Magnifi Review: Innovative AI Investing Assistant, Hefty Price

If you've been waiting for ChatGPT to make its way into investment platforms, Magnifi may have an offer for you. Magnifi combines elements of a traditional brokerage -- like the ability to trade investments -- with an AI assistant that can field basic questions and give you some insights into your investment portfolio. It's a neat innovation, but the AI assistant isn't exactly robust and may not be worth the high subscription fee. Below, we'll take a deep dive into Magnifi and see if it's right for you.

While Magnifi has the potential to revolutionize how we research and choose our investments, it has a few kinks to work out before it can reach a Warren Buffett level. Let's look at what it has to offer.

What is Magnifi and how does it work?

Magnifi is an investing platform and mobile app. On one level, it's similar to a traditional online brokerage in that you can create an investment portfolio and trade stocks and funds. On another level, Magnifi is something different in that it has an AI assistant whose eye is on your investment portfolio and can tell you how it's performing, if it's diversified, and how much risk you're taking.

When you create your account, Magnifi will prompt you to link other investment accounts via Plaid. Doing so will give the AI assistant a comprehensive view of what you're investing in. Note: At the time of writing this, Magnifi isn't compatible with Fidelity. It's an issue Magnifi is aware of and is seeking to resolve.

^{Image source: Magnifi. Introductory chat with AI assistant.}

Once you've connected your investment accounts, the AI assistant can run an overall "health check." This involves comparing your portfolio to a benchmark index -- the default is the S&P 500 -- and analyzing based on performance, volatility, and diversification. Once the AI assistant has finished the health check, you can analyze these three categories further for more insight.

^{Image source: Magnifi. Volatility of current portfolio is shown, compared to S&P 500.}

In addition to this, you can run stress tests that will tell you how your portfolio would likely perform under various scenarios. For example, it can tell you how an increase in oil prices might affect your holding or what might happen if the 10-year treasury rate increased.

^{Image source: Magnifi. Options shown for various stress-test scenarios.}

Finally, the AI assistant can look at other parts of your financial life, too. For example, it can tell you if you're on track to buy a house or if you'll have enough for retirement.

^{Image source: Magnifi. Projected growth towards and chances of achieving specific goals.}

Outside of the AI assistant, Magnifi has other tricks, too, like the ability to filter investments by themes and the data to compare stocks. These features aren't unique to Magnifi -- plenty of online brokers offer similar perks -- but, when combined with the AI assistant, you can analyze stocks and access research fairly quickly.

Top perks

AI-driven insights

Arguably, Magnifi's biggest sale is its AI assistant. Much like ChatGPT, the AI assistant combines human-like writing with data from reputable sources like Morningstar. It can answer customized questions about investing -- such as, "What is a value stock?" -- or you can use Magnifi's preset questions.

The AI assistant can also analyze your portfolio, help you diversify your holdings, and monitor your investments. For example, if you were concerned that a rise in interest rates would affect your portfolio, the AI assistant could run a custom analysis and help you visualize the risks. Likewise, if you wanted to invest in one of several stocks, the assistant could compare them based on various parameters, like volatility, returns, and price-to-earnings (P/E) ratios, among others.

Super easy to use

Magnifi's user interface is simple, straightforward, and doesn't overwhelm you with links, tools, or products. Finding investments is as simple as typing a name, ticker, or theme (like green energy) in the search bar. When you find something you like, you can add it to your cart or analyze it using the AI assistant.

Link multiple investing accounts

Magnifi lets you connect accounts from multiple brokerages and monitor them in one centralized hub. Better yet, the AI assistant can analyze all these accounts at once and give you more holistic advice.

Free week trial

Magnifi will let you try its platform at no charge.

What could be improved

AI assistant needs a lot of work

The AI assistant is intriguing but, on the whole, it's underdeveloped. While it could analyze my portfolio for certain preset categories, it wasn't versatile, didn't answer all my questions, couldn't give me a clear path forward, and, all in all, wasn't as intelligent as I was hoping.

For example, after discovering that my portfolio wasn't properly diversified, I asked what market sectors I should invest in to bring greater diversification. It recommended that I invest in bonds.

^{Image source: Magnifi. Recommends bonds to diversify portfolio.}

To be fair, bonds are an excellent way to bring diversification to a portfolio that is overexposed to equities. But that's not what I asked. I wanted to know what market sectors -- like consumer discretionary, real estate, industrials -- would bring greater diversification. I tried to clarify by asking it to recommend stocks and ETFs. Again, it recommended bonds.

^{Image source: Magnifi. Again recommends bonds, even after question clarification.}

This kind of circularity -- in which I was given the same answer ad nauseam -- was something I encountered in different scenarios. When I followed Magnifi's preset cues, the bot performed decently. But when I went off script, it couldn't comprehend what I was asking and kept repeating answers that weren't helpful. Here are some other examples where the assistant appeared to malfunction.

^{Image source: Magnifi. Various examples of AI bot malfunction/misunderstanding.}

This is a new piece of technology, so I don't expect it to perform without some kinks. But it had a ton of bugs, and the AI assistant's advising limits were rather shallow. I was hoping for more actionable advice and guidance tailored to my values, investing philosophy, and portfolio, not a patchwork of preset answers.

No robo-advising capabilities

If you're looking to set your portfolio on auto-pilot, you'll need to look elsewhere, as Magnifi doesn't offer robo-advising.

Monthly subscription fee is high

Paying $11 to $14 for an AI assistant is super high, especially since it has so many bugs and limited capabilities. For comparison, some of the best robo-advising platforms charge flat fees of $1 to $5 monthly.

No retirement accounts

You can only open taxable brokerage accounts at Magnifi. While you can certainly link retirement accounts like 401(k)s and IRAs to Magnifi, you can't open them through the investing platform at this time.

Not all brokerage accounts can be linked

For example, I couldn't link my Fidelity account. Although many brokerages are represented -- such as Vanguard and Charles Schwab -- it appears some are missing.

Strict good faith violation consequences

A good faith violation happens when you buy a stock with unsettled funds then sell it before the funds have had time to settle. Most brokerages will restrict your account if you have a certain number of good faith violations within a 12-month period. Magnifi, however, goes further than this and will close your account if you have five in a rolling 12-month period.

How much does Magnifi cost?

Magnifi costs $14 monthly when you agree to a monthly billing, or $11 monthly when you pay for an annual subscription.

• You're new to investing and would like extra help getting started.
• You don't want to try your hand at advanced investing strategies, like options trading.
• You don't mind paying a high monthly fee to get help from an AI assistant.

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