end result, you can click “Open Account.” If you’re not quite ready to commit to opening an account, you also have the option of indicating you’d like to speak with a financial advisor beforehand. An advisor will then reach out to you.
What's the Catch?
For starters, you can’t open a Liftoff account if you don’t have at least $5,000 to spare. What’s more, Liftoff may not be the right choice for you if you would like more human interaction with your portfolio management and advice. As a robo-advisor, Liftoff performs its management and rebalancing automatically. You do have the option of calling Ritholtz with any questions you may have, but you won’t automatically have access to a personal advisor for comprehensive and specific advice.
Competition: How Liftoff Stacks Up?
Liftoff is certainly not necessarily for the beginning investor. Its high minimum of $5,000 rules out many potential investors who can’t meet that minimum. Instead, those investors should work with a robo-advisor with a smaller minimum, if one at all. Its annual 0.40% fee is slightly higher than average in the robo-advisor spectrum (although robo-advisor Fundrise is considerably more expensive with a 1% management fee). Liftoff does maintain that its goal is to elevate its clients to even higher levels so that they can afford more comprehensive and complex portfolio management services.
Liftoff’s nearest competitor would be Fidelity Go, the robo-advisor arm of Fidelity Investments. Fidelity Go also requires a $5,000 minimum opening deposit, counting out any investors without that much to spare. Fidelity Go charges a comparable, but slightly smaller, fee of 0.35%. Like Liftoff, Fidelity Go lacks direct human advisement, instead relying on automatic rebalancing. However, Fidelity Go’s website does offer a more comprehensive look at what the company can offer like monthly progress reports and goal target tracking.
If Liftoff’s annual fee doesn’t bother you, but you just don’t have $5,000 to invest right now, you can look into Wealthsimple. There is no minimum opening deposit with Wealthsimple, a robo-advisor that seeks to make investing easier for its clients. Depending on the level of portfolio management you’d like, Wealthsimple will cost either 0.40% or 0.50%. However, that fee is waived for your first $5,000. Wealthsimple also provides easy access to human advisors, unlike Liftoff and many other robo-advisors.
|Robo Advisor||Management Fee||Minimum Balance||Human Advisors|
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Bottom Line: Should You Use Liftoff?
In the robo-advisor world, Liftoff provides basic portfolio management services at a reasonable cost that is only slightly north of average. Its 0.40% annual management fee isn’t the highest, but it isn’t the lowest either. This fee, paired with its minimum deposit of $5,000 some consumers from investing with Liftoff.
However, if you’re able to meet the minimum and can handle the management fee, Liftoff does offer financial experts, an investment committee, automated rebalancing and more. While Liftoff itself does not come with a human advisor, you always have call or email Ritholtz Wealth Management to access advisors. When you sign up for Liftoff, you know it is working in your best interests, especially to get you to higher and more advanced portfolio management tiers.
Tips for Finding an Advisor
- Sometimes, a robo-advisor with occasional human guidance doesn’t quite make the cut. If that’s the case for you, let us help you find a traditional financial advisor. With SmartAdvisor, you’ll take a short quiz and we’ll do the rest. We’ll pair you with three advisors in your area who fit your preferences and financial needs. Then we’ll put you in touch with these advisors to help you find the right one.
- When choosing a financial advisor, keep your goals and needs in mind. Are you putting a child through college while also saving for a new home? Find an advisor who can help you with that. It helps to ask advisors questions about their credentials and experience to better determine whether they’re right for you.