+ What types of charges can I expect when investing with AlphaGlider?
There are three main categories of charges you can expect when you invest with AlphaGlider:
1) AlphaGlider’s advisory fee which is charged quarterly, in arrears. See the question below to see how this fee is determined.
2) Fund1 management fees which are deducted daily by the fund management company (e.g. Vanguard Group) and reflected in the price of the fund. The weighted average expense ratios2 (i.e. fund management fees) for all AlphaGlider Core Investment Strategies are currently less than 10bps (0.10%). The weighted average expense ratios for all AlphaGlider ESG Investment Strategies are currently less than 20bps (0.20%).
3) Custodian fees. TD Ameritrade Institutional (TDAI) does not charge an annual fee on its investment accounts, nor does it charge commissions on exchange-trade fund (ETF) trades, but does apply customary charges on various services such as fund and wire transfers. my529 charges an Administrative Asset Fee (529 accounts only) which amounts to 0.18% of assets annually, charged monthly. All mutual fund trades at my529 are commission-free.
We designed the AlphaGlider service to keep each of these costs to a minimum. We believe AlphaGlider’s advisory fee to be extremely competitive with other active portfolio managers. We use extremely low cost, highly liquid index ETFs and mutual funds in our strategies. We chose an independent custodian for our non-529 plan assets which does not charge trading commission on ETF trades. We chose a 529 Plan custodian which offers low-cost Vanguard mutual funds and one of the 529 industry's lowest administrative fees. Our strategies are low-turnover by nature, which helps minimize bid-ask spreads and defer capital gains taxes which weigh on your investment returns.
+ What is AlphaGlider’s advisory fee?
We have one main source of revenue, our advisory fee (our other source is an administration fee for clients that elect to receive paper-based communications from AlphaGlider). Our advisory fee is based on the combined value of your household’s AlphaGlider accounts, as spelled out in the following schedule:
- first $500,000 in aggregate assets—the higher of $1,000 or 0.50% of assets, annually
- next $500,000, 0.40%
- next $1,000,000, 0.35%
- next $3,000,000, 0.30%
- next $5,000,000, 0.25%
- amount above $10,000,000, 0.20%
For example, a household with three accounts that average a combined $750,000 throughout the year would incur an annual advisory fee of $3,500 ($500,000 x 0.5% + $250,000 x 0.4%).
Please see ‘Item 5 – Fees and Compensation’ in our Client Brochure (Form ADV Part 2) for more details.
+ When does AlphaGlider charge its advisory fee?
AlphaGlider charges its advisory fee quarterly in arrears (i.e. after the quarter ends), based on the daily average balance of your investment accounts. If you have a taxable account with AlphaGlider, we will usually deduct our fee from this account 10-15 days after quarter end.
If you have multiple (taxable and tax-advantaged) investment accounts with AlphaGlider, we normally deduct the advisory fee incurred by all of your accounts from your taxable account, so that all of your tax-advantaged funds are preserved for as long as possible. Your particular circumstances may make it attractive to pay your tax-advantaged account (e.g. IRA) advisory fee directly from this account. Please contact us if this is the case.
Please consult your tax advisor for more detailed information or for advice regarding your individual situation. AlphaGlider does not provide tax advice.
If you only have tax-advantaged accounts with AlphaGlider and do not want to pay your advisory directly from them, you have two options: 1) Square Cash or 2) by mailing us a check.
+ Are there custodial fees associated with my investment accounts?
There are no fees to open or maintain an account at TD Ameritrade Institutional (TDAI), the independent custodian for your non-529 plan assets. TDAI does not charge trading commissions on exchange-traded funds (ETFs), but pass-through regulatory fees, foreign transaction taxes, and other fees may be assessed under various US regulations or imposed by foreign governments. You may also incur fees for various client initiated requests such as wire transfers, express check requests, security transfer outs fees.
View this TDAI document to learn more about TDAI's standard fees, commissions, and limits.
my529 administrative asset fee (529 accounts only) amounts to 0.18% of assets annually, but is charged monthly. my529 does not charge trading commissions on its offering of mutual funds.
+ Will I be charged if I choose to close my AlphaGlider account?
AlphaGlider will not charge you to close your account. Just send us written confirmation (an email or fax will suffice) that you would like to close your account and we will begin the process of returning your funds.
You may incur custodial fees when you close your AlphaGlider account, such as trading commissions, fund transfer out fees, outgoing wire fees, and express check mailing fees.
View this TDAI document to learn more about TD Ameritrade Institutional’s standard fees, commission and limits.