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We are here to help you through the paperwork process. If at any point you need assistance please feel free to email our Service Center or contact your advisor directly.
The Trek Financial Platform allows clients to utilize a digital platform to manage their investments. This platform provides clients with the opportunity to invest into globally diversified portfolios of index-tracked exchange traded funds (ETFs).
The system makes recommendations to the client based on their risk level, which is determined through a series of questions upon sign in. The system then creates an optimized portfolio for the client and manages buying and selling the funds within the portfolio, for the client.
The funds and asset allocations are chosen by the investment team at Betterment. This team also manages things such as re-balancing, reinvesting dividends, auto depositing and more.
The platform’s core portfolio is comprised of a combination of stock ETFs and bond ETFs, globally diversified and personalized for each goal and time horizon. There are also additional options for those interested in socially responsible investing (SRI), targeting income-generation, and quantitative factor investing. Each portfolio is available at the individual goal level, and adjusts its recommended allocation or target income based on your preferences and time horizon. You can have multiple portfolio strategies within your account, tailored for different financial goals.
The stock ETFs efficiently capture the broad U.S. stock market, and international developed and emerging markets. Your money is invested in thousands of companies through fractional shares. Exactly how much of your portfolio is made up of which stocks depends on the exact target allocation.
The platform fee costs 0.25% per year and has no minimum balance requirement. The fee is prorated across the entire year and is charged at the end of each calendar quarter (every 3 months). If you withdraw all your money before the end of the quarter, you are charged a prorated fee for only the days your money was managed by the platform.
This fee is considered a “wrap fee” and covers all transactions, trades, transfers, re-balancing, advice, and account administration. There are no additional fees to buy and sell securities. Fund level fees are directly to fund providers, and the digital platform receives no part of these fees.
The platform supports the following types of accounts:
Unfortunately the platform does not support 529 accounts or custodial accounts at this time. All accounts are managed which means you cannot pick and chose your own funds or select specific securities to invest in.
If your account is a retirement account, such as an IRA, 401(k), 403(b), or pension plan, you can start the process of moving those over via the “Start Rollover” button found on the Summary page of your Betterment account online. Please note you must be logged in from a web browser.
For non-retirement accounts, such as taxable, brokerage, or money market accounts, you will need to sell your shares and redeposit the funds into your Betterment account as cash via a linked bank account in your name. As this typically results in tax consequences, you can see if you have any other losses from prior years or the current year in which you can use to offset your potential realized gains.
If the non-retirement account you are transferring contains whole shares of ETFs that match the ETFs in the Digital Platform portfolio, let us know, and we can provide you with instructions on how to transfer those assets over without having to liquidate.
If you already hold assets besides cash, you may be eligible for an ACATS (Automated Customer Account Transfer Service) transfer. This is a seamless way to transfer assets at another firm to the Trek Digital Investment Platform.
The platform supports transfers from outside brokerages using the Automated Customer Account Transfer Service (ACATS). This is also known as an “in-kind transfer.”
For non-IRA accounts, we currently accept electronic transfers (ACATS) for select ETFs; we do not currently accept shares of mutual funds or single stocks. Each electronic transfer request is subject to review by our team. We are currently offering this feature on a limited rollout. We hope to accept a wider variety of ETFs in the future.
We currently accept the following ETFs:
BND, BNDX, CMF, EMB, IEMG, IVE, IWN, IWS, LQD, MUB, NYF, SCHB, SCHE, SCHF, SHV, TFI, VBR, VCIT, VEA, VOE, VTI, VTIP, VTV, VWO, and VWOB
Depending on what you hold in your current portfolio, you may need to sell your shares and redeposit the funds into Betterment. The simplest way to fund your taxable Betterment account is by linking a checking account and making a deposit.
If you are inquiring about rolling over an IRA, 401(k), or other retirement plan, we’ll use a direct transfer process to avoid tax consequences. A direct transfer entails your current provider sending us a check of your funds directly, for your benefit.
Transitioning assets from one taxable account to another should be done with care in order to avoid unnecessary taxes. Use the strategies below to transition a portfolio to your Trek Digital Portfolio. We recommend speaking with a tax advisor if you have questions about your specific tax implications.
Using your account statements or information directly from your brokerage’s website, determine the holding period (based on purchase date) and tax basis (usually, the purchase price) of your current portfolio holdings. This is often available as a “cost basis report” or “gain/loss report”.
Holdings that are currently worth less than they were purchased for are in a loss, and selling these should not realize taxable gains. In fact, they may provide a tax benefit by offsetting other gains and up to $3,000 of ordinary income. Start by selling these first.
If you are selling the same ETFs as the ones in your Trek Digital Portfolio (or a fund that tracks the same index as one of our funds), wait 30 days after selling before depositing the cash to Betterment to avoid rebuying the same ETFs and potentially incurring a wash sale.
If you have ETFs with gains, you may be able to transfer them in-kind to your Trek Digital Portfolio account, which avoids sale and any associated taxes. We support any ETF currently in the Trek Digital Portfolio and potentially others.
For any securities held more than one year, you will likely qualify for preferential tax treatment when you sell them. You can sell these to offset any available losses taken or harvested in a year and pay no tax. After that, you can control the gains you realize each year by selling specific amounts. You’ll want to review your entire income tax picture and ensure you are not increasing your tax by moving into a new tax bracket solely due to the realized gains from the sale (as opposed to getting a raise at work). Also make sure that you have the money set aside to pay the taxes—there is no withholding on capital gains, like there is with ordinary wages.
Even if you pay some taxes in the current year, this decision can be worth it if you are saving on fees, or future taxes in the form of mutual fund capital gains distributions (all else being equal, ETFs are generally less likely to make such distributions). Use our Tax Switch Calculator to compare the break-even point.
If you can’t offset all short and long-term gains with other losses, hold on to securities with embedded gains purchased a year ago or less, since these are taxed at a higher rate. For the majority of taxpayers, gains on investments held for a year or less are taxed at the same marginal rate as your ordinary income, the highest rate. Gains on investments held for more than a year are taxed at a lower rate than the short-term capital gains rate.
After executing the above strategies, you’ll have any un-invested cash and sale proceeds in your brokerage account. Transfer this to the bank account linked to your Trek Digital Portfolio account, and log in to your account to make a deposit or set up auto-deposit.
Investment advisory services are offered through Trek Financial, LLC., an SEC Registered Investment Adviser. Information presented is for educational purposes only. It should not be considered specific investment advice, does not take into consideration your specific situation, and does not intend to make an offer or solicitation for the sale or purchase of any securities or investment strategies. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. © Copyright 2021 Trek Financial. All Rights Reserved.