Starting to invest can feel confusing, with unfamiliar jargon and a lot of options. This article covers what to consider when comparing investing apps and explains how Alinea works. All investing involves risk, including loss of principal.

Why Getting Started Feels Daunting

When comparing investing apps, it helps to consider ease of use, investment options, fees, and educational resources. Some apps offer a wide range of options but can be complex to navigate. Fees can reduce your returns, so it is worth understanding what each app charges.

Choosing investments and building a diversified portfolio can feel difficult. Diversification can reduce the impact of any one investment falling, but it can’t guarantee against loss [1].

How Alinea Works

Alinea Invest, Inc. offers a mobile investing app. Investment advisory services are provided by Alinea Advisory Services LLC, an SEC-registered investment adviser and a wholly owned subsidiary of Alinea Invest, Inc. SEC registration does not imply a certain level of skill or training.

Alinea starts with a questionnaire about your risk tolerance. From there, you can be assigned a model portfolio, explore Investing Playlists, or both, and you can set up recurring investments.

• Model portfolios. Alinea asks about your risk tolerance and assigns you one of four risk-based model portfolios of ETFs by algorithm. Alinea rebalances it monthly. The portfolios are the same for every investor at a given risk level.
• Investing Playlists. Playlists are collections of stocks and ETFs organized around themes or interests. Some Playlists have their weights set by AI on a schedule, with no human review of the changes. Alinea oversees the algorithm and monitors it for anomalies. Themed portfolios may be less diversified and more volatile.
• Recurring investing. You can set a fixed amount to invest on a schedule, an approach known as dollar cost averaging. It does not assure a profit or protect against loss in declining markets.
• Allie. Allie, Alinea’s AI assistant, can explain your holdings, market news, and financial terms in plain language. At your request, Allie can also start a deposit, withdrawal, buy, or sell, and you confirm every transaction before it runs. Allie provides educational research and feedback only, does not provide investment advice or recommendations, and can make mistakes.

In the Alinea app, you can check your portfolio, make deposits, and chat with Allie. A robo-adviser’s portfolio assignment is limited by the information you give it, so it is important to keep your answers accurate and up to date [2].

Security and Regulation

Brokerage accounts are held at DriveWealth LLC, member FINRA/SIPC, which is not affiliated with Alinea. SIPC protects securities customers of its members up to $500,000 (including $250,000 for claims for cash) if the brokerage firm fails financially. It does not protect against a decline in the market value of your securities [4]. Bank accounts are linked through Plaid, Inc., a third party not affiliated with Alinea, and we do not store your online banking credentials. SSL and 256-bit encryption help protect your data.

Frequently Asked Questions

What is an AI investing assistant?

An AI investing assistant is a tool that uses artificial intelligence to explain information and answer questions. Allie is Alinea’s AI assistant. It provides educational research and feedback only, does not provide investment advice or recommendations, and can make mistakes.

How much does Alinea cost?

Alinea charges a subscription fee for its advisory services. See Item 5 of Form ADV Part 2A for details. Fees can reduce your returns.

What are ways to start investing as a beginner?

Some beginners start by defining their financial goals, understanding their risk tolerance, and learning the basics from free educational resources before choosing investments.

What should I consider when choosing an AI investing tool?

Consider what the tool does and does not do, who makes the final decision, its limitations, and its cost. Regulators advise being wary of claims that AI can guarantee investment returns and not relying solely on AI-generated information when making investment decisions [3].

Does Alinea guarantee results?

No. No investment approach assures growth or protects against loss, and you can lose some or all of your investment.

Disclosure

Advisory services are provided by Alinea Advisory Services LLC, an SEC-registered investment adviser and a wholly owned subsidiary of Alinea Invest, Inc. SEC registration does not imply a certain level of skill or training. Brokerage and custody services are provided by DriveWealth LLC, an unaffiliated registered broker-dealer and member of FINRA/SIPC.

This content is for informational purposes only and is not an offer, solicitation, or recommendation to buy or sell any security. All investing involves risk, including loss of principal. Past performance does not guarantee future results. Allie is educational only, does not provide investment advice, and can make mistakes. Some Playlists have their weights set by AI on a schedule, with no human review of the changes, and can be wrong. Alinea oversees the algorithm and monitors it for anomalies. Themed portfolios may be less diversified and more volatile. Alinea is not affiliated with the sources listed below, and their inclusion is not an endorsement. Alinea charges a subscription fee for its advisory services; see Item 5 of Form ADV Part 2A. Alinea’s support team handles questions about using the service only and does not provide investment advice.

See our Form ADV Part 2A, Wrap Program Brochure, and Form CRS at www.alinea-invest.com/legal/home. For more on Allie, see AI Allie – Disclosures & Terms of Use at www.alinea-invest.com/legal/ai-allie-disclosures-terms-of-use.

Sources

[1] U.S. Securities and Exchange Commission, Investor.gov, “Diversify Your Investments.”

[2] U.S. Securities and Exchange Commission, Office of Investor Education and Advocacy, Investor Bulletin: Robo-Advisers, February 23, 2017 (investor.gov).

[3] SEC Office of Investor Education and Advocacy, NASAA, and FINRA, “Artificial Intelligence (AI) and Investment Fraud,” investor alert, January 25, 2024 (finra.org, investor.gov).

[4] Securities Investor Protection Corporation (SIPC), What SIPC Protects (sipc.org).

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