FAQ & Glossary - MyRoboAdviser
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FAQ & Glossary

Does My Robo Adviser™ require a minimum investment in order to open an account?

No, there is no minimum investment or account balance needed to start/maintain an account with My Robo Adviser™.

How do I fund my account?

The fastest and easiest way to fund your My Robo Adviser account is to set up an electronic link with your checking account. To set up the electronic link with your checking account we need to make sure you own that account by having you confirm two small random deposits/withdrawals we put into that account. After entering your bank account information, you will then complete the following steps to confirm your bank account with Betterment:

  1. Log into your checking account at your bank.
  2. Find the two small random amounts under $1.00 we have deposited and immediately withdrawn from your account – please note, you may have to wait up to two business days to see these deposits.
  3. Log into your account at MyRoboAdviser.com.
  4. On the Transfer tab, in the Confirm Two Small Deposits window, tell us the values of the two random deposits in your account.
  5. Now you are ready to start investing.

Transfer cash or securities from another brokerage account.  If you have securities or cash in accounts at another brokerage firm, you will need to fill out some additional paperwork to transfer your assets.  In most cases, you will have to sell your existing securities at their current custodian and transfer the proceeds.  The only securities that can be transferred to your MyRoboAdviser account in-kind are Exchange-Traded Funds that are currently held in our investment models. Email Service@MyRoboAdviser.com with questions or for assistance.

Who may open an account on My Robo Adviser™?

Any individual who is at least 18 years old and a legal U.S. resident or U.S. citizen may open a My Robo Adviser account

What types of accounts does My Robo Adviser™ support?

My Robo Adviser currently supports individual and joint taxable investment accounts. My Robo Adviser also supports Traditional IRAs, Roth IRAs and Simplified Employee Pension (SEP) IRAs, IRA transfers and 401(k) rollovers. My Robo Adviser does not currently support 529 plans.

What are the costs of using My Robo Adviser™?

My Robo Adviser charges an all-inclusive .60% annual management fee on all accounts. This fee is accessed quarterly in arrears and is based on the average balance of the entire account over the quarter. My Robo Adviser does not charge transaction fees so you will not be charged commissions when securities are purchased or sold in your account.

What is Tax-Loss Harvesting?

Tax loss harvesting is selling a security that has experienced a loss—and then buying a similar asset to replace it. The switch does two things: it allows the investor to realize a loss while keeping the portfolio balanced at the desired allocation. Realizing a capital loss can help lower your tax bill by offsetting gains from other investments.

How will my tax reporting statements be provided?

When your tax statement is ready, you will receive an email notification from Betterment Securities (the custodian institution for your account at My Robo Adviser™) that your tax statement is available.  To aaccess, just log on to your account.

Is my money insured?

Betterment Securities provides brokerage services for My Robo Adviser customers. Betterment Securities is a member of the Securities Investor Protection Corp (SIPC),  meaning that up to $500,000 per individual account type will be protected in the event of company insolvency. For more information, visit www.sipc.org.

SIPC does not protect against loss of principal due to movements in the market value of your securities.

What is a “wash sale” and how will it affect me?

A wash sale results from the sale of an investment when a substantially identical investment was purchased within 30 days before or after the sale date. The IRS prohibits claiming losses on wash sales. My Robo Adviser™ uses tax-loss harvesting algorithms to manage your account that avoid wash sales within your My Robo Adviser™ portfolio.

Can I open an account if I don't live in the United States?

My Robo Adviser is currently available only to residents of the United States and cannot accept accounts from customers residing outside the country.

Customers must have a permanent U.S. address, U.S. Social Security Number and a checking account at a U.S. bank.

What happens when I deposit money in a My Robo Adviser account?

When you deposit money in your account, your money is transferred to the custodian (Betterment Securities), a FINRA member broker-dealer, with instructions to buy ETFs based on your desired asset allocation.  You own shares in the ETFs that My Robo Adviser recommends to help you reach your goals.

Why does my portfolio allocation wheel graphic show three colors, but the allocation numbers in the middle of the circle reflects only stock-bond numbers?

The web-based software program that we utilize to deliver our portfolios to you was originally and currently remains configured to portray two-dimensional portfolios.  When you are invested in a one of our 3 dimensional portfolios, your portfolio allocation graphic will show three colors; green (for stocks), blue (for bonds) and purple (for risk managed assets). The Stock-Bond numbers in the center of the graphic equate to the risk profile if your portfolio was only invested in Stocks-Bonds.  A future upgrade to the platform will correct this issue.  We apologize for any confusion and we appreciate your patience.

What are the benefits of using ETFs rather than mutual funds?

We believe ETFs offer our clients with several advantages when compared to mutual funds.  (1) ETFs are generally more tax-efficient than mutual; (2) ETFs are generally passive, index-based investments, which can have lower fees than most actively-managed mutual funds; (3) ETFs offer intraday liquidity, whereas mutual funds are only priced and traded based on end of day Net Asset Value; (4) ETFs generally offer greater transparency into their holdings than mutual funds, which are typically only required to reveal their holdings twice annually.

Why is MyRoboAdviser.com different than a stockbroker?

We do not charge a commission for transactions and we do not receive any additional compensation beyond our asset-based fee and thus we have no incentive to sell you one product over another.  As a fiduciary, we are required to put your interests first and fully disclose any conflicts of interest to you in a disclosure document (Form ADV, Part 2A brochure). This is available to you during the account opening process, or, if you would like a copy, you can always obtain one free of charge by sending an email to service@myroboadviser.com and requesting one.  In addition, online, hassle-free, 24/7/365 access to our goals-based advisory process helps remove the emotional aspects of making an investment decision.

How much are the fees in the underlying ETFs that are in my portfolio?

Our program provides 100 different customized portfolio solutions.  Thus, the underlying expense ratio for these portfolios range from approximately 0.14% (for our 0-100 portfolio), gradually increases to 0.65% (for the 65-35 portfolio), and then gradually declines to 0.53% for the 100-0 portfolio.  These cost differences occur because portfolios that contain a greater percentage of Risk Managed/Alternative ETFs have higher expenses.  You may find two-dimensional portfolios with lower cost, but we believe that the 3-dimensional Endowment –based asset allocation solutions enhance your risk-adjusted returns.  We are committed to reducing costs whenever possible and are always evaluating investment solutions that provide similar asset exposures with improved results and lower costs.

What are the risks- can my portfolio go down?

We invest in exchange-traded funds, which hold securities such as domestic, international, and emerging market stocks and bonds, commodities, precious metals, real estate investment trusts, private equity and hedge strategies and other types of securities in their portfolios.  Thus, the risks inherent in the underlying securities affect the value of the fund that holds them.  There is no guarantee that your investments will generate a profit and it’s possible that at any point in time, the value of your portfolio may be less than your original investment.  However, while past performance is no guarantee of future results, we believe that the portfolios we set up are reasonably designed and appropriate solutions to help you achieve the particular goals that you establish.  If you absolutely are not prepared to bear fluctuations in the value of your portfolio or are seeking an investment solution which guarantees no loss of principle, then MyRoboAdviser.com is not for you.   For more invormation on the costs and risks of investing, please read our disclosure document, Form ADV, Part 2 brochure, which is available by request at service@MyRoboAdviser.com.

What is Goal-Based Investing?

Our process is customizable to the way you think about your money through “goals.” Using goals, your portfolio can be segmented into a spectrum of goal-specific risk and return targets. In addition to customized allocations for each goal, if you have a specific target amount in mind, the advice engine will recommend savings and time horizon changes to achieve the target. For customers in retirement, goals allow the flexibility to take regular withdrawals or to continue to build wealth with time-horizon based buckets at different risk levels.

Glossary

Alternative Asset– Alternative assets are defined as any non-traditional asset with potential economic value that would not be found in a standard investment portfolio. Alternative assets can include hedge strategies, private equity, real estate, and hard assets such as precious metals commodities, and timber.

Asset Allocation– Dividing your investment portfolio among the major asset categories: stocks, bonds, and alternative assets.

Exchange Traded Fund (ETF)– An Exchange Traded Fund is essentially a passively managed open ended mutual fund. Similar to stock, each ETF has a ticker and is traded on a stock exchange.

Joint Account– Joint accounts enable two people to share and progress toward investment goals together. Both holders of the joint account have full access to the joint account and are able to create goals, transfer funds from the linked checking account, change allocations, and view the account.

Portfolio Rebalancing– My Robo Adviser™ automatically reallocates your investments when they drift too far from the desired allocation, keeping your portfolio in line with your goals.

Robo-Adviser– A robo-adviser​ is an automated investment service that provides algorithm or rules-based portfolio management. Robo-advisers often charge lower fees and require low minimum investment requirements because they do not handle some of the more personal and complicated aspects of wealth management.

Tax loss Harvesting-Tax loss harvesting is selling a security that has experienced a loss and then buying a similar asset to replace it. This allows the investor to realize a loss while keeping the portfolio balanced at the desired allocation. Capital losses can lower your tax bill by offsetting other gains or ordinary income up to certain levels.