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Smart Portfolio is a type of managed account offered by Passfolio Advisers LLC that is designed for clients who seek a digital, discretionary investment management experience. The platform relies on algorithms* to develop and suggest an investment strategy for helping you manage your money. Your experience takes place online - including providing information about yourself, opening your account, and tracking your investments.
For a more in depth view of Passfolio Advisers LLC’s services, including fees, please view our Wrap Fee Brochure, Advisory Agreement, and Relationship Summary.
* There is a risk that the algorithms and data input into the algorithms could have errors, omissions, imperfections, or malfunctions.
You start by telling us a few things about yourself such as your investment experience, risk tolerance, and time horizon. Once you do that, we'll suggest an investment strategy consisting of ETFs based on what we think is appropriate for you based on the answers you provided us. From there, you can explore other investment strategies that may be a better fit for you or accept our suggestion.
When activating Smart Portfolio, you have the option to choose the investment portfolio according to your investor profile or accept our suggestion.
Then just select the amount to be invested and let our Smart Portfolio do the work.
We have 3 investment options: Conservative, Moderate, and Aggressive.
Conservative
People with conservative risk attitudes prefer little risk and low volatility in return for accepting potentially lower returns. Minimizing exposure of principal to loss or fluctuation is very important.
Investors with conservative risk attitudes will typically use more bond funds or cash in their portfolio than investors with riskier attitudes. While the risk of losing money due to poor market performance could be reduced with a conservative approach, this type of investing comes with other risks such as potentially not being able to build enough wealth to meet financial goals or even potentially not being able to keep pace with inflation to maintain the purchasing power of your investments. While having the benefit of potentially experiencing less ups and downs in the market, investors with conservative risk attitudes likely need to save more to reach the same wealth levels and meet the same financial goals as those that are comfortable taking more risk.
Moderate
People with moderate risk attitudes take some investment risk but are also wary of the downside.
Investors with these views towards risk tend to be more comfortable with investment volatility today for the potential of better outcomes in the future, but they will not go to the same levels of equity risk taking as aggressive investors. Relative to conservative investors, there may be a reduced risk of not being able to build enough wealth to meet long-term retirement goals or even potentially not being able to keep pace with inflation, but there is an increased risk of portfolio volatility and short-term losses.
Aggressive
People with aggressive risk attitudes are comfortable with risk taking and dealing with shorter term market volatility to have a chance to reach higher levels of wealth in the future and meet long-term investment objectives.
After choosing your investment option, just choose the amount you would like to invest and that's it! Our Smart Portfolio will manage this investment portfolio according to the initial percentages of the chosen investment option.
Smart Portfolio's job is to rebalance and maintain the investment percentages as suggested in the option you selected.
Example:You chose an investment option with assets ABC and XYZ, both with 50% allocation, and both with a market value of $100, in other words your investment has a value of $200.
If asset ABC appreciates to $150 it means your investment is now worth $250, but asset ABC now represents 60% of your total investments ($150 / $250 = 60%). Smart Portfolio will sell part of the ABC position and reinvest in XYZ to bring the allocation back to 50% for each asset. In this example Smart Portfolio would sell $25 ABC, and buy $25 XYZ, totaling $125 ABC and $125 XYZ.
The same logic applies in the scenario where one of the assets depreciates. In this case Smart Portfolio would make a partial sale of assets that appreciated, and then buy more of the asset that depreciated so that the allocation returns to the percentage indicated by the initial investments option selected. The rebalancing is typically done on at least a quarterly basis.
You can turn Smart Portfolio on and off in your app at any time.
To activate Smart Portfolio is simple! Just follow the instructions below:
Passfolio Advisers charges a 0.75% annual advisory fee. The amount is billed monthly every 15th and is deducted directly from the value of your investment portfolio, so you don't have to worry about adding more money to cover the cost of your Smart Portfolio. The fee is proportional to the time of use of the program and the total amount invested on the day of collection.
That is, you divide 0.75% by 365 days to get the daily rate, multiply by the amount invested on the billing day, and then multiply by the number of days used.
Example:
You have a $100 portfolio. Smart Portfolio was used for 10 days of the month. The fee will be calculated using the following formula:
Smart Portfolio Fee = (0.75% annual fee /365 days) * 10 days used * $100 = $0.02
*Example is for illustrative purposes. Actual fees may vary.In addition, there may be other costs associated with the underlying investments of the portfolio.
Keep in mind, closing your account by withdrawing your entire balance will result in a termination of the managed account service, at which time you will be charged a prorated portion of the advisory fee for the time your account was managed.
The minimum amount to invest on Smart Portfolio is $100. This value needs to be maintained, this means if you invest $100, you won’t be able to withdraw $50, but you can alternatively close your portfolio and withdraw all your balance!
When you deactivate your Smart Portfolio all positions will be sold and this value will be available in your stock portfolio buying power within 2 business days.
To disable Smart Portfolio is simple! Just follow the instructions below:
Keep in mind, closing your account by withdrawing your entire balance will result in a termination of the managed account service, at which time you will be charged a prorated portion of the advisory fee for the time your account was managed.
The investments in your Smart Portfolio account are subject to the ups and downs of the market. When the markets decline, or the investments in your account declined in value, you may lose money.
You’re free to change your account objectives by visiting your account profile.
We base our suggestion for the investment strategy for your account on the information we have on file for you. In order to help us provide a strategy that’s appropriate for your goals and your risk tolerance, it’s important that you keep that information up to date.
We'll usually begin investing according to your investment strategy in up to 2 business days.
Securities less than $5 cost $0.02/share. Please see our disclosures on other charges.
Please see the terms of our referral program.
Please see our fractional shares disclosure.
Please read important legal disclosures that apply to your relationship with Passfolio.
Investing involves risk, including possible loss of principal.
Securities and cryptocurrencies are very different types of assets.
Cryptocurrencies are not securities.
Purchasing cryptocurrencies comes with a number of risks. Please read Passfolio Financial Cryptocurrency Risk Disclosure.
Currency and cryptocurrency exchange services provided by Passfolio Financial LLC (“Passfolio Crypto”), a US Money Services Business registered with FinCEN. Passfolio Financial LLC is not a broker dealer. Cryptocurrencies are not protected by either FDIC or SIPC. Securities products and services offered to self-directed investors through Passfolio Securities LLC Member FINRA / SIPC. Securities products and services offered to self-directed investors through Passfolio Securities LLC Member FINRA / SIPC. Passfolio Securities, LLC does not provide cryptocurrency-related services. Passfolio Securities LLC is a member of SIPC, which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at www.sipc.org.
Investors should consider the investment objectives, risks, and charges and expenses of an Exchange Traded Fund ("ETF") carefully before investing. Before investing in any ETF, you should consider its investment objective, risks, charges and expenses. Contact us at support@passfolio.com for a prospectus containing this information. Read it carefully.
ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses. ETF shares are bought and sold at market price, which may be higher or lower than their NAV, and are not individually redeemed from the fund. Investment returns will fluctuate and are subject to market volatility, so that an investor's shares, when redeemed or sold, may be worth more or less than their original cost. ETFs are subject to risks similar to those of stocks. Some specialized exchange-traded funds can be subject to additional market risks. Leveraged and inverse exchange-traded products are not designed for buy and hold investors or investors who do not intend to manage their investment on a daily basis. These products are for sophisticated investors who understand their risks (including the effect of daily compounding of leveraged investment results), and who intend to actively monitor and manage their investments on a daily basis.
Be sure to consider your own financial situation, perform thorough research, and consult with a qualified tax professional before making any investment decisions concerning REITs. Investments in REITs and other real estate securities are subject to similar risks as direct investments in real estate. The real estate industry is particularly sensitive to economic downturns.
Passfolio Advisers, LLC is a registered investment adviser registered with the United States Securities and Exchange Commission (“SEC”).
Passfolio is the brand name of Panchain, Inc. Passfolio Securities LLC, Passfolio Financial LLC, and Passfolio Nigeria Limited are fully-owned subsidiaries of Panchain, Inc. Passfolio Nigeria is registered with the Nigeria Corporate Affairs Commission.
To purchase securities using cryptocurrencies, you must first convert it into U.S. Dollars using Passfolio Financial LLC. You must then move the U.S. Dollar proceeds to your brokerage account at Passfolio Securities LLC where you can use it to buy securities.
Online trading has inherent risk due to system response, execution price, speed, liquidity, market data and access times that may vary due to market conditions, system performance, market volatility, size and type of order and other factors. An investor should understand these and additional risks before trading.
Content, news, research, tools, market data and securities symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. The information provided is not warranted as to completeness or accuracy and is subject to change without notice. The information provided should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation. The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, are not guaranteed for accuracy or completeness, do not reflect actual investment results and are not guarantees of future results.
All investments involve risk, losses may exceed the principal invested, and the past performance of a security, industry, sector, market, or financial product does not guarantee future results or returns. Consider the investment objectives, risks, charges, and expenses of a fund before investing. Contact us for a prospectus containing this information.
Please remember that diversification is not an investment strategy without risk, and in certain circumstances, it may not fit your investment objectives. Past performance is no guarantee of future results.
Certain services (“Services”) offered through our mobile app are offered only in jurisdictions where it is legal to do so. The availability of the Services over the Internet is not a solicitation for or offering of the Services to any person in any jurisdiction where such solicitation or offering is illegal. We reserve the right to limit the availability of the Services to any person, geographic area, or jurisdiction, at any time and in our sole discretion. We make no representation that the Services are appropriate or available for use in locations outside of United States, or that accessing our mobile app is legally permitted in countries or territories where the Services may be illegal. If you access the Services from other locations, you do so at your own risk and are responsible for compliance with local laws. In particular, we are not authorized by the Brazilian Securities and Exchange Commission (CVM) to offer securities distribution services to investors who reside, are domiciled or incorporated in the Federative Republic of Brazil. The Services are not specifically directed to investors who reside, are domiciled or incorporated in the Federative Republic of Brazil and should not be understood as an offer of services directed to such investors.
According to CVM's Legal Opinion No. 33, dated September 30, 2005, Passfolio contracted RB Capital Investimentos Distribuidora de Títulos e Valores Mobiliários Ltda. ("RB Investimentos"), a Brazilian securities distributor duly authorized by the Central Bank of Brazil and the CVM, through which RB Investimentos makes Passfolio's services available to investors resident, domiciled or incorporated in the Federative Republic of Brazil. The services provided by RB Investimentos should not be understood as an offering of securities directed to such investors. Although RB Investimentos has been hired to provide Passfolio's services, Passfolio offers its services exclusively in the United States and under the rules and regulations applicable in that country. As these services are investments made directly in the United States through Passfolio, they are not registered with or subject to the supervision of the CVM or any other Brazilian regulatory agency, so the investor must have knowledge of the language and local regulation. Investors resident, domiciled or incorporated in the Federative Republic of Brazil who have become or will become clients of Passfolio through RB Investimentos may contact the following e-mail addresses: suporte@passfolio.us / contato@rbinvestimentos.com
Where an investment is denominated in a currency other than the investor’s currency, changes in rates of exchange may have an adverse effect on the value, price of, or income derived from the investment.
Securities products are: Not FDIC insured · Not bank guaranteed · May lose value
Market data refreshed at least every 15 minutes unless otherwise indicated. Market data provided by Polygon.
FINRA BrokerCheck reports for Passfolio Securities LLC are available at https://www.finra.org/brokercheck.
Check Passfolio Advisers LLC information on the SEC’s IAPD.
Trademarks and logos are the property of their respective owners and do not represent endorsements of any kind. Unless otherwise noted, Passfolio Securities, LLC and its affiliates are not partners, affiliates, or licensees of these companies.
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Passfolio Securities, LLC
Member FINRA/SIPC
V.10 6/28/2021
