Frequently Asked Questions

Background

▸ What is Macroclimate®?▸ What is Macroclimate®?
▸ What is a fee-only fiduciary advisor?▸ What is a fee-only fiduciary advisor?
  • Fee-only fiduciary advisors like Macroclimate® are regulated by the SEC and adhere to the Fiduciary Standard of Care, which means we always act solely in the client’s best interest when offering personalized financial advice. Fee-only means clients’ fees are our only source of compensation. For example, we do not earn commissions based on where we invest your money. See also: Where is my money held?

▸ What is a Certified B Corporation®▸ What is a Certified B Corporation®?
  • B Corps lead a growing global movement of people using business as a force for good. Macroclimate® became a B Corp in February 2017 — having achieved an “exceptional” final score of 146 points (only 80 points are needed for certification). As part of its B Corp commitment, Macroclimate® donates 5% or more of its annual revenues to environmental research and climate action.

▸ What is Macroclimate’s relationship to Dimensional Fund Advisors?▸ What is Macroclimate’s relationship to Dimensional Fund Advisors?
  • Dimensional Fund Advisors (DFA) offers its funds to individual investors through a select group of investment advisors. Macroclimate® is not affiliated with DFA, and doesn’t receive commissions or financial incentives of any kind for recommending DFA funds. We do so because: 1) our investment beliefs are well aligned with DFA; and 2) DFA funds offer a way to attain broadly diversified low-carbon portfolios at low cost.

  • Mark Kriss, Macroclimate’s Managing Partner, serves as a non-paid member of the Dimensional Sustainability Funds Council. The Sustainability Funds Council is a group of consultants and wealth managers not affiliated with Dimensional working together with Dimensional to research the best ways to provide sustainability investment solutions to investors.

▸ What is an automated (or digital) investment service?▸ What is an automated (or digital) investment service?
  • Macroclimate® uses state-of-the-art web technology to automate service delivery for your convenience, lower cost, faster response, and improved learning and understanding of core investment concepts and trade-offs for better decision making.

  • Automation means self service — any time, anywhere. This is especially true during the initial portfolio design phase as you explore investment alternatives and trade-offs using our interactive “what if” Risk Profile tools. Other self service features and benefits include streamlined account opening process, 24x7 availability of portfolio performance reports — updated as of yesterday’s close — and free online access to MoneyGuidePro professional-grade financial planning tool.

  • Automation also means enhanced services. For example, graphical performance reports are interactive for improved clarity and understanding. Automation also plays an important role in our internal operations – we utilize state-of-the-art algorithmic rebalancing to facilitate timely cash management, tax minimization and cost-effective trading for your benefit.

  • See also: Do you provide personalized one-on-one investment advice? and How does Macroclimate® compare to Betterment?

▸ Do you provide personalized one-on-one investment advice?▸ Do you provide personalized one-on-one investment advice?
  • Internet-based clients do not receive personalized one-on-one investment advice from a member of our Advisory Team independent of this interactive website.

  • However, if you have existing holdings in a taxable account, we’d be pleased to conduct an initial analysis of your portfolio – at no additional charge – to make sure that we’re being tax efficient with the rollout of your strategy. Simply “request cost basis analysis” under “Special Instructions” when you confirm your plan selection. See also: What happens to the stocks and funds I already own?

▸ Do you provide personalized one-on-one investment advice?▸ What if I already have a financial advisor?
  • We’d welcome collaboration with your trusted advisor who assists you with your financial planning, investments, tax preparation, insurance and/or estate planning. Please direct your advisor to our Program for Independent Advisors and discuss this option with them. We offer special pricing for advisors which benefit you, the client.

▸ What is CarbonScan®?▸ What is CarbonScan®?
  • CarbonScan®, a free tool developed by Macroclimate®, estimates the carbon intensity of your existing investment portfolio. Specifically, it reveals the approximate percentage of assets you have invested in the largest owners and producers of fossil fuel reserves worldwide (coal, oil and gas), as well as the largest owners of coal-fired power plants. Estimates are based on the average carbon intensity of the equities asset classes you select. See also: How do I classify mutual funds?


Getting Started

▸ Who can I talk to?▸ Who can I talk to?
▸ How much does a Macroclimate® account cost?▸ How much does a Macroclimate® account cost?
  • Please see our Pricing. Other than our fees, the only other costs are the relatively low expenses of the Dimensional (DFA) mutual funds you’ll own and transaction fees charged by your brokerage firm (TD Ameritrade Institutional).

▸ Can you manage my IRA or “orphaned” 401k? ▸ Can you manage my IRA or “orphaned” 401k?
▸ Which account types do you support?▸ Which account types do you support?
  • We support individual, joint, and trust accounts along with all types of IRAs. Have an old 401(k)? We can help roll it over into a Low Carbon IRA.

  • We also support endowment accounts for non-profit organizations such as professional associations, foundations, museums, environmental organizations, educational institutions, and religious institutions and organizations. Simply type “nonprofit organization“ under “Special Instructions” when you confirm your plan selection.

  • We do not currently support 401(k) or 529 plans.

▸ What is your minimum to get started?▸ What is your minimum to get started?
  • You can open an account with $50,000. We set the minimum at this level to ensure that the automated investment service will be cost effective for you. Sign up here to be notified when we accept smaller accounts.

▸ What do I get with a Macroclimate® account?▸ What do I get with a Macroclimate® account?
  • In a nutshell, you get an efficient, well-balanced low-carbon portfolio using low-cost, institutional-grade mutual funds from Dimensional Fund Advisors. After getting you into the right mix of investments, our software monitors your portfolio regularly and will automatically rebalance when necessary. You also gain access to MoneyGuidePro, a professional-grade financial planning tool that you can use on your own or in collaboration with your financial planner, and state-of-the-art on-demand performance reports through the Macroclimate® Client Portal.

▸ How do you design a portfolio for me?▸ How do you design a portfolio for me?
  • We want you to pick the right portfolio for you, so we’ve written a short set of questions designed to get to know you and to measure your comfort with, and capacity for, risk. Given your responses, we’ll suggest a portfolio that we believe to be a good match for you and your goals. Ready to Get Started?

▸ Do you take my taxes into consideration?▸ Do you take my taxes into consideration?
  • When you sign up for a taxable Macroclimate® account, we’d be pleased to conduct an initial analysis of your existing holdings – at no additional charge – to make sure that we’re being tax efficient with your strategy. Simply “request cost basis analysis” under “Special Instructions” when you confirm your plan selection.

  • Since we don’t trade often once your new portfolio has been established, realizing significant capital gains should be infrequent in most cases. One of our management objectives is tax efficiency — our fund selection criteria values after-tax returns over pre-tax returns. We prefer long-term gains over short-term gains to keep taxes as low as possible. If for tax reasons you’re not prepared for us to sell a security, you can keep it out of your account by notifying us when opening your account.

  • We recommend speaking with a tax professional to discuss your specific situation.

Account Management

▸ Where is my money held?▸ Where is my money held?
  • Macroclimate® has partnered with one of the most trusted and popular brokerages in the country: TD Ameritrade Institutional. This means if your money is already there, your Macroclimate® account will stay there. TD Ameritrade is a member of the Securities Investor Protection Corporation (SIPC). Securities in your account are protected up to $500,000. Details.

  • If your account is at a different brokerage, we’ll open a Macroclimate® account for you at TD Ameritrade. We chose TD Ameritrade because they have a great selection of funds, state-of-the-art technology, excellent investor support, and low cost.

▸ How does my existing account become a Macroclimate® account? ▸ How does my existing account become a Macroclimate® account?
  • If your account is already at TD Ameritrade Institutional, Macroclimate® will be added as an advisor and we’ll manage your account at TD Ameritrade. If your account is at another brokerage, we’ll move your account to TD Ameritrade and manage it from there.

  • Once you get started, our first step is to reinvest your current holdings to create an efficient, well-balanced portfolio for you using low-cost, institutional-grade mutual funds from Dimensional Fund Advisors. After getting you into the right mix of investments, we’ll monitor your portfolio and automatically rebalance quarterly.

▸ How do I pay for my Macroclimate® account?▸ How do I pay for my Macroclimate® account?
  • Our fee is charged following the end of each quarter and automatically deducted from your brokerage account. (Note: The fee is deducted from a small portion of cash left uninvested in your account.)

▸ How do I add money to my Macroclimate® account?▸ How do I add money to my Macroclimate® account?
  • MAIL CHECK

    For non-retirement accounts, simply mail your check payable to TD Ameritrade Clearing Inc. to:

    TD Ameritrade Institutional
    PO Box 650567
    Dallas, TX 75265-0567

    Always include your account number in the memo section of your check. Certified mail with tracking is recommended. For retirement accounts, please also complete IRA Deposit Slip.

  • MOBILE APP CHECK SCANNER

    If you prefer, deposit your check using TD Ameritrade’s Advisor Client mobile app (visit Apple®AppStore or Google Play). Refer to screenshot below.



    If you don’t already have Advisor Client login credentials, please contact Client Services.

  • ELECTRONIC (ACH) TRANSFER VIA WEB

    You can easily add money to accounts via electronic (ACH) transfer from your bank on the TD Ameritrade Advisor Client website as shown below. This is the best approach if you plan to make regular deposits.



    Please note: account titles/regisitration must be exactly the same for ACH transfers to work. For example, you can’t ACH transfer funds from a non-trust checking account to a trust account or IRA account. Use check or wire transfer instead. If you don’t already have Advisor Client login credentials, please contact Client Services.

  • WIRE TRANSFER

    Complete, print, sign and mail Wire Transfer Form to:

    TD Ameritrade Institutional
    PO Box 650567
    Dallas, TX 75265-0567

    OR FAX: (866) 226-4614

    Be sure to include your account number and correct account title/registration.

▸ How do I withdraw money?▸ How do I withdraw money?
  • For taxable accounts, you can easily withdraw money at any time by writing a check or via electronic (ACH) transfer to your bank using the TD Ameritrade Advisor Client website as shown below.

  • When you need to withdraw funds, we rebalance to your target allocation following your cash withdrawal. We recommend that you alert our Client Services team 48 hours prior to large cash withdrawals to ensure availability of your funds.

  • To minimize transaction costs, we also recommend that you use a bank checking account — not your money market account on TD Ameritrade — for your day-to-day expenses.

▸ Who will send my tax documents?▸ Who will send my tax documents?
  • Tax reporting is the responsibility of TD Ameritrade — so all of the documents will come from them.

▸ Who will send my tax documents?▸ What about portfolio performance reports?
  • State-of-the-art on-demand performance reports are available through the Macroclimate® Client Portal. Interactive graphical reports show performance, cash flow and asset allocation as of yesterday’s close, most recent quarter, or any historical period for your account.

▸ How do I close my Macroclimate® account? Are there any penalties?▸ How do I close my Macroclimate® account? Are there any penalties?
  • You can cancel at any time for any reason with 30 days notice. There are no penalties for closing your account. We’d simply remove Macroclimate® as an advisor on the account and your account will retain your current holdings. (Upon cancellation, you will not be able to purchase additional shares of Dimensional’s institutional-grade mutual funds.) If you choose to then manage your portfolio on your own, your account will be transitioned from TD Ameritrade Institutional to TD Ameritrade’s retail brokerage service.


Investments

▸ What is your investment philosophy?▸ What is your investment philosophy?
  • Our investment philosophy is to reduce climate and carbon risk while using low cost-funds from one of the most well-respected companies in the industry – Dimensional Fund Advisors (DFA). We believe in creating broadly diversified portfolios – in stocks, bonds and real estate (REITs) – that give you exposure to investments both in the US and internationally. Learn more.

▸ What do you mean by a well-balanced portfolio?▸ What do you mean by a well-balanced portfolio?
  • Whether you’re comfortable with a lot of risk or lean towards more safety, a properly diversified portfolio will help reduce your risk compared to a non-diversified one. A portfolio that’s filled with a combination of stock and bond mutual funds of various degrees of risk means it’ll be better prepared for any number of situations the market throws at it.

  • In short, a well-balanced portfolio offers you a higher expected return at your preferred level of risk.

▸ What do you invest in?▸ What do you invest in?
  • Our primary goal is to build a properly diversified portfolio for you at the lowest cost using asset class mutual funds.

  • To do this, we identified seven key asset classes that have the biggest impact on investment returns and let us diversify your portfolio on two levels: security-level diversification by investing in asset class mutual funds and market diversification by providing exposure to many different markets across asset classes.

  • We invest you in institutional-grade mutual funds from Dimensional. These funds are broadly diversified within each asset class we focus on: US-based stocks, developed (non-US) and emerging market stocks, real estate, government bonds (US and non-US), and real return (inflation-protected) bonds. See also “Which funds do you use?”. You can learn more about Dimensional and how we invest here.

▸ Which funds do you use?▸ Which funds do you use?
▸ Is there a non Low Carbon option?▸ Is there a non Low Carbon option?
  • We believe a low carbon/sustainability strategy is both the prudent and responsible default option for everyday investors. However, if you prefer, you may choose an “unfiltered” approach which does not exclude or underweight companies based on carbon-intensity or other sustainability factors. To do so, select “Maximize Expected Returns” and specify “Unfiltered” under “Special Instructions” when you confirm your plan selection.

▸ Where can I learn more about your performance?▸ Where can I learn more about your performance?
  • See Performance Record net fees & expenses and last five years.

    (Note: Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown.)

▸ Why do you use mutual funds and not stocks?▸ Why do you use mutual funds and not stocks?
  • Our goal is to implement a broad asset allocation at a low cost. The funds we’ve chosen can accomplish this goal, particularly for smaller asset levels. Investing in individual stocks would involve many more transactions and incur significantly higher costs for you.

▸ Where can I see how I’ll be invested?▸ Where can I see how I’ll be invested?
  • Check your proposed optimal portfolio here. You’ll see a breakdown of which asset classes you’ll be invested in based on the risk level you choose. (Note: this is an estimate and your actual asset allocation will be determined on the day trades are made.)

▸ What happens to the stocks and funds I already own?▸ What happens to the stocks and funds I already own?
  • Our goal is simple — to provide you with a low-cost, well-balanced and environmentally responsible portfolio operating at the risk level you choose. Typically, everyday investors are often paying too much in fees and/or own a portfolio that’s not well-diversified (translation: taking on far too much or too little risk). To provide you with an efficient portfolio geared towards long-term growth, we will sell your current holdings and replace them with low-cost, well-diversified institutional-grade funds.

  • If you have existing holdings in a taxable account, we’d be pleased to conduct an initial analysis of your portfolio – at no additional charge – to make sure that we’re being tax efficient with the rollout of your strategy. If your transferred assets hold substantial unrealized gains, the report will include at least two rollout options for you to choose from. Simply “request cost basis analysis” under “Special Instructions” when you confirm your plan selection. (Please allow three weeks following receipt of your assets at TD Ameritrade Institutional.) An illustrative example is shown below.

  • Note: Capital gains taxes are only triggered when an asset (like stocks or mutual fund shares) are “realized” (sold) for a price that is higher than the purchase price — not while it is held by an investor. Our free cost basis analysis described above may be advisable if you think you have holdings with substantial unrealized gains in a taxable account. Since capital gains in tax-deferred accounts like IRAs or 401Ks accumulate tax free until the investor takes constructive receipt of the gains (i.e. withdraws cash from the account), they are not subject to these capital gains tax considerations when restructuring investment portfolios. Please consult your tax advisor regarding your personal tax situation.

▸ How often do you rebalance?▸ How often do you rebalance?
  • We rebalance quarterly – and, as needed, when you add or withdraw cash from your account.

  • As you add cash to a portfolio, we buy more mutual funds to maintain your target allocation. To keep transaction costs low, we won’t buy a small amount of a security if it results in unnecessary transaction fees. When you need to withdraw funds, we rebalance to your target allocation following your cash withdrawal.

▸ How do you measure investment risk?▸ How do you measure investment risk?
  • Investment risk is the risk that your investments could go down in value.

  • We measure risk by looking at how stable investment returns have been in the past. For example, an investment of $100 whose value fluctuated between $90 and $110 over the course of the year is riskier than an investment whose value fluctuated between $95 and $105. More importantly, we also look at how different assets move at the same time — that’s how diversification lowers the riskiness of your portfolio.

▸ How do you forecast how the portfolio may perform over time?▸ How do you forecast how the portfolio may perform over time?
  • We use historical information. We end up with a range of outcomes and the wealth charts in our Portfolio Designer tool illustrate this data. Please note that past performance does not guarantee future results and that we use past performance only as an indication of potential future results.

▸ How are the answers to my questions mapped to an asset allocation?▸ How are the answers to my questions mapped to an asset allocation?
  • We look at both your appetite for risk and your ability to take risk. You may want to take a lot of risk (appetite) but given your age, spending needs, and income (ability), we may adjust our recommended risk level for you. You are always in control of your asset allocation. Our recommendation is based on your answers but you can override our recommendation and chose a different allocation.


Security & Privacy

▸ What is bank-level data security?▸ What is bank-level data security?
▸ Can you move my money in and out of my Low Carbon Account?▸ Can you move my money in and out of my Macroclimate® account?
  • Only you can direct the movement of cash into or out of your account. The sole exception is the fees you pay us at the end of each quarter, which are automatically deducted from your brokerage account per your authorization. See also: How do I withdraw money?

▸ Is my money safe?▸ Is my money safe?
  • All Low Carbon Accounts come with Securities Investor Protection Corporation (SIPC) coverage, which protects securities and cash of the customers of its members up to a maximum of $500,000, of which $250,000 may be cash. For additional information about SIPC coverage, including a brochure, please call (202) 371-8300 or visit www.sipc.org.

▸ Do you sell my personal information?▸ Do you sell my personal information?
  • We won’t sell your personal information — ever. As a fiduciary advisor, we value your trust and safeguard your confidential information. Nor do we accept commissions or compensation of any kind based on the financial products — or service delivery partners — we recommend. More on our privacy practices.



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