Twine Review – Designed for the New Investor and Couples
The Twine robo-advisor cuts through the digital landscape with a clean interface and easy-to-invest approach. The Twine app is John Hancock’s savings and investment tool, designed to help couples and with shared goals and new investors alike. With over 150 years under its belt, John Hancock is here to help the newbie dive into the investing and money management pool. And, they make it simple!
Designed for the new investor, the Twine app is built for investing, money management, and savings goals.
What is Twine?
The Twine app markets itself as a collaborative saving and investing tool. As more millennial couples opt not to have joint financial accounts, there is an increasing need for financial tools that allow these otherwise independent couples to save for joint expenses and build wealth together.
Twine answers that need.
Using Twine, couples—or any two people, committed romantically or not—can collaboratively fund a financial goal using their individual bank accounts. This is perfect for partners saving for a down payment, friends preparing for a shared vacation, or siblings gearing up to throw mom and dad a big anniversary bash.
There are two overarching account types available to Twine users: savings accounts, which offer higher interest rates than most brick-and-mortar bank accounts, and investment portfolios, which are customized based on your risk tolerance and target date.
For shorter term goals – between one and five years – go with the savings account as investment accounts can drop in value.
Twine Robo-Advisor – Features at a Glance
|Overview||Automated investment management robo-advisor platform for new investors|
|Minimum Investment Amount||$5 minimum for cash account. $100 balance required for investment accounts.|
|Fee Structure||No fees for the savings account; additional services, such as wire transfers, may be charged.|
Investment account charges 0.6% AUM (25 cents per $500 managed, assessed monthly)
|Top Features||Made for easy investing with alone or with a partner. Twine offers a variety of bond ETFs as well as U.S. and international stock funds.|
|Free Services||Basic savings account.|
|Contact & Investing Advice||Support team is available by email. Phone service available Monday-Friday from 9:00 am to 5:00 pm.|
|Investment Funds||ETFs and mutual funds.|
|Accounts Available||Individual or joint investment brokerage and savings accounts.|
How Does Twine Work?
First, Twine learns about your financial situation and your goals. If you open a savings account, which Twine refers to as a “cash account,” you will be given the opportunity to set up funding accounts for yourself or a partner. At that point, your account will begin collecting interest (0.63% APY variable, as of January 27, 2020). These accounts are FDIC insured.
If you are going to open an investment account, Twine will gather additional information from you.
The first step for investment accounts is determining how much risk you’re comfortable with. “Risk” in investing refers to how much of a drop in value you can stand before going off the deep end and selling all of your investment funds.
Finally, the Twine robo-advisor designs an investment portfolio that fits with your goals, risk tolerance, and timeline. Your target date is important to these recommendations. If, for example, you have a 20-year goal, Twine will recommend a more aggressive portfolio. A longer timeline means you have more opportunity for growth—and more time to offset a loss. As your target date approaches, Twine adjusts your portfolio to more conservative investments in order to protect your money.
What Differentiates Twine Robo-Advisor From Competitors?
Twine App – Target Market
Twine has two target markets: new investors and couples. Twine targets investors who just getting started through their simple and easy-to-use website. Their educational focus is ideal for newbies, and their FAQ answers many basic questions about investing in addition to general questions about the robo-advisor.
Twine’s more prominent target market, however, is couples. Their website promotes collaboration and their example investments showcase shared funding from multiple people.
Twine App – Investment Management
Your money is managed by a John Hancock investment management team. Their expertise includes managing over $100 billion globally. As a robo-advisor, the Twine app provides automated investment advice— human support is available for basic troubleshooting, but not for direct financial advice.
Twine App – Paired Investing
If you’re saving for a vacation with a friend or with your spouse for a new car, Twine lets you easily set up an account for joint saving and investing. With the ability to set multiple goals, you can invest with a partner for one goa, and on your own for another.
Twine App – Free Cash Saving
If a goal is around the corner, it’s best to keep the money in cash instead of the more volatile stock and bond markets. Twine doesn’t charge any fees on your cash and offers a competitive interest rate—0.63% APY at the time of this writing.
Who Benefits from the Twine Robo-Advisor?
New investors who are just getting started are eased into the complex investment world with a simple platform and ready answers to most investing questions. Twine’s educational FAQs are written in accessible language—no unexplained financial jargon here!
If you’re looking for a way to save and invest together with a partner, friend, or family member, Twine is designed to do just that. Their joint savings account option makes it easy for two people to fund a single goal.
Twine Investing – Robo-Advisor Drill Down
Twine is a money investment manager for those just getting started or for couples who keep most of their finances separate but want to collaboratively save toward a common goal. For short-term goals or emergency funds, Twine’s cash account is a good option.
If you choose to invest in Twine’s portfolio options, you will be given quick robo-advisor questions to help determine your asset allocation or percentages invested in cash, bond funds or stock funds.
From there, Twine will suggest either a conservative, moderate or aggressive investment portfolio.
Twine Conservative Portfolios:
The conservative portfolio is created to keep capital losses to a minimum. Conservative accounts are typically invested in greater amounts of cash and fixed bond funds. The conservative portfolios generate more stable yearly returns.
Over time, a conservative portfolio will likely offer a lower return, with less volatility than a more aggressive one.
If you’re within five years of your goal, then a conservative portfolio is right for you. It will hold roughly 94% or more in cash and bond funds. This portfolio only owns 6% stock funds.
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A conservative portfolio might be appropriate if you can answer yes to the following questions:
- My household liquid net worth or annual income is <$50K.
• I am extremely cautious towards financial risk.
• I have no or limited investing experience.
Twine Moderate Portfolios:
A moderate portfolio is great if you have at least 10 to 15 years until your goal. This portfolio is for investors who can stomach some volatility or ups and downs in their annual returns. In exchange for a greater percentage of stock funds, moderate investors might experience higher returns than conservative investors.
A moderate portfolio consists of 55 to 70% stock ETFs, with higher stock percentages for years farther from goals. The remainder is invested in bond and money market (cash) funds.
Twine Aggressive Portfolios:
Aggressive portfolios hold a greater proportion of stock funds and lesser amounts of bond funds and cash. If your goals are 15+ years away, you are younger, and you are comfortable with your investment values bouncing around a bit, then an aggressive portfolio might be right for you.
On average, an aggressive portfolio consists of roughly 80% stock ETFs with the remainder in bond and money market funds.
According to the Twine website, “Aggressive portfolios annual returns may be somewhat more volatile than those in Twine ‘conservative’ or ‘moderate’ portfolios but are still likely to be far less volatile than annual returns in most broad equity market investment funds.”
If you agree with these statements, then an aggressive portfolio might suit you:
- My household liquid net worth OR annual income is >$200K.
• I am a high financial risk taker.
• I have extensive investing experience.
Twine carefully lowers the allocation of riskier stock funds as the investor gets closer to his or her goal. In general, Twine’s investment portfolios are more conservatively structured than many other robo-advisors.
Signing Up for Twine
In order to sign up for Twine you must be over the age of 18 and be either a US citizen or a U.S. resident alien.
You can sign up on the web or on an app-based device like a phone or tablet. Currently the Twine app is only available for iOs; there are plans for a future Android app, but current Android users will need to use the desktop site.
Before you are able to create your account, you will need to provide bank funding information. After your banking details are set, you will be able to create a goal and will have the option to invite a partner to contribute to the goal.
At this point, you will be prompted to choose your goals. You might be looking to save for a vacation, a house, or educational expenses. No matter what you choose, don’t worry—you can set up multiple goals for yourself or for you and a partner.
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As you set up your account, you will be prompted to decide a few things:
- Whether you will be saving alone or in collaboration with another person.
- Whether you are opening a cash account or investing.
- The target amount for your goal, including how much you’ll invest (or save) monthly and your partner’s monthly contribution.
- Your goal(s).
Unlike some robo-advisors, Twine requires your banking information before you can experiment with their tools. This means that you will need to be nearly ready to commit before you can play with their goal-setting features—an unfortunate feature that makes Twine less transparent than some competitors.
Twine Management Fees and Investment Minimums
You can open a savings account with a minimum of $5. As soon as your balance hits $100, you’re able to begin investing.
If you prefer to keep your account in cash you’ll receive interest payments and won’t be charged account management fees.
The annual fee for investment accounts is 0.60% of the average daily balance, charged monthly, at the end of the month. For a monthly balance of $500, you’ll pay $0.25 per month.
According to the Twine website, “Twine’s Program Fee covers investment advice, the ongoing management of the Program Accounts assets, as well as trade execution, clearance, settlement and custodial services provided by Apex Clearing Corporation. The Program Fee does not cover the expenses of the ETFs in which we invest your balance, including commission and other transaction-related charges ETFs incur.”
Is the Twine App Safe?
If you’re wondering if your data is safe at Twine, here’s the company response:
At Twine, we take your security and privacy extremely seriously. Any information you enter or use in the app is protected and encrypted using industry-leading capabilities. We employ leading security firms to conduct regular analysis of our engineering systems and have a strict security program and set of controls in place. Rest assured, we won’t share your information with any unrelated third party for their own marketing purposes.
The cash in your Twine app savings account is insured by the FDIC or Federal Deposit Insurance Corporation which insures your savings against a loss of up to $250,000.
The money invested in the Twine app robo-advisor may go up or down in value, as is the case with all investments in stock and bond funds.
Twine Review: Pros and Cons
- Twine is simple to use.
- Couples can contribute to joint financial goals while still maintaining separate financial accounts.
- Twine offers accessible investing educational content.
- The cash option is great for emergencies and short-term goals.
- Twine’s conservative glidepath (asset allocation percentages in relation to time until goal) is less risky than competitors’ and suitable for new and cautious investors.
- Twine’s investment management fee is on the high end of comparable robo-advisors. M1 Finance offers their services for free. Betterment and Wealthfront charge only 0.25%, less than half of Twine’s fee.
- Twine lacks the opportunity to open retirement accounts, trust accounts or various accounts other than individual and joint brokerage accounts.
- The Twine app is only available on iOS at this time; Android users will need to use the web version, which has fewer features than the iOS app.
- No tax-loss harvesting.
- The Twine investment funds aren’t listed on the website, which is a disadvantage for investors who want to know what their investing in, before signing up. Without investment fund information, there’s no way to understand the expense ratios of the investment funds.
Twine Robo-Advisor Review Wrap Up
In our original Twine app review, the individual investment funds were readily available. The inaccessibility of this information colors my view of the Twine app investment manager robo-advisor. That said, new investors who are looking for an easy way to start investing and saving – with a partner, might consider Twine. Specifically, if you want to save for a specific goal with a friend or partner, Twine works. Our main reservation is the fee. There are other robo-advisors with lower fee structures. Additionally, if you are seeking greater diversification, there are other digital investment advisors offering access to more funds with greater diversification.
Visit the Robo Advisor Selection Wizard for a quick way to choose the best investment manager for you.
the original article can be found at https://www.roboadvisorpros.com/twine-robo-advisor-review/