FREQUENTLY ASKED QUESTIONS
LET'S PUT YOU AT THE FRONT.
We believe you are the Exception. Therefore we will never treat you like the rule. We use automation as a tool to serve you, not to make decisions for you. As the Exception you are involved in the construction of your portfolio given your individual ideas, dreams and aspirations.
What is the management fee for an exceptional portfolio?
We charge an annual management fee of 0.75% of assets managed by exceptional portfolio. The management fee is billed quarterly at a rate of .1250% based on your account value at the end of each quarter. Billing starts the day the portfolio is initially invested. There is a minimum annual fee for any account of $150.
What other costs or trading commissions may I incur?
We have access to hundreds of commission free ETF trades. In the unlikely event we need to use an ETF that has a commission, ETF commissions generally run $8.95 per trade. If your account transferred in the form of stocks and not cash you would incur a trading commission as noted above for each security held in the portfolio.
We also have access to hundreds of commission free mutual funds. In the event we need to use a mutual fund that is not on the commission free platform, commissions generally run $19.95 per trade. If your account transferred in the form of mutual funds and not in cash, you will incur a trading commission as noted above for each mutual fund held in your portfolio.
Outgoing wire transfer fee of $25. Other fees may apply.
Are there fees charged for me to move my investments from another brokerage to exceptional portfolio?
It is industry standard for brokerages to charge $75 to $100 fee for transferring out an account. We encourage you to check with your current broker for details. There will never be a fee to open your exceptional portfolio.
Are there any charges to open an account with exceptional portfolio?
As with any investment account, taxes on dividends, interest and capital gains will take place in taxable (non - retirement) accounts. These accounts include but are not limited to individual, joint and trust accounts. Tax information will be evidenced on your 1099 statement that is provided by your custodian.
How Do I Obtain My 1099?
Each year in the first quarter the custodian will create a 1099 for you to file with your taxes. You can access your 1099 by logging into your custodial account.
TYPES OF ACCOUNTS
What types of accounts can be managed at exceptional portfolio?
New IRA and Roth Accounts
IRA Rollover Accounts
SEP IRA Accounts
ACCOUNT OPENING PROCESS
How do I open an exceptional portfolio account?
To open an exceptional portfolio simply hit the get started button on the website. You will then be asked to complete a short risk tolerance survey. Within the survey you choose the portfolio best suited for you. Once the survey is complete you will be presented with the portfolio that you helped to create. You will then begin the process of opening your custodial account. If you are transferring an existing brokerage account you will also sign a transfer form and you will need to provide a scanned version of a recent statement (all pages). Lastly, you will be asked to sign an investment advisory contract with exceptional portfolio. You may fund your account with a check or wire transfer. Where to send the check or wire is outlined in the forms library. Note that for all taxable (non –retirement) accounts we can receive cash. Any IRA accounts can be received with securities in the account. We will immediately liquidate the portfolio upon receipt and invest the assets into the exceptional portfolio you have chosen. The liquidation of an incoming IRA portfolio will be subject to commissions. $8.95 per trade for stocks and $19.95 for mutual fund transactions.
Can I open multiple accounts?
Yes. You would repeat the steps outlined in the previous question - How do I open an account?
Can I change an individual account to a joint account?
Yes. Forms are available from the custodian that will allow you to change title on an account.
How do I transfer an account to exceptional portfolio?
Fill out a transfer form provided from our custodian. The forms are made available to you during the sign-up process. Additional forms are located in the forms library. All money received by exceptional portfolio needs to arrive as cash. The only exception, IRA’s from other custodians may be transferred without liquidating the portfolio. We will liquidate immediately and the client will be charged $8.95 for stock trades and $19.95 for all mutual fund trades. All individual, joint or trust accounts must be liquidated prior to arrival. Consult your exiting advisor or determine if there is any tax liability before liquidation. Fees may also be charged by the exiting custodian.
DEPOSITS AND WITHDRAWLS
How do I make deposits into my account?
PO Box 982603
El Paso, TX 79998
You may write a check made out to your custodian (check made payable to “Charles Schwab”) with your name, type of account and account number outlined in the reference section of the check. Mail it directly to:
You may set up a direct deposit from your bank’s checking or savings account directly with the custodian. A common cost effective practice is setting up an electronic ACH. Once ACH is received at Schwab there is a 3 day hold for the check to clear.
You may also apply for Schwab Mobile Deposit which makes depositing as simple as taking a picture with your smart phone. Maximum deposit is $10,000.
How do I make withdrawals from my account?
If you need to withdraw from your account please specify the amount and notify us via email at email@example.com and allow us to process the trades necessary to process the request the next trading day. Once the trades are made the funds become liquid 3 trading (business days) later. The funds would then be mailed to you to the mailing address on record.
IRA & 401K ROLLOVERS
Can I roll a 401k from an old employer into an IRA?
Absolutely. You can consolidate all of your 401k’s from old employers into an IRA Rollover account. It requires a bit of work on your end. First open up a new IRA account with exceptional portfolio. Once the account is open you will be given an account number. You will need to contact the HR department of your old employer. They may provide you with a form to be completed. That form will ask what custodian you have opened an IRA with and they will need the account number. Once you complete the form with your old employer they will reach out to the 401k provider and the account transfer process begins. The 401k provider may mail a check directly to your account at your new custodian or they will mail it to you. In the event you receive the check you MUST immediately get it deposited into your new IRA rollover account. Please note in the letter or on the check there is a strict timeline for you to make the deposit.
It is important to note that some 401k’s have a have two different options available.
A traditional pre-tax option.
A ROTH post tax option.
If this is the case, the traditional pre-tax portion of your 401k will be transferred into your IRA Rollover account. The ROTH post-tax option will be deposited into a Roth account. In the event you need to establish a ROTH account just go online to the forms library, complete the form and email it to firstname.lastname@example.org We will then email you back your new Roth account number you can provide your old employer.
When your old employer asks how you want the check made please note the following:
Check Payable to: Charles Schwab FBO (your name) IRA Rollover or ROTH IRA
Reference: In this section of the check identify your Charles Schwab account number
Mail all Checks to: Charles Schwab
Can I roll several 401k’s and/or 403(b) into a Traditional IRA or Roth IRA?
Yes, see instructions above.
What is a IRA Required Minimum Distribution (RMD)?
A required minimum distribution is a mandatory distribution each year prior to December 31st if you are the age of 70 ½ during that calendar year. We do not calculate RMD’s. You need to refer to the IRA beneficiary section of IRS Publication 590 to determine the required amount. Please refer to the forms library for an IRA Distribution Form.
HOW IS MY MONEY MANAGED?
Does exceptional portfolio invest all my money at once or over time?
Your money is invested as soon as it is received.
How often is my account rebalanced?
The portfolio is rebalanced depending on a variety of market variables predominantly volatility. The accounts are monitored on a daily basis. The portfolio team has placed parameters around your portfolio to allow for drift from the initial asset allocation. If the holdings drift outside of the predetermined parameters the portfolio manager will rebalance the portfolio accordingly. Typically the portfolio is rebalanced no more than 2 times a year.
Why do I have a cash balance in my account?
Most investment advisors will maintain frictional cash in managed accounts. It will allow the portfolio manager to have readily available cash to help rebalance the portfolio and take advantage of opportunities in the market.
TYPES OF INVESTMENTS
What type of investments are in my portfolio?
We will utilize Exchange Traded Funds (ETF’s) and various mutual funds as your investment vehicles. Depending on the Choice you make during the completion of your risk tolerance survey you may have ETF’s that have greater emphasis on socially responsible and environmentally friendly investing. You may also have up to 2 mutual funds in the mix of investments to provide you with an actively managed component to your portfolio.
What are ETF’s?
An exchange traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities or bonds, and trades close to the net asset value over the course of the trading day. Most ETF’s track an index such as a stock or bond index. ETF’s are a cost effective way to construct a diversified portfolio. Internal expense ratios apply.
What is a Mutual Fund?
A mutual fund is an investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money markets and similar assets. Internal expense ratios apply.
What is an ESG (Environment, Social Responsible and Governance) ETF or Mutual Fund?
The investment seeks to track the investment results of an index composed of U.S. companies that have positive environmental, social and governance characteristics as identified by the index provider. Internal expense ratios apply.
How is performance calculated?
Time weighted monthly compounded returns.
What is GIPS Compliant?
Global Investment Performance Standards (GIPS) are a globally accepted methodology for calculating and presenting investment firms’ performance history that are widely relied upon by investment firms, their clients, and prospective clients for ensuring consistency of investment firm results. Exceptional portfolio contracts with Cascade Compliance to verify GIPs standards.
How can I expect my portfolio to perform?
The all passive portfolios are constructed to track the performance of the broad market. They are designed to provide you with diversification across domestic and global markets. These portfolios will have similar volatility to the broad global markets.
The passive/active portfolios are designed to provide greater alpha than the market. You may experience returns equal to, greater than or lower than market returns.
The passive/ESG portfolios will track with market return in the global market ETF investments and be subject to greater volatility in the environmental ETF due to less diversification.
Who is eligible to invest in an exceptional portfolio?
Anyone over the age of 18, living in the United States with a US address, social security number and an established account with a bank.
How do I view my portfolio?
There are two options available. We encourage you to click on the login icon at the top of the exceptionalporfolio.com website. Establish a username and password to see a dynamic view of the portfolio. You may also see your account by logging into the custodian’s website. Instructions available in the forms library.
How do I see transactions in my account?
You will receive email confirmations of all transactions in your account directly from your custodian. You will also receive monthly statements and all tax documents from the custodian as well. When you click the login icon on the exceptionalportfolio.com website you will see transactions in your account the following trading day.
Is my money insured?
All custodians used are members of the Securities Investor Protection Corp (SIPC) which means the securities in your account are insured up to $500,000. Please note that SIPC DOES NOT protect against loss of principal due to movements in the market value of your portfolio.
Can my investments lose value?
Of course they can. All investments should be viewed with time horizons in mind. During strong upward markets you should make money. During short term and prolonged market downturns you should expect your accounts to lose value.
Are bonds as volatile as stocks?
They can be. The currently interest rate environment, the economy and the Federal Reserve’s policy play a key role in the bond market. Short term bonds generally offer less yield than long term bonds but the father out you go in duration the more volatile your bond portfolio will be.
How did you create the Questionnaire to determine my risk category?
The key components to determining your risk category center around your investment time horizon and how you would react to difficult market cycles. Those two components of the risk questionnaire help determine whether you have an aggressive, moderate or conservative tolerance towards risk.
What would happen to my account if exceptional portfolio joined another firm or went out of business?
You have an account held at a trusted custodian. In the event of any transition of the management team your securities remain in your account with your custodian with you in control as the account owner.