The platform score is a computed score from 0 to 100 for investment platforms. The goal of the platform score is to highlight platforms that demonstrate continued support for helping people invest in the best positions for their situation.
|Access Methods (Web, iOS, Android)||10%|
Minafi Rating – We’ll rank each platform on a scale of 1-5, with 0.5 increments. We’ll multiply that score by 5 to generate the percentage out of a possible 25. This is an overall takeaway of this platform with all things considered. A platform may have very high fees and a high rating if they prove them out. Likewise, a low-cost platform might have a low rating if it’s unusable.
Usability – How easy is this site to use on a scale of 1-10. A site can be amazing with everything perfect, but you never want to login you’re not going to want to invest.
Fees – How much you spend on fees has a massive impact on your long-term investing prospects. Your fees are based on how much you would pay for a diversified portfolio on a $1,000 portfolio, a $50,000 portfolio, a $100,000 portfolio, a $1,000,000 portfolio, and a $5,000,000 portfolio (summed up) each year compared to other platforms of the same type (Roboadvisors vs Roboadvisors, brokerages vs brokerages).
For example, at Vanguard, you would pay a $20 account fee for the $1,000 portfolio, but no account fee after that. You’d pay $0 on Vanguard mutual fund and ETF trades, but would have an average expense ratio of around 0.10%. That gives $21 + $100 + $1,000 = $1,121 in total fees.
We compare that number with other platforms to figure out their “percentile”. If they’re in the 100th percentile, then they have the lowest fees in their category and would get all 25%. If they have the highest fees, they’re in the 0th percentile and would get 0%.
One caveat here: You could pick individual stocks and have a much lower fee. This “diversified portfolio” includes:
- A Total US Stock Market Index Fund.
- A Total International Index Fund.
- A Bond fund for the $100,000 and up portfolios.
For each, I’ll choose the lowest cost index fund that’s either: recommended by the platform, or that I can purchase through their exchange. For the $1,000 and $50,000 levels, I’ll select a Target-Date fund.
If the minimum for investing is less than one of these thresholds, then each other fee tier will be worth more points with the total still adding up to a possible 25%.
Company Age – Would you rather give all of your money to a company that was started yesterday or one that was started in 1982? This percentage compares the type of platform (self-guided, Robo advisor, advisor) with others of the same type for their age. The oldest company gets all 10 points, while the newest company would get 0 points. Companies in the middle get a percentage based on their order.
Access Methods (Web, iOS, Android, API) – 3 points for every platform this that you can access your account on up to a maximum of 10 points.
Shady Factor – Minafi’s score on a scale of 0 (most shady) to 10 (least shady) for this platform. This takes into account what each platform pushes for its users to recommend, the fees charged for these recommendations and an overall take on how much this platform is optimized to take your money.
What is a Good Rating?
Ratings are best compared with other platforms of the same type: Self guided funds, robo advisors and advisors.