Motley Fool vs Zacks Showdown — Which Gives Better Research?

Overview

• Name: Motley Fool | Zacks Investment Research
• Founders: Tom & David Gardner | Leonard Zacks
• Website: www.fool.com | www.zacks.com 
• Service: Investment Research and Advisory

Motley Fool and Zacks Investment Research offer similar services. Both have various products that help investors make better decisions with their money. 

Since a lot of us worry about the markets, we consume such products. But we also want to listen only to credible sources.

That's why our goal here is to help you discern which newsletters will help or at least not scam you. After all, there are so many advisories now. It's hard to distinguish which ones are legit.

So as we examine Motley Fool and Zacks, take note of green and red flags for you. After all, we have varying styles, purposes, and goals in investing.

Motley Fool markets itself as an irreverent research firm rooting for the everyday investor. For Zacks, it has Zacks Rank, which is a mathematical approach to stock-picking.

The websites of each are also user-friendly. If you are more traditional, you would be more attracted to Zacks. Its website looks more formal and traditional, as we have mentioned.

Meanwhile, Motley Fool is more stylish and colorful. Those looking for something fun while investing will be drawn to its branding. We assume that its target market may be those who are still young.

Its marketing efforts may be appealing to those who are just starting. When you check out its content and the language the company uses, you would not get intimidated.

Meanwhile, though both have individual and bundled services, Zacks seems to promote the latter more.

Both companies also have free resources for regular investors. Anyone can just check what kind of content they have and learn from them.

As you know, we love it when advisory firms are generous with what they know. Whether we subscribe to them or not, it's net positive since many more are becoming financially smart.

It also helps that aside from the articles, there are also videos and podcasts. Such variations would appeal to more people so they can learn about investing.

Company Profiles

How do the two present themselves to potential subscribers? What is their unique selling proposition? Who do they try to reach in their marketing efforts?

For Motley Fool, central to its messaging is its focus on long-term investment philosophy. 

If you use its strategy, your first step is to acquire high-quality stocks. What’s critical here is their recommended strategy. Its leadership team says it's more beneficial for you if you hold onto them for extended durations. 

For the company, this approach has already yielded positive results. Countless subscribers have supposedly benefited from its approach.

Motley Fool envisions a new world where people are smarter about their finances. On its face, the mission is nothing short of ambitious, for sure. 

If people follow its recommendations, the company claims its readers will have more financial success.

In fact, it adds that millions of individuals globally read Motley Fool. For the company, it just shows that it is doing the right thing.

As we were reading its website, we were also impressed by one of its core beliefs.

The firm says that the Motley Fool is dedicated to treating others as they would like to be treated. For the company, it is a real-life manifestation of the "Golden Rule."

If it’s able to live up to that standard, that means its editors, marketers, and customer service teams value and respect their subscribers.

This is critical as it signals they will not scam subscribers.

But what kind of feedback do they receive? Can readers say that Motley Fool practices what it preaches?

We will talk more about that later.

Moreover, we found an interesting tidbit about the company's name: it actually originated from a Shakespeare play.

The court jester, also known as the Fool, could speak candidly to those in power without facing dire consequences. Accordingly, this theme aligns with Motley Fool's mission.

It aims to challenge conventional wisdom. Thus, the firm wants readers to know they can candidly discuss money matters. These issues do not need to always be formal.

If you seek financial guidance, Motley Fool says its services are worth your while. Its founders say they believe in making investing accessible to everyone. You will benefit regardless of your experience.

As for Zacks, it also promises a lot for potential subscribers. As an investment research provider, it brands itself as a math whiz. Using what it calls a Zacks Rank, the company says it relies on actual data.

According to its founder:

Earnings estimate revisions are the most powerful force impacting stock prices.

Apparently, it is a home-grown stock-rating system. Since it is based on math, Zacks says it is free from emotional biases. Thus, subscribers know they can rely on the firm's recommendations.

In coming up with the ranking, it uses metrics connected with earnings per share. It's supposed to group "equity products according to their earnings potential."

Zacks is also into crypto, a controversial and in-demand investment at the moment. We wonder how readers respond to its assessment of this investing space. 

Since it relies heavily or solely on qualitative analysis, how does Zacks factor in headlines and issues surrounding digital currency?

Leadership Teams

The Motley Fool founders are Tom and David Gardner.

According to them, their brand is all about helping you, a regular investor. Both agree that ordinary people must also have access to excellent investing advice.

For too long a time, only the wealthy had access to "insider information." This is why Motley Fool markets itself the way it does.

According to the Gardners, their goal is to appeal to everyday people. If they can help a regular Joe make better investment decisions, many more would get financial freedom.

When they started the company, they beat the S&P by 40%. The Gardners also claim that regular subscribers know they frequently outperform the index.

Meanwhile, Zacks claims "it has more than doubled the S&P 500 with an average gain of +24.26% per year." The company claims its performance is because of its visionary founder, Leonard Zacks.

Unfortunately, there's not much more information about the current leadership team at Zacks. Unlike most websites, it does not seem to prominently display its leadership team.

To see who is involved in the company, you need to click on each service. Editors include:

• Neena Mishra, CFA, FRM, Director of ETF Research,
• Sheraz Mian, Director of Research, and
• John Blank Ph.D., Chief Equity Strategist.

In fact, some services do not even indicate who the editor is.

This is in sharp contrast to Motley Fool, where it's more transparent. You could easily see who the Board of Directors are. Their names and faces are prominently displayed on the website.

We wonder why this is the case. Is this just part of consistent branding for both firms?

Motley Fool is more fun and open, even with its personnel. Zacks does not focus on personalities but on its no-nonsense quantitative analysis. 

What do you think?

Services

Motley Fool has many ventures related to investment research. The main company also has asset and wealth management. There's also Motley Fool Ventures.

Aside from these, the Gardners also have Lakehouse Capital and
1623 Capital. In addition to the U.S., Motley Fool also has headquarters in the U.K., Canada, and Australia.

But its main claim to fame is investment research. The company currently has about 30 advisory services. Its most promoted are Stock Advisor, Rule Your Retirement, The Ascent, and Rule Breakers.

You may get Motley Fool's services per subscription or report. There are also bundles and an all-access pass for a whopping annual fee of $13,999. 

As for the other company, Zacks Rank is the centerpiece of all its services. Before, subscribers use the metrics for the earning potential of stocks. Now, it also has rankings on others like ETFs and mutual funds. 

As mentioned, aside from individual services, Zacks seems to promote its bundles more.

There's a Zacks Premium, Zacks Investor Collection, Zacks Ultimate, Zacks Wizard, and Zacks Method for Trading, among others. 

Examples of other advisories include ETF Investor, Home Run Investor, Marijuana Investors, Healthcare Innovators, and Large-Cap Trader.

Based on these, you could see both companies are like any other research firm. They may brand and present themselves differently, but ultimately, these providers respond to what readers want.

Track Record, Issues, and Reviews

Motley Fool's Stock Advisor got 3.7/5 stars from 1207 votes on Stock Gumshoe as of this writing. Honestly, that's a pretty decent rating, especially since many people have rated it.

Imagine, most of the time, people go online mostly to rant about a service. But for this many people to say it's a good service, it must be really good. But is it a legit rating? Let's see later.

Commenter "jpetergmd" says this about the service:

Motley Fool makes sound judgments. The basic philosophy is research, buy solid companies, and hold for 3-5 years or longer. The company’s postings on their approach are instructive.

Many also seem to have been trusting the company through the years. As a company, it has already served generations of subscribers. In fact, "autobahn97" credits Motley Fool for his interest in stocks:

Great value for the long-term investor. I subscribed to this service 15 years ago and it was what got me interested in stocks and investing.

Another Stock Gumshoe commenter details his experience with the newsletter's recommendations:

Of course, there were subscribers who were not satisfied. If you have been reading Green Bull Research for quite a while, you know we present both sides to be fair.

Here is an example of negative feedback:

As you can see, the commenter was as passionate against Motley Fool as those for it. He even goes as far as saying that Motley Fool's staff and leadership are con artists fooling subscribers.

These are harsh words, indeed. So we can say he has not had a pleasant experience with the recommendations.

In addition, another user details why he no longer pays attention to the company and its services. Read about an informative account from a past subscriber below:

In the comment, you could see he knows about Motley Fool and its history.

Stock Gumshoe's Motley Fool One review page shows a 3.7/5 rating. This is from only 109 votes by the time we publish this article. 

Similarly, Motley Fool Rule Breakers also has the same 3.7 score as the two other services. This time, it's from 500 votes.

That's a little strange, for sure. We have different numbers of voters, yet all three receive the same scores. It's as if something or some people keep the ratings as is.

If Stock Gumshoe was not the source, we would have suspected manipulation here. But the website seems reputable, as we have noted in our past Stock Gumshoe review.

So it could really be a coincidence, but what do you think?

As of publishing, Motley Fool has a far lower rating from Trustpilot. Based on 51 reviews, the company got a 1.6/5 score. In fact, 90% gave the company 1 star out of 5. Just brutal.

Commenter "Alison" said she was wrongly charged for a transaction. For this reason, she believes Motley Fool is "disreputable and fraudulent."

It always is frustrating when this happens. Unfortunately, we read about such instances a lot from many subscribers of various companies. Have you experienced this as well?

Meanwhile, "John Reed" writes this:

Awful investment advice seemingly given by student interns. They ask you to hold for a minimum 5 years so you won't realize how poor their service is.

However, a very small few still gave the company positive feedback. According to "Ricky Ricardo," investors should also study recommendations well. Readers should research on their own as well, he adds.

His experience with Motley Fool has been positive. But he also adds that maybe those complaining did not practice due diligence.

What do you think about the comment of the I Love Lucy character's namesake?

As for Zacks, there does not seem to have too much discussion about the company on Stock Gumshoe. But we did see a review page for Zacks Premium. As of this writing, the service has a 3.4/5 rating from 74 votes.

Seems decent enough, but it's from a small sample of subscribers. Of the comments on the page, we found these two to be the most insightful:

Tried for 3 months. Net loss. Didn’t even pay its own way for the cost of the subscription. Left me with no confidence in their recommendations. (T-squared)

I subscribed to Zacks's service and for my $350 for a year I got the lower-end portfolio info, under 10, home run, etc. I really don’t think they include the sells when they are 20% or more down into the overall profitability. (Cliff Troyansky)

That's as far as it goes, unfortunately.

A bit more people reviewed the company on Trustpilot. The Zacks Investment Research page has 2.1 out of 5 stars from 84 reviews by the time we publish this. That's a "Poor" rank, according to the site.

A majority, 61%, gave it 1 star, in fact. Want to see some of the negative comments?

Don’t be the next prey of these greedy folks.

This isn't a platform to write anything positive about, to be honest. You'll go through a difficult time to make a withdrawal.

I find Zacks to be completely useless. I have tried to give them the benefit of the doubt over several years.

However, their "reports" are simply copy and paste with a new ticker and some different data. There is absolutely no meaningful insight to be found, anywhere in their "content".

Zacks Premium is antiquated and its analysis is incomplete. Its entire “system” is based on EPS revisions which was a revolutionary idea in the 1970s, but it’s 2023 – information flows more freely these days.

These comments sting. The last one, in particular, hits at the heart of what makes Zacks unique. For the commenter, the company has not evolved to meet the demands of current times.

Are there positive comments as well? About 13% rated it 5/5 stars.

I rely on Zacks for all my buys & sells, not only for my accounts, but also for my clients accounts. We all did well so far. Thank you for the great advice.

The Zacks Ranking is an extremely important tool in my rebalancing and comparison to others. I have been able to double my investment in the past year.

The other two below seem to contradict the flood of negative reviews. They seem to add context to Zacks and its services.

To be fair, the company has gotten more positive reviews from Site Jabber. Its Zacks review page on the site has gotten 4 out of 5 stars from 128 reviews as of this writing.

About 79 reviews gave it 5 stars, while about 36 gave it a 1-star rating. Here are a few of the comments so you can read them for yourself:

As you can see, subscribers' experiences greatly vary. The reason why we present both sides is for you to see the range of sentiments. Discern how you will personally use these, and decide for yourself.

Data Breach

In June 2023, an article with the headline below appeared on Tech Radar:

Millions of banking users might have been hit in data breach - find out if you're affected

According to the write-up, a database from Zacks has been stolen in May 2022. It supposedly carried "8.8 million personally identifiable data records."

The article also writes:

The database contains email addresses, usernames, unsalted SHA256 passwords, addresses, phone numbers, full names, and other data belonging to Zacks customers.

Unfortunately, the article also says that this is not the first data breach for the company. It also happened between November 2021 and August 2022.

However, for both, no financial information was used, according to the article.

Zacks has responded to the more recent news on its website. According to the company, "an unknown third-party gained unauthorized access to certain customer records."

In response, the firm said it took immediate action. The team investigated it and added security measures for its subscribers.

Further, the company assures subscribers that the accessed information is limited. There's also no evidence they have been used inappropriately, according to its statement. 

In its latest update, the company confirms that the breach also included some encrypted passwords.

This is a major issue. Today, data is power, and we have faith that companies take our privacy and data seriously. It's such a nightmare to have your personal and financial data exposed to scammers.

Pros v Cons

Pros

• Motley Fool and Zacks already have years of experience in the space. They have an established presence in the investment research industry.
• Both companies are predictable in their recommendations. What we mean here is that they have a system they use. Motley Fool is more mainstream, and Zacks has Zacks Rank.
• Motley Fool can connect easily even to new investors because of its fun and non-intimidating approach.
• Zacks boasts a quantitative analysis of investments. For the company, data matter more than emotions and biases.

Cons

• Both have passionate people saying they do not offer anything special. Others have even called them scammers.
• The two companies get complaints about their customer service. This is a major red flag because some subscribers do not know how to fight back and get their money back if there have been mistakes.
• Some subscribers say Motley Fool seems to be more interested in its branding than the quality of its investment research.
• Zacks is also criticized for having an outdated system. We have shown you one review where the commenter said Zacks's basis is no longer reliable due to the availability of more data today.
• The data breach issue on Zacks is a major security concern.

Conclusion – Which Gives Better Research?

In this Motley Fool vs Zacks article, we have shown you all the sides to the story.

Tom and David Gardner founded Motley Fool to cater to regular investors. Their goal was to tell the truth even if it's unpopular. Their branding makes it accessible to everyone.

Meanwhile, Leonard Zacks's foundation for his investment research firm is quantitative analysis. For him and his team, numbers should be the main focus of investing.

The two also claim to outperform the S&P 500 consistently through the years.

Moreover, both companies invest heavily in their websites, even if their designs are polar opposites. They also have a vast array of services. This way, they can get as many subscribers with varied interests as possible.

Based on the reviews, both have super fans and haters. Naturally, each one has something to say. It will be up to you to discern which comments resonate more with you.

As always, we advise our readers to be circumspect with how they weigh reviews. Every subscriber has a different experience.

For us, the data breach concerning Zacks is an urgent matter. We should all be vigilant with our private information. In the same vein, companies who help us with financial matters must also have strong security features.

Each company has things going for and against them. We hope you can decide better now based on what we discussed in our detailed review of Motley Fool vs Zacks.