Frequently Asked Questions
The annual investment management fee for Portfolio Solutions® is 0.37% for the first $3 million of investment assets managed, and 0.20% for assets greater than $3 million. It is recommended that our clients have assets in excess of $1,000,000. A total relationship value below $1,000,000 is subject to a $925 minimum quarterly fee in lieu of the 0.37% annual management fee.
A minimum relationship of $500,000 is required. There are no limits on the number of investment accounts or balances per account.
Portfolio Solutions® is committed to charging you a fair price. A typical investment manager charges his/her clients fees of 1% per year on average. That’s much too high given technological advances in the investment management industry over the past 20 years. High investment manager fees persist because the public doesn’t know that a low-cost solution has been available for more than a decade at Portfolio Solutions®.
Yes. Every client at Portfolio Solutions® has a dedicated Investment Specialist who will monitor your specific individual goals and objectives and work with you to align them with your investment strategy.
Portfolio Solutions® is an investment management firm. We are not “traditional” financial planners. However, as part of developing your ConfidenceMap™, we will discuss financial planning-related topics.
The process to start managing your investments can vary, depending on your availability to talk with an Investment Specialist to develop your ConfidenceMap™. For a motivated investor, the process may take as little as 10 business days.
Each portfolio follows an investment strategy that is decided and approved by you in advance and is outlined in your ConfidenceMap™. You are hiring Portfolio Solutions® to monitor and manage your accounts, according to your ConfidenceMap™. As such, you will not be hassled by us seeking permission to perform routine management and monitoring. If you have questions about your account(s), simply contact us by phone or e-mail.
Index investing is based on the concept of capturing stock and bond market returns at the lowest possible cost in order to obtain the highest probability of meeting your long-term financial goals. Index investors generate better returns than the majority of market timing and stock picking investors by using diversified, low-cost, tax-efficient asset classes that provide the returns of the markets. The more you pay for investment advice and products, the lower your expected return.
As fiduciaries, Portfolio Solutions® adheres to the strictest performance reporting standards. Each client receives a personal quarterly performance report that compares your returns to applicable benchmarks, as defined in your ConfidenceMap™.
All client accounts are held by a qualified independent custodian, Charles Schwab & Co., Inc. (Schwab). Portfolio Solutions® has selected this custodian because of its commitment to client service, low costs, security and a dedication to operational efficiency.
No. Portfolio Solutions® employees do not have access to your money. Your money is held in an account in your name by Schwab. Portfolio Solutions® only has limited authorization to trade securities with discretion and deduct our quarterly management fee from the account under management. We have no other access or authority to your account(s).
Our proprietary approach to providing you with investment management starts with a ConfidenceMap™ — a roadmap that will provide you with the highest probability of meeting your long-term financial goals. The ConfidenceMap™ is comprised of a Plan and a Portfolio. A Plan is developed after in-depth conversations about many important financial aspects of your life that will impact your investment approach. This information is then used to develop your Portfolio, which details your investment strategies.
FAQs About Account Operations
Yes. They act as a custodian of all our Clients’ assets, which means they hold securities and cash and facilitate trading activities. Portfolio Solutions® has selected Charles Schwab & Co., Inc. as custodian because of their commitment to client service, low trading cost, and a dedication to operational efficiency. Our management fees are kept low because of the operational efficiency created by having only one custodian.
No. Portfolio Solutions® is not affiliated with Charles Schwab & Co., Inc., nor are we compensated by that company in any way through fees, commission, or incentives. In the spirit of full disclosure, our firm is supplied necessary software that allows our in-house portfolio management system to work efficiently and cleanly with Schwab’s back-office operations and trading desks. This software is available to all investment advisors.
No. There is no reason to visit a Charles Schwab & Co., Inc. (Schwab) office. We will assist you in opening a Schwab account and we will send you all the necessary Schwab paperwork . If there is a Schwab office nearby, you may go there to deposit checks rather than mailing money to Schwab. That would reduce the time it takes to put checks into your account.
Yes. Free internet access is available to Clients through a special Charles Schwab & Co., Inc. website 24 hours per day, 7 days per week. The website also is the source for immediate information on account activity and provides you with many reports including year-end tax information.
Charles Schwab & Co., Inc. sends monthly statements to all clients for all accounts. These statements show account balances, trades, cash flows, and unrealized gains. Statements are available in paper as well as through email. In addition, Portfolio Solutions® will send a detailed performance report each quarter that compares your portfolio’s performance to a series of relevant market index benchmarks. We urge you to compare your monthly statements from Schwab with the quarterly statements we send you.
At the end of each year, Charles Schwab & Co., Inc. will send a Form 1099 to each client that has a taxable account. Included in your Form 1099 will be a realized gain/loss report that will assist you in preparing your annual tax return.